Effective treatment and utilization of sludge contribute to achieve conventional carbon emission reduction and resource recovery, which is of great significance to realize carbon neutralization of WWTPs. Sludge carbonization derived biochar has attracted more interest because of high potential as catalytic materials. Therein, sludge-derived electrode exhibits a promising potential in the case of sludge utilization for electrocatalysis, however, electrocatalytic performance of the already reported sludge-derived electrode is unsatisfactory due to insufficient active sites. In this study, an efficient Pd/sludge-biochar loaded foam nickel (Pd-SAC@Ni) was successfully fabricated using simple pyrolysis and solidification method, and exhibited remarkable electrocatalytic performance for 4-chlorophenol (4-CP) degradation. Furthermore, the morphology, element distribution and crystal composition were characterized by SEM, EDS, XPS and XRD. The Pd-SAC@Ni electrode exhibited superior electrocatalytic performance than Ni, SAC@Ni, Pd–Ni electrodes. The reduction rate of 98.9% was achieved at current density of 5 mA cm−2, 4-CP concentration of 0.8 mM and initial pH of 7.0. Also, Pd-SAC@Ni electrode showed desirable reusability and achieved 98% of 4-CP removal after multiple runs of experiments. Moreover, the active hydrogen species (H*) generation capacity of electrodes was determined using tert-butanol (TBA) as trapping agent. The mechanism analysis demonstrated that direct reduction process and indirect reduction process both involved in the 4-CP degradation process, and their contribution were 19.5% and 80.5%, respectively. Then, the intermediates formed in the electrochemical degradation of 4-CP were revealed by HPLC and the plausible degradation pathway was proposed. This study provides a cost-effective approach for preparing sludge biochar electrode, and explored a novel way to promote resourceful utilization of sludge for carbon neutrality.