Wastewater treatment plants (WWTPs) are being challenged to operate as carbon-neutral and energy-efficient systems. The structural extracellular polymeric substances (St-EPS) in waste-activated sludge (WAS), such as alginate, were revealed to form an architectural gel matrix, hindering the psychrophilic hydrolysis and acidogenesis and its application in nitrate removal. Consequently, volatile fatty acid (VFAs) production for nitrate removal at 15 °C is demonstrated by a novel, enriched psychrophilic consortium for alginate-degrading and nitrate-removing. Both alginate lyase (EC 4.2.2.3) and oligoalginate lyase (EC 4.2.2.26) are identified for alginate utilization by the metaproteomics analysis. A high nitrate removal rate of 7.6 (WAS as the substrate) to 13.0 (alginate as the substrate) mgN/(gVSS h) was achieved. By combining high-throughput and PacBio sequencing and metagenomics analysis, two genera of Bacteroides (69.4%) and Dysgonomons (12.8%) are revealed to enhance psychrophilic WAS fermentation. The VFAs can be utilized by denitrifiers for nitrate removal in an indirect pathway. Moreover, other genera of denitrifiers (Pseudomonas, 0.11%; and Massilla, 0.003%) can excrete alginate lyase, indicating the dual merits of St-EPS degradation and nitrate removal in the direct pathway. This work extends the application of WAS for denitrifiers, providing a new carbon-neutral and energy-efficient system in WWTPs, especially under psychrophilic conditions.