This article examines woodfuel policy challenges and opportunities in Malawi two decades after woodfuel-crisis narratives and counter-narratives. A nuanced examination of woodfuel supply, demand, use, and markets illuminated options to turn stagnant policies based on charcoal ‘bans’ and fuel-substitution into proactive, realistic ones acknowledging woodfuel dominance and its socio-economic importance. Findings revealed growing, spatially differentiated woodfuel deficits in southern and central Malawi and around Blantyre, Zomba and Lilongwe cities. Poverty, limited electricity access, reliability and generation exacerbated by tariff subsidies, and complex fuel-allocation decisions restricted energy-ladder transitions from woodfuels to electricity, producing an enduring urban-energy mix dominated by charcoal, thereby increasing wood consumption. Diverse socio-political interests prevented lifting of the charcoal ‘ban’ despite progressive forest laws. Despite implementation challenges, lessons already learnt, efficiency and poverty-reduction arguments, limited government capacity, growing illegal production of charcoal in forest reserves, and its staying power, make targeted community-based forest management (CBFM) approaches more practical for regulated, commercial production of woodfuels than the status quo. New differentiated policies should include commercial woodfuel production and licensing for revenue and ecological sustainability under CBFM or concessions within and outside selected reserves, an enterprise-based approaches for poverty reduction, smallholder/private tree-growing, woodfuel-energy conserving technologies, improved electricity supply and agricultural productivity.