This paper summarizes the results obtained in the course of the development of a specific group of biocomposites with high functionality of flame retardancy, which are environmentally acceptable at the same time. Conventional biocomposites have to be altered through different modifications, to be able to respond to the stringent standards and environmental requests of the circular economy. The most commonly produced types of biocomposites are those composed of a biodegradable PLA matrix and plant bast fibres. Despite of numerous positive properties of natural fibres, flammability of plant fibres is one of the most pronounced drawbacks for their wider usage in biocomposites production. Most recent novelties regarding the flame retardancy of nanocomposites are presented, with the accent on the agents of nanosize (nanofillers), which have been chosen as they have low or non-toxic environmental impact, but still offer enhanced flame retardant (FR) properties. The importance of a nanofiller’s geometry and shape (e.g., nanodispersion of nanoclay) and increase in polymer viscosity, on flame retardancy has been stressed. Although metal oxydes are considered the most commonly used nanofillers there are numerous other possibilities presented within the paper. Combinations of clay based nanofillers with other nanosized or microsized FR agents can significantly improve the thermal stability and FR properties of nanocomposite materials. Further research is still needed on optimizing the parameters of FR compounds to meet numerous requirements, from the improvement of thermal and mechanical properties to the biodegradability of the composite products. Presented research initiatives provide genuine new opportunities for manufacturers, consumers and society as a whole to create a new class of bionanocomposite materials with added benefits of environmental improvement.