This chapter discusses the notion of the circular bioeconomy, and the drivers and barriers for adding value to waste and thereby creating a more sustainable bioeconomy. It highlights the special role of governance including innovation policy in developing the bioeconomy. The bioeconomy is an emerging area for research, policy and economic activity and there are many views on it. Our focus is on the role of innovation in waste valorisation, including technological as well as social and institutional innovation. We discuss the waste pyramid that illustrates the hierarchy of alternative forms of waste management in terms of resource efficiency and sustainability, and the associated notion of the cascading use of biological resources. We conceptualise the different forms of waste management as “integrated socio-technical systems of production and consumption”. This concept brings into play the body of literature on socio-technical transitions, innovation and governance that is central for analysing the patterns and dynamics of waste valorisation.