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This study seeks to dissect the basic factors that can elucidate the efficiency and innovation in biomass utilization to control carbon dioxide (CO2) emission and economic growth nexus particularly at the time that the worldwide CO2 emission is at an all-time high and COVID-19 is ravaging the word. We use data principally from the World Bank Indicators covering the period 1990–2016 to study the nexus among biomass utilization, economic growth, and CO2 emission based on the moderating role of biotechnology in China. On the basis of the results of our preliminary tests, we apply the autoregressive distributed lag (ARDL) for this analysis and employ the nonlinear autoregressive distributed lag (NARDL) as a robust check and also deploy the vector error correction model (VECM) to determine the direction of causality. We find that long-run relationship exists among the factors in this study. We additionally find that biotechnology has a critical but negative relationship with CO2 emission in China. Through hierarchical multiple regression analysis and PROCESS macro for mediation, moderation, and conditional process, we establish that biotechnology significantly moderates the relationship between biomass utilization and CO2 emission in China. Again, we discover that biomass utilization significantly decreases CO2 emission in China. Through the ARDL, NARDL, and VECM, we find empirical support for the growth hypothesis in China. We conduct a series of diagnostic tests that prove the robustness of our estimates. Based on our empirical evidence, this study recommends that China seeks sustainable economic development and environmental sustainability simultaneously by prioritizing biomass utilization and biotechnological innovation in the country. [ABSTRACT FROM AUTHOR]