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The present work deals with developing a method for revalorizing steel residues to create sunlight-active photocatalysts based on iron oxides. Commercial-grade steel leftovers are oxidized under different combinations of pH and temperature (50–90 °C and 3 ≥ pH ≤ 5) in a low energy-intensive setup. The material with the highest production efficiency (yield > 12%) and magnetic susceptibility (χm = 387 × 10−6 m3/kg) was further explored and modified by diffusion of M2+ (Zn and Co) ions within the structure of the oxide using a hydrothermal method to create ZnFe2O4, CoFe2O4 and combined Co–Zn ferrite. (Co–Zn)Fe2O4 displayed a bandgap of 2.02 eV and can be activated under sunlight irradiation. Electron microscopy studies show that (Co–Zn)Fe2O4 consists of particles with diameters between 400 and 700 nm, homogeneous size, even distribution, and good dispersibility. Application of the developed materials in the sunlight catalysis of black liquors from cellulose extraction resulted in a reduction of the Chemical Oxygen Demand (− 15% on average) and an enhancement in biodegradability (> 0.57 BOD/COD) after 180 min of reaction. Since the presented process employs direct solar light, it opens the possibility to large-scale water treatment and chemical upgrading applications. [ABSTRACT FROM AUTHOR]