Biomass is a very important renewable energy and plays an important role in the energy structure of China. Here, the role of forestry waste in producing energy in China was analyzed and the availability of forestry waste for biofuel production, theoretically collectable amounts of forest biomass, and density of forestry waste were assessed. Agricultural and forestry waste are important biomass resources. The potential for using forestry waste as a low cost substrate for producing fuel ethanol using existing forestry resources and techniques was analyzed, and the feasibility of producing fuel ethanol in different Chinese provinces was assessed using the specific situation for each province. The results showed that 1081.73 × 106t of forestry waste could be produced in China, and 270.43 × 106t (25% of the amount that could be collected) could be used to produce fuel ethanol. Assuming 10t of sawdust could be converted into 1t of ethanol, 27 × 106t of ethanol could be produced from forestry waste. Different provinces have different potentials for producing ethanol from forestry waste, Guangdong Province, Guangxi Province, Sichuan Province, and Yunnan Province having higher potentials than the other provinces. It was predicted that 4478 × 106t of fuel ethanol could be produced from woodcraft waste by 2020, and the provinces with the most potential were found to be Fujian Province, Heilongjiang Province, Jilin Province, Shanxi Province, Sichuan Province, Xinjiang Province, and Yunnan Province. Using forestry waste to produce ethanol could alleviate the energy shortage in China.