Energy efficiency and productivity change of China's iron and steel industry: Accounting for undesirable outputs

► The results indicated inefficiency in many of the plants. ► The average energy efficiency was only 61.1% over 2001-2008. ► Productivity growth was mainly due to technical shift and scale efficiency growth. ► The true TFP growth was underestimated if undesirable outputs were ignored. ► Environmental regulation has the potentially positive impact on technical change.