In 2007, China's fuel ethanol output reached 1.6 million tons, of which 80% used corn as raw materials. Based on the proportion 1:3.3, more than four million tons of corn was consumed.

In 2008, China's fuel ethanol production capacity will increase rapidly, thanks to several fuel ethanol projects to be put into operation successively in the year. It is estimated that China's annual fuel ethanol output will reach five million tons in 2010 and utilization rate of ethanol gasoline will be more than 50%. Moreover, corn-based ethanol has stopped expanding production capacity, as government policies have clearly restricted the development of grain-based ethanol. Therefore, developing non-grain ethanol has become an inevitable trend.

China's domestic enterprises have accelerated biodiesel development. China's some conglomerates have completed their trial production of biodiesel, including China National Petroleum Corp., China's largest natural gas and crude oil producer, COFCO, the largest importer and exporter of grains, and China National Off-shore Oil Corp., China's largest off-shore oil producer. It is forecasted that China's biodiesel output will increase rapidly in 2008 and 2009 and will reach two million tons in 2010.

China's biological energy power generation has developed rapidly and the total installed capacity has reached 2.2 million kW, of which 1.7 million KW was from Bagasse co-generation and 500,000 KW was powered by agriculture and forestry wastes, methane, direct-burning of rubbish and landfill gas. Generally speaking, efforts made to develop biological energy are still limited, therefore, China's bioenergy has a huge potential for future development.

China has sufficient raw materials resources for production of biomass. Only the agricultural wastes can be converted into energy, which is equivalent to 500 million tons of standard coal and 350 million tons of crude oil (about 2.5 billion barrels).

Chinese government has strongly supported the development of bioenergy and has launched preferential policies for biomass energy producers, including tax breaks and direct subsidies to some products.