Tons of oily waste accumulating worldwide has led to severe environmental problems and an increase in carbon footprint. The oily waste is rich in carbon and therefore its utilization as a substrate for the production of value-added products can aid in the concept of carbon neutrality. Oils can be directly utilized as substrate and microorganisms can catabolize them to produce biosurfactants. Biosurfactants being biodegradable and less toxic than synthetic surfactants are the molecules of the 21st century and are preferred candidates. Also, several fungal species can bio-transform oils to produce biosurfactants. Therefore, this study comprehensively summarizes different categories of oily waste generated worldwide, their sources, and environmental toxicity. The microbial efficiency towards oily waste utilization for the production of biosurfactants is reviewed. Following this, advance techniques including metabolic engineering, and omics approaches for biosurfactant production from this waste have been presented. Their global market and future perspective have been discussed to further emphasize the requirement for biosurfactants. The state-of-the-art information provided in various sections of this manuscript may aid the researchers to understand the relationship of oily waste utilization with carbon footprint generation. This directs attention and warrants future research towards the development of improved pathways/processes in oil waste based biorefineries.