The invention relates to an environment-friendly biomass composite fuel prepared from sludge garbage and a preparation method of the environment-friendly biomass composite fuel. The environment-friendly biomass composite fuel is prepared from a biomass raw material, sludge garbage, fire coal, a combustion improver, a catalyst, a desulfuration nitrogen fixing agent, a stabilizer and a dust and harm removal agent. The environment-friendly biomass composite fuel prepared from the sludge garbage has the advantages of quick ignition, strong combustion fire, long combustion resistance, full combustion, high temperature, less dust and the like; meanwhile, under the action of prepared reagents, discharge of toxic and harmful substances is effectively eliminated, and the environmental pollution is avoided; furthermore, combustion is stable and heat is uniformly distributed, so as to prevent slagging of a boiler, prolong the service life of the boiler and reduce the operation cost; particularly in a preparation process, by the combination of the component proportion of the raw materials and a preparation technology which are preferred according to an actual working condition of the boiler, the combustion performance condition can be adjusted, the boiler can realize full-load efficient operation, and the heat efficiency of the boiler and the fuel heat use efficiency are improved; the environment-friendly biomass composite fuel is applicable to being used in a civil boiler and an industrial boiler.