Given the key role of industrial sectors in energy conservation and CO2 emission reduction in China, this paper evaluates the industrial CO2 emission efficiency, emission reduction potential and profits brought by emission reduction for the 30 provinces in China during 2005-2012. Moreover, the spatial clustering among those provinces is detected in terms of industrial CO2 emission efficiency. The results indicate that, first, the 30 provinces are not completely efficient regarding their industrial CO2 emission efficiency, and they can be categorized into three groups, i.e., the high, middle and low efficiency regions. Second, the northwest region has the hugest industrial CO2 emission reduction potential among the eight regions in China, which shows the biggest opportunity for CO2 emission reduction. Therefore, the central government should provide more policy support for this region. Finally, the industrial sectors of the 30 provinces exist significant spatial clustering in light of CO2 emission efficiency, which provides important implications for government to formulate regional industrial policies. (C) 2016 Elsevier Ltd. All rights reserved.