Nowadays, waste wood is a valuable secondary raw material that can cover much of the wood-based panel industry's needs and a major source of renewable energy. The various categories of waste wood are described in European legislation and standards but in practice mostly followed industry practices relating to the purchase, classification and use of recovered wood. The European Panel Federation (EPF) proposes a three category classification system: untreated wood, non-hazardous treated wood, hazardous waste wood. The traditional practice of recycling in industry included mechanical handling of waste wood while new improved methods involve hydrothermal treatments. Of the total approximately 30 million cubic meters of recovered wood in Europe 38% is recycled, 34% is used for energy production and 28% ends up in landfills or composting. In the future recovered wood is expected to play an increasingly important role in the sustainability of wood-based panel industries as well as for the protection of the environment, and therefore new technologies are needed to fully explore this valuable resource.