SECURITY CONCERN, INTENTION TO RAISE FARMER INCOME, STATE OF THE ART TECHNOLOGIES, ENVIRONMENTAL ISSUES MAKE GOVERNMENT TO INVEST SIGNIFICANTLY ON Biofuel PRODUCTION. THE DEMAND OF ETHANOL AS SUBSTITUTE OF FOSSILE FUEL IS SOARING. RECENTLY, AMERICAN LEGISLATORS PASSED A LAW WHICH EVERY GASOLINE PRODUCERS MUST ADD 10% BIOETHANOL TO THEIR PRODUCT. FIRST GENERATION OF BIOETHANOL MAINLY DERIVED FRON FOOD PRODUCTS. THEREFORE, PROBLEMS SUCH AS: INCREASE OF CO2 EMISSION, NET ENERGY LOSS AND INCREAS OF FOOD PRICE BECOME INEVITABLE. ON THE OTHER HAND, SECOND GENERATION (G2) OF BIOETHANOL COME FROM LIGNOCELLULOSIC MATERIALS AND HAVE MANY ENVIRONMENTAL ADVANTAGES. ALTHOUGH, CONVERSION OF AGRICULTURAL WASTE MATERIALS TO Biofuel STILL HAS MANY CHALLENGES, IT IS POSSIBLE AND SOME COUNTRIES BUILT BIOETHANOL G2 PRODUCTION PLANTS. THE PRODUCTION OF BIOETHANOL G2 BASICALLY INVOLVED INFOUR STEPS: PRETREATMENT, SACCHARIFICATION, FERMENTATION, PRODUCT SEPERATION AND PURIFICATION. IN EACH STEP WE DISCUSSED DIFFERENT METHODS AND IDEAS TO IMPROVE THE PRODUCTIVITY AND COST BENEFIT ABILITY.