In this paper, we introduced an eco-friendly process to dramatically simplify carbon microfiber fabrication from discarded lokta paper (LP) from Nepal. Herein, carbonization followed by the activation processes was applied to transform the lokta paper into flexible, free-standing, and porous carbon fiber paper. The as-prepared activated carbonized lokta paper (ACLP) was characterized with state-of-the-art techniques. The electrochemical tests were performed in alkaline (6 M KOH), acidic (1 M H2SO4), and neutral (1 M Na2SO4) aqueous electrolytes. In all cases, the ACLP showed enhanced performance compared to the carbonized lokta paper without activation (CLP). The ACLP exhibited areal capacitance of 380, 428, and 273 mF/cm(2) at the current density of 1 mA/cm(2) in 6 M KOH, 1 M H2SO4, and 1 M Na2SO4 electrolytes, respectively with excellent capacity retention (above 100%) after 5000 cycles. Further, we assembled a supercapacitor device with key components (electrodes and separator) coming from lokta paper. The pristine lokta paper was used as a separator, whereas the ACLP was used as positive and negative electrodes in the supercapacitor. The device exhibited promising areal capacitance of 272, 405, and 124 mF/cm(2) in alkaline, acid, and neutral electrolytes, respectively at the current density of 1 mA/cm(2), with excellent durability after 5000 cycles. An energy density of 56.25 mWh/cm(2) at a power density of 997 mW/cm(2) under 1 M H2SO4 electrolyte was recorded. Overall, this study demonstrated an environmentally friendly approach to valorize a discarded paper into high-performance supercapacitor electrode material.