With the rising demand for energy, the forest-based circular bioeconomy is gaining recognition as a strategy for sustainable production and consumption of forest resources. However, the forest-based bioeconomy remains underexplored from the perspective of deadwood conservation in public forests. While conducting a literature review and examining the case of Kenya, this study fills a gap in the literature to provide policy suggestions for sustainable forest resource utilization. The results from global literature indicate that deadwood performs essential social, economic, and environmental functions in the circular bioeconomy and sustainable development. Similarly, in Kenya, deadwood resources provide many socially beneficial bioproducts and services. However, the absence of scientific research and detailed guidelines for deadwood conservation may lead to the distortion of the ecological balance in public forests because of the legally sanctioned removal of deadwood, particularly firewood. Moreover, if the status quo remains, with approximately 70% of the growing population consuming deadwood for domestic use and the demand increasing, as shown by the current wood deficit in the country, there will be a major dilemma concerning whether to conserve deadwood for biodiversity or energy. Therefore, averting crisis and providing maximum deadwood value to society requires guidelines and comprehensive research in addition to a cultural and behavioral shift in energy consumption in a manner that embraces the forest-based circular bioeconomy of deadwood.