Biodiesel is considered to be an economical and eco-friendly substitute to fossil fuels. The present research was focused on the synthesis of potassium doped biochar catalyst from wood dust waste. The synthesized activated biochar catalyst was subjected to characterization using various techniques such as FT-IR, SEM-EDAX, XRD analysis which showed possible higher catalytic efficiency. The microalgae Chlorella vulgaris oil was used for the biodiesel production through transesterification reaction using the synthesized potassium doped biochar catalyst. The reaction parameters were optimized using statistical methods and the optimized conditions were found to be of 5.46% of catalyst dosage, 10.39:1 of methanol to algal oil ratio, 61.41 °C of temperature and 75.3 min of time with the highest biodiesel yield of 91.9%. The reaction kinetics was studied and it was found to follow the first-order kinetics with an activation energy of 12.18 KJ/mol. The catalyst reusability study exhibited higher catalytic performance until fourth cycle. Overall, the utilization of microalgae as a biofuel source and industrial waste as a catalyst contributes to sustainable biodiesel production and promotes a greener environment by reducing dependency on fossil fuels and minimizing industrial waste.