There are three main viewpoints in this article： First, the author elucidated the major benefits of using ethanol as the automobile fuel — reducing air pollution, relieving energy shortage and providing new economic growth. Second, this article provided a detailed analysis of technical requirements for implementing the ethanol project in China, such as raw material supply, energy consumption reduction, waste treatment, investment and profitability. The possible solutions for these requirements were also discussed. In the end, the author laid out a blueprint for the research and development projects in the field of ethanol fermentation for the first decade of the new century.