Abstract: In order to evaluate the potential of agricultural biomass power generation and the environmental benefits of emission reduction in China, the theoretical and actual available quantities of agricultural biomass resources in China are estimated by using the relevant statistical data and combining with the relevant grass to grain ratio coefficient and the resource availability coefficient. The low calorific value of all kinds of agricultural biomass resources is calculated to evaluate their power generation potential. Based on the LCA theory, the environmental benefits of emission reduction are calculated according to the emission reduction of various resources and pollutants and their resource and environmental values. The research results show that in 2018, China’ s net surplus of agricultural biomass power generation potential is 14 051.38 MW, and the environmental benefit of emission reduction is 14 943 139.79 Yuan. The priority should be given to the distribution of agricultural biomass power generation industry in areas with good resource endowment and development conditions, and the positive externalities of agricultural biomass power generation should be compensated. Specifically, it should: （1）Integrate the disordered state of the supply side and give full play to the advantages of resources;（2）Attach importance to resource endowment and development conditions, and follow the principle of development according to local conditions;（3）Compensate the positive externality of agricultural biomass power generation and actively introduce CDM projects.