This　study　explores　the　causal　relationships　between　environmental　regulation　and　eco-efficiency　in　China＇s　industrial　and　power　sectors　using　a　vector　autoregressive　(VAR)　model　and　Granger　causality　tests.　By　analysing　data　from　2006　to　2020,　we　find　that　energy　structure　plays　a　pivotal　role　in　determining　eco-efficiency　within　the　industrial　sector,　while　imperative　environmental　regulations　are　a　significant　Granger　cause　of　eco-efficiency　in　the　power　sector.　Industrial　agglomeration　also　exerts　notable　effects　in　both　sectors.　These　findings　underscore　the　sector-specific　differences　in　the　effectiveness　of　environmental　regulations　and　highlight　the　need　for　tailored　policy　approaches　to　improve　eco-efficiency　across　industries.