However, even though second-generation bioethanol has the potential to tackle the issues of energy security and environmental degradation, there are a few obstacles that need to be addressed and overcome. Hence, this chapter highlights the issues hindering second-generation bioethanol from being implemented in full scale. On the other hand, some recommendations will be made to solve these issues in terms of energy policy, which is vital to promote this new technology to become a practical and reliable source of energy in the future. If these biomass residues were to be converted as second-generation bioethanol, the nutrients will be stripped off from the soil and consequently dwindle the soil's fertility. As far as Proalcool is concerned, policy or strategy is still inadequate to ensure that second-generation bioethanol would be a major source of renewable energy.