Food processing industries generate substantial by-products that contain valuable bioactive compounds, presenting an opportunity to recover essential oils (EOs) while addressing waste management challenges. This chapter examines the sustainable extraction of essential oils from food processing residues as an innovative approach to circular economy implementation. Food by-products, including fruit peels, seeds, pomace, and processing residues, contain significant concentrations of volatile compounds with demonstrated antioxidant, antimicrobial, and preservative properties. These materials yield oils rich in monoterpenes, sesquiterpenes, and their oxygenated derivatives applicable across pharmaceutical, cosmetic, food, and agricultural industries. The chapter analyzes conventional extraction methods alongside emerging green technologies including ultrasound-assisted extraction (UAE), microwave-assisted extraction (MAE), and supercritical fluid extraction (SFE). These innovative techniques significantly reduce processing time, energy consumption, and solvent requirements while enhancing extraction yields and preserving thermolabile compounds. Applications of these technologies to diverse food by-products are evaluated, with particular attention to extraction parameters and resulting chemical profiles. Advancements in process optimization and equipment design continue to improve economic viability and scalability for industrial implementation. The integration of essential oil recovery into biorefinery concepts further maximizes resource utilization while enhancing sustainability. By transforming underutilized residues into high-value essential oils, these approaches create economic opportunities while supporting environmental objectives through reduced waste generation and resource conservation.