Tin (IV) oxide (SnO2) nanostructures are regarded as one of the most popular materials for conventional gas sensors, due to their high surface area and fast response in regard to most reducing and oxidizing gases. However, their high operating temperature (>200 °C) leads to high power consumption and limits their applications. Here, a new nanocomposite fiber materials, consisting of undoped and doped (nickel and palladium) SnO2 nanorods, polyaniline (PANI), and polyhydroxy-3-butyrate (P3HB) are synthesized via the hydrothermal method,followed by an in situ polymerization and electrospinning technique. The as-synthesized nanocomposites are tested using ethanol gas at different operating temperatures: 25 °C (room temperature), 60 °C, and 80 °C. The results reveal that all samples began to show a response at 80 °C. Pd:SnO2/PANI/P3HB nanocomposite fiber sensors demonstrate a relatively higher response than that of SnO2/PANI/P3HB and Ni:SnO2/PANI/P3HB nanocomposite sensors. At 80 °C , the Pd:SnO2/PANI/P3HB nanocomposite sensor records a response (R0/Rg ) of 1610, with a response time (Tres) of 90 s and a recovery time (Trec ) of 9 min in relation to 1000 ppm ethanol gas in N2. The sensor also displays a good level of response (R0/Rg = 200) at a low concentration level (50 ppm) of ethanol gas. Structural and chemical characterizations indicate that the ethanol gas sensing performance of Pd:SnO2/PANI/P3HB nanocomposite fibers can mainly be attributed to the p-n heterojunction, fiber geometry, and one-dimensional structure of SnO2 and to the presence of the Pd catalyst. This bio-nanocomposite fiber has the potential to be a breakthrough material in biodegradable low temperature ethanol sensing applications.