In recent years, various environmental issues associated with plastics have become well documented, spurring a growing volume of research on the barriers, drivers, and solutions related to the development and commercialization of sustainable—bio-based, biodegradable and circular—plastics. However, a systemic perspective that addresses the complex interdependencies across the value chain has so far been missing from the analysis. Based on a qualitative study covering the entire plastics value chain in Finland and Northern Europe, this paper addresses the research gap with two main findings. First, the paper identifies three core conundrums that describe the complex and interrelated nature of technological, operational, economic, and societal factors, which are inhibiting the transition to sustainable plastics at three critical junctures of the value chain. Second, the findings describe four solution mechanisms, which suggest that the value chain actors need to shift (i) from the supply of bulk materials to material solutions; (ii) from firm-centric material development to cross-tier collaboration; (iii) from price competition to competition on sustainability benefits; and (iv) from isolated technologies to infrastructure development. These findings extend our understanding of the systemic challenges for the transition to a sustainable plastics economy and shed new light on the ways in which companies can address the challenges for a system-wide impact.