<p>Improving green total factor energy efficiency (GTFEE) is an inevitable requirement for addressing climate change and also an inevitable requirement for the coordinated development of the socio-economic and environmental systems. The potential of the Low-Carbon City (LCC) pilot project to increase GTFEE has drawn widespread attention. In this study, the SBM-GML model was adopted to estimate the urban GTFEE, and the PSM-DID model was used to explore the causal effect and mechanism of the LCC trial on the GTFEE. The results show that the distribution of GTFEE among cities has the characteristic of geographical and spatial imbalance. The empirical results show that the LCC trial significantly increased the GTFEE, among which industrial upgrading, energy consumption optimization and green innovation vitality are the key mediating approaches. This influence is particularly evident in the southeast half of the “Hu Huanyong Line”, non-resource-based cities, second-tier cities and areas accessible by high-speed rail, while the regional influence is limited in the northwest half and the middle ridge belt of the “Hu Huanyong Line”, resource-based cities, other grade levels and areas accessible by high-speed rail. These conclusions remain robust in a variety of matching strategies and model specifications. Importantly, the dual role of low-cost city pilots in promoting environmental regulation and economic growth highlights their potential in facilitating sustainable urban development. This study provides a replicable analytical framework for developing countries to evaluate the impacts of low-carbon city initiatives on energy efficiency. It offers practical guidance for formulating tailored carbon neutrality strategies based on regional characteristics and development needs.</p>