Hydrothermal liquefaction of wet biomass such as algae is a promising thermochemical process for the production of bio-oil. Bio-oil aqueous phase generated during liquefaction process is rich in complex organics and can be utilized for biogas production following its pre-treatment with granular activated carbon. In our study, use of 30% activated carbon resulted in higher chemical oxygen demand (COD) reduction (53 +/- 0.3%) from aqueous phase. Higher CH4 production (84 +/- 12 mL/g COD) was also observed in 30% carbon-treated aqueous phase fed cultures, whereas only 32 +/- 6 mL CH4/g COD was observed in control (non-carbon treated) cultures. The results from this study indicate that almost 67 +/- 0.3% initial COD of aqueous phase can be reduced using a combination of both carbon treatment and biogas production. This study shows that aqueous phase can be utilized for CH4 production. (C) 2016 Elsevier Ltd. All rights reserved.