As global plastic pollution is gaining increased attention, the use of bio-based plastics, especially in the food packaging sector, is growing in popularity. While this move is regarded as a solution to plastic pollution, it may shift or create detrimental impacts elsewhere in the production, consumption, management system, a possibility that is underexplored. The aim of the present study is to identify the potential challenges and trade-offs associated with the introduction of bio-based plastics in the food packaging industry, and highlight issues relevant to policy and decision-making processes. We employ a whole system approach to review the literature and assess holistically the performance of bio-based plastics, which looks at the entire lifecycle of bio-based plastic packaging (i.e. production, consumption, management) and considers wider aspects in the environmental, economic, social and technical sustainability domains. Based on our findings, we developed, and present herein, a sustainability decision matrix, a novel guiding tool, which can provide important insights into the potential impacts of the introduction of larger amount of bio-based plastic food packaging in the future and support decision-making processes. In conclusion, our preliminary high-level assessment of the bio-based plastics production, use and management system clearly reveals a number of blind-spots across the entire system that are currently ignored by the use of single-dimensional approaches. This highlights that the sustainability assessment of specific bio-based polymers requires thorough and further research that takes into account the type of feedstock, infrastructure availability, and interactions between sustainability domains, to ensure that the substitution of petrochemical-based plastics with bio-based alternatives in food packaging sector will not lead to unintended consequences.