Exploring the mechanism and heterogeneous effects of digital economy on total factor energy efficiency in China

China faces dual challenges of environmental degradation and rising energy demand. Digital transformation improves energy efficiency, yet raises concerns over energy consumption rebound effects. This underscore the necessity for rigorous examination of underlying mechanisms to harness the digital economy’s environmental potential and inform sustainable development policies. Using panel data from 30 Chinese provinces (2011–2023), we quantified digital economy development via entropy weight method and total-factor energy efficiency (TFEE) through Slacks-Based Measure DEA. This study further combined fixed-effects models, mediation analysis, and regional comparative studies to elucidate causal mechanisms and spatial variations. Key findings indicate: (1) Digital economy development significantly enhances TFEE, with particularly strong effects in western China; (2) The impact manifests through both direct channels and indirect pathways (technology innovation and industrial restructuring); (3) Mediating effects exhibit distinct regional patterns, technology-driven in eastern provinces, industrial upgrading-focused in central regions, and rationalization-oriented in western areas. These insights inform a multi-tiered policy framework addressing digital governance institutions, technology incentives, and region-specific implementation strategies.