Abstract: There will be a big pressure on the emission reduction of liquid fossil fuel. Developing the liquid biomass can accelerate the process of emission reduction and ease food security crisis in China. A theoretical model and analytic framework exampled by fuel ethanol was established to analyze the possible effects of biomass development on the Chinese emission reduction methods and food security in the cases of both short-term and long-term dynamic equilibrium. The results showed that to achieve emission reduction targets, the Chinese government should take the initiative to assume the costs of energy structure adjustment and support the sustainable development in fuel ethanol industry by subsidizing non-food energy crops planting, fuel ethanol producing and fuel ethanol consuming for the purpose of easing emission reduction resistance and food security threat.