The quest for sustainable and environmentally friendly fuel feedstocks has led to the exploration of green solvents for the extraction of bio-oil from various biomass sources. This review paper provides a comprehensive analysis of the challenges and future research outlooks for different categories of green extraction solvents, including bio-based solvents, water-based solvents, supercritical fluids, and deep eutectic solvents (DES). The background of each solvent category is discussed, highlighting their potential advantages and limitations. Challenges such as biomass feedstock sourcing, cost fluctuations, solvent properties variability, limited compatibility, solute solubility, high costs, and potential toxicity are identified and examined in detail. To overcome these challenges, future research should focus on alternative and abundant feedstock sources, the development of improved solubility and separation techniques, optimization of process parameters, cost-effective equipment design, standardization of DES compositions, and comprehensive toxicological studies. By addressing these challenges and advancing research in these areas, the potential of green extraction solvents can be further enhanced, promoting their widespread adoption and contributing to more sustainable and environmentally friendly industrial processes.