Slow pyrolysis can be used to convert residual agricultural biomass into energy-dense biochar along with its by-product, pyrolysis liquid, for diverse applications. Due to its high concentration of bioactive chemicals, pyrolysis liquid has gained interest as a potential wood protectant. This study aims to evaluate the efficacy of slow pyrolysis liquid from sugarcane bagasse (Saccharum spp.) for wood protection against fungi and termites and its water-leaching properties. Pyrolysis liquid was obtained from slow pyrolysis at a temperature of 500 °C, a heating rate of 10 °C/min, and a holding time of 60 min. Specimens of European beech wood (Fagus sylvatica) and Scots pine sapwood (Pinus sylvestris) were impregnated with pyrolysis liquid using different concentrations and dried at different drying temperatures. A higher drying temperature (103 °C) was found to promote the agglomeration of pyrolysis liquid inside wood cells and lower the leaching rate. Pyrolysis liquid was effective against termites (Reticulitermes flavipes) as a repellent and toxic agent at a concentration of 25%. Higher concentrations of 50% and 100% were required to protect against certain types of Basidiomycete fungi (Coniophora puteana and Rhodonia placenta, brown rots and Trametes versicolor, a white rot). However, pyrolysis liquid remains leachable in water, with 3-methyl-1,2-cyclopentanedione, 2,6-dimethoxyphenol, and phenol identified as the principal compounds leached from the treated wood. Further studies should focus on investigating formulation strategies to improve fixation, using the minimum product for extended efficacy, and minimizing impacts on human health and the environment.