In recent years, phase change materials have attracted considerable interest for their distinctive capability to absorb and discharge heat during phase transitions like melting and freezing. This characteristic enables them to significantly improve energy efficiency and support effective thermal regulation in a wide range of applications. Green PCMs, a subset of PCMs derived from sustainable and eco-friendly sources such as fatty acids, bio-based polymers, and recycled materials, have emerged as a promising alternative to conventional PCMs. Unlike traditional PCMs, which are often derived from fossil fuels, green PCMs are renewable, biodegradable, and non-toxic, making them environmentally benign. Their low environmental impact aligns with global sustainability goals, such as reducing carbon emissions and promoting circular economy principles. This review delves into the classification, properties, and applications of green PCMs, with a particular focus on their use in building insulation and solar energy storage. The review also addresses challenges such as leakage and thermal instability, and cost-effective production methods that make green PCMs more accessible for large-scale applications. By highlighting the role of green PCMs in advancing sustainable energy solutions, this review underscores their potential to reduce carbon footprints and contribute to a more sustainable future.