Forests play a crucial role in mitigating global warming, contributing approximately 46% of the global terrestrial carbon sink. However, it remains uncertain whether the addition of biochar to forests enhances the ecosystem’s carbon sink capacity. This study aims to address this scientific question by investigating whether biochar application increases carbon storage, potentially leading to an overall rise in carbon emissions by influencing soil respiration and identifying the underlying mechanisms. A controlled experiment was conducted in a young plantation forest that had grown for three years, where soil CO2 efflux rate and physicochemical properties, photosynthesis, and plant growth traits were measured across varying biochar addition rates (0, 5, and 10 t/ha) over five seasons. Then, statistical methods including one-way ANOVA, regression analysis, and structural equation modeling (SEM) were employed to assess differences in biological and abiotic factors among biochar addition gradients and understand the influencing mechanisms of soil CO2 efflux change. The findings revealed that biochar addition significantly increased the contents of soil organic carbon (SOC) and microbial biomass carbon (MBC), consequently promoting photosynthesis and plant growth (p < 0.05). Biochar addition accounted for 73.8% of the variation in soil CO2 efflux by affecting soil physicochemical properties, photosynthesis, and plant basal diameter growth. However, the net effect of biochar addition on soil CO2 efflux was found to be low. The positive effects of biochar addition on soil CO2 efflux via factors such as soil bulk density, total nitrogen (TN), MBC, and photosynthesis were counteracted by its negative impact through soil total phosphorus (TP), water content, pH, SOC, and plant basal diameter growth. Overall, our findings indicate that there was no significant increase in soil CO2 efflux in the short term (totaling 16 months) over the biochar addition gradient. However, we observed a substantial increase in soil carbon storage and an enhancement in the soil’s capacity to act as a carbon sink. Therefore, adding biochar to forests may be a feasible strategy to increase carbon sinks and mitigate global climate change.