Paper and paperboard are the most widely used packaging materials for both food and non-food products. Because they are composed of highly porous cellulose networks, they readily absorb moisture in high humidity environments or when in contact with liquid or high moisture foods. Therefore they are often coated with hydrophobic coating materials such as polyethylene (PE) to improve their water-resistant properties. One of the major uses of such hydrophobic material coated paperboard is a disposable single-use paper cup with or without a lid. Today, the paper-based materials are coated with a thin layer of a petroleum derived plastic, mostly polyethylene, which has provided the cups and other packaging solutions with the required barrier property and water resistance. Hence, the ongoing challenge is to coat the paper with a biobased, hydrophobic polymeric material which must be repulpable or otherwise biodegradable in most of the environments considered. Many interesting developments are already known for the manufacturing of cellulose-based products, such as microfibrillated celluloses (MFC's) or modified celluloses, usable in the paper packaging industry. Paper and paperboard in combination with Green-Polyethylene, MFC's and polyhydroxyalkanoates (PHA's) seems to be the most promising solution for the packaging industry in the near future and the development of the thermoplastic modified celluloses for the next future. Regarding environmental considerations, PHA is a promising solution for the paper packaging industry but the problem of material recycling has to be solved and a solution comparable with the recyclability of PE-coated paper packaging products should be obtained. This review consists of a critical analysis of published results of 1-way food packaging and discusses more in detail what will be necessary for the development of 1-way food packaging based solely on wood derived products and biodegradable polymers.