Abstract: As the substitute fuel of petroleum, grain alcohol is significant to China regarding its daily intensive need of energy. However, the popularized usage of grain alcohol as fuel is directly affected by the grain lifecycle, economic benefit and environmental benefit. After completly analyzing the benefits of grain alcohol as fuel, it is concluded that most grain except broomcorn has a comparatively lower conversion rate of alcohol. In addition, the economic benefit is relatively low comparing its high production cost under the current condition. However, it has an excellent social benefit of reducing energy shortage, improving farmer’s income and increasing employment. Besides, it helps reduce gas pollution caused by motor vehicles.