The rice-wheat cropping system encompasses about 10.6 million hectares (mha) in Punjab and Haryana, and plays a vital role in boosting per capita food grain availability in irrigated regions. Traditionally, farmers typically collected wheat and rice residues from their fields to use as cattle fodder, bedding for livestock, roofing material, or fuel. With the rise of mechanised harvesting, however, many rice growers now opt to burn the leftover residues directly in the fields, as these materials hinder tillage and sowing for the subsequent crop. This practice of residue burning is harmful, as it accelerates the depletion of soil organic matter and nutrients, heightens greenhouse gas (GHG) emissions, worsens air pollution, and diminishes soil microbial activity. In addition, large-scale burning of rice residue has also added health hazards, as evidenced by a reported increase in respiratory problems and itching of the eyes in the local population. By adopting ethanol blending practices, India is advancing towards a sustainable energy future. As the world’s third-largest energy consumer, India has long relied on oil imports to meet its energy demands, resulting in energy security challenges and significant foreign currency outflows. Ethanol blending presents a promising solution, enabling India to reduce its dependency on imported oil while addressing environmental issues. Crop residues from rice could be an essential resource base for bioethanol production. This approach aligns seamlessly with circular economic strategies and zero-waste initiatives. This chapter sheds light on the opportunities and challenges of bioethanol production from rice residues in Punjab and Haryana, considering various factors, including biomass availability, production capacities, environmental constraints, economic factors, social and public policy influences, and supply chain factors.