The present study determines the best conditions for the fermentation of Schinus molle drupes by the combination of different types of hydrolysis with the search for an adequate yeast strain. Schinus molle seed residues from an essential oil extraction plant (EOEP) have a high potential for ethanol production. Native yeast strains were isolated from the residues and were used to ferment the lignocellulosic residues, along with baker's yeast (Saccharomyces cerevisiae) at 30 °C and pH 5.5 for comparison. Morphological and biochemical characterizations were carried out on the isolated yeast strains. Thermogravimetric and high-performance liquid chromatography analyses were done on the S. molle seeds (fresh and residue) to determine the ethanol production potential. The followed methodology included increasing the sugar content by hydrolysis with chemical (sulphuric acid, acetic acid, and sodium hydroxide), physical (thermal, vacuum, and ultrasound), and enzymatic treatments (amyloglucosidase and α-amylase). Once the optimum combination of yeast-hydrolysis was determined, a comparison of the greenhouse gas emissions between the original and proposed processes was done. The fermentation of the residues might replace methane from uncontrolled decomposition and reduce the solid residues in 50%/day, hence the EOEP global warming potential is reduced by 47%. The yearly income was estimated to increase by USD 2592.50 from 6302.6 L of ethanol produced from the residues.