Abstract It is obvious that Iran agricultural industry, unlike Brazil and USA, cannot afford to provide conventional biomass, i.e. sugary or starchy biomass for bioethanol production, mainly due to climatic and geographic conditions. With some exception of date (fruit), first-generation ethanol production triggers food vs. fuel debates in Iran and put nation to hunger. Agricultural products including apple, barley, carrot, corn, grape, orange, potato, rice, sugar beet, sugarcane, and wheat are consumed domestically, exported, or even lost because of poor harvesting and processing conditions such as transportation or packaging. These products may alone generate 21.56 million ton per annum green wastes upon processing in the food industry. Every year about 5.4 billion liters of bioethanol can be produced by establishing second-generation ethanol plants next to the food processing sectors. Seventy-seven-percent of this amount of bioethanol can easily support 5% ethanol (E5) policy to phase out the consumption of 4.2 billion liters methyl tert-butyl ether (MTBE) for raising the octane number of gasoline in the country. If more comprehensive policy is adopted, larger quantities of lignocellulosic feedstocks can be gathered from agro as well as forestry practices. Second-generation bioethanol technology can help Iran to tackle air pollution in its big cities and to address the adverse effects of MTBE on its populations and ecosystem. The other advantages are improvement of fuel security, mitigation of climate change, and development of economy. The motivation can be created through passing a framework policy to cut fossil fuel subsidies, to mandate bioethanol blends in gasoline, and to impose carbon taxes. Development of coherent socially and environmentally relevant strategies and facilitation of investment in bioethanol industry are also necessary.