This paper analyzes the biomass resources and related industry policies in Xinjiang Production and Construction Corps, as well as the economics of developing distributed biomass direct-fired heating technology in typical areas, and analyzes the feasibility of distributed biomass direct-fired heating technology in Xinjiang Production and Construction Corps. The results show that cotton straw resources are very abundant in the whole production and construction corps, and the biomass bulk fuel industry policy is basically not supported by the policy. In addition, the technical and economic analysis shows that the dynamic investment payback period after tax of distributed biomass direct-fired heating project is 13.44 a, and the internal rate of return (IRR) is only 4.38%. Although distributed biomass direct-fired heating technology has high environmental benefits, the current heating price is 22 Yuan/m² based on coal-fired price in Xinjiang Production and Construction Corps and the actual subsidy policies are not relevant, even if the purchase price of cotton straw is only 120 Yuan/t, the investment economy of the distributed biomass direct fired heating technology project is still poor.