Biomass derived carbon materials have advantages of cost and availability over other carbon materials. However, handful researches based on biomass derived carbon materials have been conducted to explore the oil–water adsorption potential. In this study, we demonstrated that the egg yolk derived carbon material in the presence of iron nanoparticle can be used as a cost-effective absorbent to oil–water separation. Carbon-sponge composite was prepared by dip coating method and showed high adsorption capacity (from 28 to 87 times its original weight) for broad spectrum of organic solvents and oil. These results show evidence that the egg yolk derived carbon material is suitable candidate for the construction of hydrophobic sponge in large-scale and low-cost for removal of oil contaminants from aqueous medium.