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The global increase in seafood demand has resulted in significant growth in aquaculture production in a wide range of aquatic species. Consequently, this has led to an industry‐wide need to find sustainable feed ingredients that would meet the nutritional requirements used in aquafeeds. The associated dependency on plant by‐products as the major alternatives has brought concerns to aquaculture through associated carbon footprint, increase deforestation and arable land use to meet the demands of plant proteins and oils, and the constraining effects of plant by‐products has on farmed aquatic animal growth and health. Animal by‐products (ABPs) are produced as a direct consequence of terrestrial animal production and the associated meat processing industries. The link between feeding meat and bone meal (MBM) and bovine spongiform encephalopathy (BSE) outbreak in Europe during the 1980s resulted in a ban of its use animal feeds. This led to a radical overhaul of the rendering industry, including the use of only low‐risk ABP and the development of rendering processes to reduce the risk of prions that causes BSE to enter the food chain. The resulting processed animal proteins (PAPs) are considered safe to be used in farmed animal feeds. This review examines how ABP production has changed due to the BSE outbreak, leading to the current commercially available PAP products for aquafeed use. We evaluated how these products can be effectively used as viable protein sources in aquaculture and examine their limitations and the potential advancements that could lead to a more circular food production system. [ABSTRACT FROM AUTHOR]