Transition towards a carbon-neutral district energy community calls for carbon elimination and offsetting strategies, and phase change materials (PCMs) with substantial potential latent energy density can contribute significantly to carbon neutrality through both carbon-positive (like PCM-based thermal control in solar PVs) and carbon-negative strategies (like waste-to-energy recovery). However, roadmap for PCMs’ application in carbon-neutral transition is ambiguous in the current academia, and a state-of-the-art overview on latent thermal storage is necessary. In this study, a comprehensive review was conducted on cutting-edge technologies for carbon-neutral transition with latent thermal storages. Both carbon-positive and carbon-negative strategies in the operational stage are reviewed. Carbon-positive solution mainly focuses on energy-efficient buildings, through a series of passive, active, and smart control strategies with artificial intelligence. Passive strategies, to enhance thermal inertia and thermal storage of building envelopes, mainly include free cooling, solar chimney, solar façade, and Trombe walls. Active strategies mainly include mechanical ventilations, active water pipe-embedded radiative cooling, and geothermal system integration. The ultimate target is to minimise building energy demands, with improved utilisation efficiency on natural heating (e.g., concentrated solar thermal energy, geothermal heating, and solar-driven ventilative heating) and cooling resources (e.g., ventilative cooling, geothermal cooling, and sky radiative cooling). As one of the most critical solutions to offset the released carbon emission, carbon-negative strategies with PCMs mainly include cleaner power production and waste heat recovery. Main functions of PCMs include energy efficiency enhancement on cleaner power production, steady steam production, steady heat flux via the latent storage capacity, and pre-heat purpose on waste heat recovery. A thermal energy interaction network with transportation is formulated with PCMs’ recovering heat from internal combustion engines and spatiotemporal energy sharing, to provide frontier research guidelines. Future studies are recommended to spotlight standard testing procedure and database, benchmarks for suitable PCMs selection, seasonal cascaded energy storage, nanofluid-based heat transfer enhancement in PCMs, anti-corrosion, compatibility, thermochemical stability, and economic feasibility of PCMs. This study provides a clear roadmap on developing PCMs for transition towards a carbon-neutral district energy community, together with applications, prospects, and challenges, paving the path for combined efforts from chemical materials synthesis and applications.