This paper presents a comprehensive literature review on the adoption of blockchain technology in sustainable supply chain management (SSCM), with a particular focus on European Union (EU) policies from 2019 to 2024. As supply chains grow increasingly complex due to rising demands for sustainability and transparency, blockchain has become a crucial tool in enhancing traceability, security, and efficiency. The review examines EU policies and initiatives promoting blockchain, and their impact on supply chain management. The findings underscore blockchain’s potential to transform supply chains by improving sustainability and compliance with Environmental, Social, and Governance (ESG) criteria. However, challenges such as scalability, interoperability, and regulatory compliance are identified as significant barriers to widespread adoption. Blockchain holds great promise for fostering sustainable supply chains in Europe, but the associated challenges with global adoption must be addressed to fully leverage its capabilities.