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Dairy feeding systems in many semi-arid countries are based on imported concentrates and forages. This has economic and ecological implications given the increase in global feed prices and greenhouse gas (GHG) emissions from land use change. This paper aims to explore alternative dairy feeding systems under semi-arid conditions, using Jordan as an example. The feedings systems under investigation vary in their share of food industry by-products (replacing concentrates in the diet) and are compared against the current concentrate-based feeding systems. The systems are evaluated against three criteria: their nutritional value, their impact on the cost of milk production, and their GHG mitigation potential. Feed samples from eleven food industry by-products and ten conventional feeds were collected from food factories and from three typical dairy farms, representing the typical large-, medium- and small-scale farm types, respectively. Feed samples were analysed for their chemical composition and metabolisable energy contents. In addition, economic and production farm data were collected and entered into a model for GHGs calculation and economic evaluation. The results suggest that inclusion of locally available food industry by-products in the rations of milk cows in semi-arid production systems can be instrumental in reducing production costs and mitigating GHG emissions. Cost of milk production in the model farms can be lowered by up to 14 %; mitigation of CO2 eq. emission ranged between 70 and 290 g CO2 eq./kg milk. The degree to which these benefits can be reaped is positively related to the level of inclusion of by-product feeds in lactating cows’ diets.