The role of LCA in informing the development of a sustainable and circular bioeconomyis discussed. We analyse the critical challenges remaining in using LCA and propose improvements needed to resolve future development challenges. Biobased systems are often complex combinations of technologies and practices that are geographically dispersed overlong distances and with heterogeneous and uncertain sets of indicators and impacts. Recent studies have provided methodological suggestions on how LCA can be improved for evaluating the sustainability of biobased systems with a new focus on emerging systems, helping to identify environmental and social opportunities prior to large R&D investments. However, accessing economies of scale and improved conversion efficiencies whilst maintaining compatibility across broad ranges of sustainability indicators and public acceptability remain key challenges for the bioeconomy. LCA can inform, but not by itself resolve this complex dimension of sustainability. Future policy interventions that aim to promote the bioeconomy and support strategic value chains will benefit from the systematic use of LCA. However, the LCA community needs to develop the mechanisms and tools needed to generate agreement and coordinate the standards and incentives that will underpin a successful biobased transition. Systematic stakeholder engagement and the use of multidisciplinary analysis in combination with LCA are essential components of emergent LCA methods.