The article examines the current state, potential, and future prospects of eco-friendly processing of organic waste in the European Union (EU) and Ukraine. It highlights the critical role of organic waste recycling in sustainable development, circular economy, and environmental protection. The best European pactices in waste prevention, reuse, recycling, and energy recovery, which serve as benchmarks for Ukraine’s waste management reforms, were analysed. The study also analyzes Ukraine’s organic waste processing potential, focusing on agricultural residues, food industry by-products, and biodegradable municipal waste. Findings demonstrate that adopting an integrated approach to organic waste management can reduce environmental risks and greenhouse gas emissions, stimulate renewable energy production, enhance energy security, and support rural development. The article emphasizes that by adapting EU best practices, Ukraine has significant opportunities to strengthen its sustainability and move toward a resource-efficient circular economy model.