This paper gives an account of the issues at play in Europe with regard to the transition to a bio-based economy. Agricultural crops have always been used for the production of food, feed, fibre and fuel. The Model T Ford-the first mass produced car-originally ran on bioethanol, and wood has been in use as a source for energy ever since the discovery of fire. What is new is that the balance between agricultural uses is changing under the pressure of an increasing need for food and feed, as well as the new need for biofuels and biomaterials. At the basis of this change lie several serious issues related to the current use of bio-based feedstock to secure energy supply, the future depletion of natural resources and global climate change. Innovations in industrial biotechnology are expected to play a crucial role in dealing with these issues in biomass use.