With the progressive depletion of fossil fuel resources and intensifying global environmental challenges, microbial energy has emerged as a sustainable and clean energy substitute, playing a pivotal role in safeguarding national energy security and advancing the green transformation of the socio-economic landscape. This study provides a comprehensive analysis of the current status, technological breakthroughs, and challenges of China's microbial energy industry, highlighting its potential to optimize energy structures and promote sustainable development. While China has achieved milestones in microbial fuel cell, lipid production, and ethanol technologies, critical challenges remain, including feedstock diversification, core technological bottlenecks, and energy conversion efficiency. To achieve high-quality development of the industry, China must prioritize policy-guided initiatives, accelerate research and development of key technologies, and establish efficient industrial eco-clusters. Specifically, high-quality development should focus on: (1) technological innovation, such as metabolic pathway optimization and electrochemical coupling; (2) industrial scalability, including cost reduction and supply chain optimization; and (3) policy support, encompassing legal frameworks and financial incentives. Through these efforts, microbial energy is expected to become a vital component of China's new energy system, supporting the national goals of carbon peaking and carbon neutrality while contributing to global energy sustainability.