Carbon emission efficiency of China's manufacturing industry and choice of precise carbon reduction paths——Analysis perspective based on the potential cost framework

Targeted decarbonization in manufacturing requires more than identifying efficiency losses; it also requires assessing each energy source's technical abatement potential, marginal abatement cost, and implementation priority. Using a balanced panel of 29 manufacturing subsectors in China from 2010 to 2024, this study estimates carbon emission efficiency with slacks-based measure directional distance function (SBM-DDF) models under meta-frontier and group-frontier technologies. It then uses undesirable-output slacks to quantify the abatement potential for coal, oil, and natural gas and combines these estimates with marginal abatement costs derived from parametric linear programming to construct a potential-Boston matrix. The results show that the manufacturing sector's meta-frontier efficiency increased from 0.520 to 0.641, although substantial room for improvement remains. For the medium- and high-emission groups, group-frontier efficiency was markedly higher than meta-frontier efficiency, indicating the need for both within-group catch-up and technological upgrading toward the meta-frontier. The high-emission group had the greatest abatement potential and the lowest average marginal abatement cost, whereas abating emissions associated with natural gas was generally more costly than abating those associated with coal or oil. The potential-Boston matrix classifies the 29 subsectors into four decarbonization pathways: phased advancement (13), comprehensive advancement (2), steady maintenance (12), and priority-focused mitigation (2). The proposed framework uses the meta-frontier to define long-term targets and group frontiers to set near-term catch-up benchmarks, translating efficiency, potential, and cost estimates into industry-energy priorities. Technology retrofits, fuel substitution, carbon pricing, transition finance, and regulatory measures can then be tailored to limit output losses while prioritizing high-potential, low-cost abatement opportunities.