The construction sector faces a dual challenge: meeting growing global demand while achieving deep decarbonisation in line with the European Green Deal and the EU Bioeconomy Strategy. Bio-based construction materials offer significant potential to reconcile these objectives through carbon sequestration, reduced embodied emissions, improved indoor environmental quality, and compatibility with circular economy principles. However, their transition from niche applications to mainstream specification remains limited. This paper provides a comprehensive review of bio-based construction materials and examines the systemic barriers constraining their large-scale adoption. The analysis identifies four interrelated categories of constraints—structural, economic, technical, and enabling—and emphasises the conditional relationships between them, highlighting the implications for policy prioritisation and sequencing. The strategic urgency of this transition has been reinforced by the 2026 Strait of Hormuz crisis, which triggered severe disruptions to global petrochemical supply chains and exposed the structural vulnerability of European construction to fossil-derived material inputs, reframing bio-based alternatives as a supply security imperative alongside an environmental one. The findings show that the primary obstacles to adoption are not technological, but institutional and economic, particularly regulatory fragmentation, the absence of harmonised standards, supply chain limitations, and persistent market failures that disadvantage bio-based solutions.The paper concludes that scaling bio-based construction materials requires coordinated action across governance, market design, and industrial policy. Without addressing these systemic constraints, advances in material innovation and performance are unlikely to translate into widespread adoption.