<p>Secondary aluminum dross (SAD), classified as hazardous waste, poses significant environmental and resource management challenges due to its complex phase composition and high reactivity. Of particular concern is aluminum nitride (AlN), which hydrolyzes in the presence of moisture, releasing ammonia and contributing to environmental pollution. Despite its low concentration, AlN holds potential for conversion into high-value ceramic materials, underscoring the importance of effective and sustainable treatment strategies. Conventional hydrometallurgical and pyrometallurgical routes are frequently limited by technical, economic, and environmental factors. This review critically evaluates current treatment technologies, emphasizing their limitations and potential for resource recovery. Special attention is given to high-temperature processing under N₂ atmospheres, which can convert AlN and other refractory oxides into nitrogen-rich ceramics such as AlON and Si₃AlON. These advanced oxynitride materials offer superior performance and expand application possibilities, thereby improving the sustainability and economic value of SAD recycling. In addition, the review discusses the environmental impacts and economic feasibility of various treatment pathways, and outlines key directions for future research and industrial implementation. Despite notable advancements, challenges remain in achieving industrial scalability, economic viability, and consistent product performance. Future research should prioritize the development of hybrid treatment technologies, comprehensive life cycle assessments, and policy frameworks that incentivize sustainable practices.</p> Graphical Abstract <p></p>