<p>Bioethanol is increasingly recognized as a key component in the shift toward sustainable, low-carbon energy systems. Among the four generations of bioethanol, the first (1G) and second (2G) generations are the most studied and implemented due to their technological maturity. 1G bioethanol is produced from food-based crops such as sugarcane, corn, and wheat, offering relatively simple processing but raising concerns about food security and land-use change. Its greenhouse gas (GHG) reduction potential ranges from 20 to 60%. In contrast, 2G bioethanol, produced from lignocellulosic biomass and agro-industrial residues, aligns with circular economy principles and offers higher sustainability. It achieves GHG reductions of 70–90% and yields up to 340 L per ton of dry biomass. However, high pretreatment costs and complex processing hinder its large-scale deployment. This review analyzes recent progress in biomass valorization for 1G and 2G bioethanol, covering feedstock types, conversion technologies, and microbial systems. Emphasis is placed on techno-economic evaluations and industrial implementation trends. Globally, bioethanol production is led by the United States and Brazil, which together account for over 80% of output. The review concludes with strategic insights to improve process efficiency, reduce costs, and enhance the role of bioethanol in global energy markets.</p> Graphical Abstract <p></p>