Global climate change caused by excessive greenhouse gas (GHGs) emissions has been widely concerned. Agricultural activities are the second largest source of GHGs emissions, it is urgent to reduce agricultural GHGs emissions. Biochar, which has stable properties, abundant aromatic carbon and pores, is produced by pyrolysis of biomass under high temperature and limited oxygen conditions. The effect of biochar amendment on GHGs mitigation and soil carbon sequestration is excellent, and biochar application has the potential to participate in China’s ongoing carbon trading of voluntary emission reduction (VER). However, the factors affecting the carbon sequestration and GHGs emission reduction effect of biochar are complicated, so it is necessary to systematically summarize the mitigation effect, influencing factors and research progress of biochar. This paper reviewed the GHGs emission reduction and carbon sequestration effect of biochar through pot and field experiment as well as meta-analysis research. At the same time, Citespace software was used for visual analysis to explore the research hotspot and development trend in this field. The opportunities and challenges faced by biochar application projects participating in carbon trading were summarized based on the characteristics of domestic and foreign carbon trading market development and corresponding supporting policies. Corresponding solutions were provided also, which offered scientific guidance and useful reference for the development of carbon sequestration and GHGs emission reduction research of biochar and the successful participation of biochar application projects in carbon trading.