Because of industrialization and modernization, phenomenal changes have taken place in almost all spheres of life. Consequently, the consumption of energy resources and the cases of environmental hazards have risen to an unprecedentedly high level. A development model with due consideration to nature and an efficient utilization of energy sources has become the need of the hour, in order to ensure a sustainable balance between the environmental and technological needs. Recent studies have identified the suitability of ionic liquids (ILs), often labeled as ‘green solvents’, in the efficient utilization of energy resources and activities such as bio-extraction, pollution control, CO2 capture, waste management etc. in an environmentally friendly manner. The advent of magnetic ionic liquids (MILs) and deep eutectic solvents (DESs) have opened possibilities for a circular economic approach in this filed. This review intends to analyze the environmental and energy wise consumption of a wide variety of ionic liquids and their potential towards future.