Energy is a crucial factor for urban development. Cities have a crucial role in climate change, as they use 2/3 of the world’s energy, producing 70% of greenhouse gas (GHG) emissions. In order to reduce the large ecological footprint of the utilization of conversional energy sources (coal, gas, and oil) and enhance a nation’s energy independence (security), it is crucial to find alternative fuels. Biomass residues are characterized as a sustainable and carbon-neutral energy source. Hence, this review describes a critical assessment of not only the quality characteristics of several waste and biomass residues for bioenergy production and biofuels but also the value-added products that could be produced from wastes to enhance industry (e.g., pharmaceutical, cosmetics, packaging industry, etc.). Furthermore, the challenges and potential solutions of waste utilization for bioenergy production and the transformation of value-added products for urban sustainability are also explored. Despite the high-quality characteristics and the availability of these wastes, several critical factors should be taken into account. Biomass residues could contribute to sustainable development goals (SDG), such as sustainable cities and communities, clean energy, responsible consumption and production, the economic growth of a country, and, as a result, urban development.