Energy has a huge environmental and economic implications in the modern community. Despite the rapid economic growth of China in the past two decades, it can further improve through sustainable green energy with more energy-efficient industries, so as to maintain a good balance between economic and social development. The performances of energy and carbon dioxide emissions are the critical indicators. On this basis, this work measures the impact of environmental regulations on energy efficiency based on 2008-17 panel data from 30 provinces in China. The total factor energy efficiency index (TFEEI) is calculated by the non-radial distance function (NDDF). In order to study the nonlinear relationship between environmental regulations and TFEEI, the dynamic threshold panel model is used under different environmental regulations, which can solve effectively endogenous problems and regional heterogeneity. The results show that, for energy-intensive industries, the overall average TFEEI level is still very low, with average values of 0.55 and 0.58, which are well below the ideal value (i.e., 1). Further, the dynamic panel data model findings showed a U-shaped significant relationship between China's TFEEI and environmental regulation. The findings reveal that environmental regulation effect on TFEI rises steadily as the values of Market-Based Environmental Regulations (MERs) and Command and control Environmental Regulations (CCERs) and surpass the corresponding thresholds. This research can help policymakers understand the effectiveness of various levels of environmental legislation to make more informed decisions.