Abstract: Biomass power generation has both environmental and social benefits, which is of great significance in facilitating China’s energy consumption revolution and rural revitalization, and in achieving the goal of carbon peak and carbon neutrality. The biomass generation subsidy policies issued at the national level until December 31, 2020 were reviewed. Based on the theories and methods of policy tools, the implementation and existing problems of biomass generation subsidy policies in China were evaluated from three aspects and five links. The three aspects included environment, supply and demand, while the five links included research and development, investment promotion, raw material resources, production grid connection, and consumption. And the optimization suggestions of biomass power generation subsidy policies were put forward. The results showed: first, the biomass power industry did not have enough subsidies for research and development, raw material supply and infrastructure at the present stage. Second, the fiscal subsidies had a tendency to gradually decline and shift to market mechanism, while the innovation of corresponding policy tools and management systems were still lacking. China’s biomass generation subsidy policies should focus more on technology research and development, fully involve the intermediate chains and improve the incentive mechanisms. Also, the market should be vigorously fostered and strengthened, and the market mechanism should be introduced under the guarantee of supporting measures to promote the long-term sustainable development of the industry.