The World is confronted with a slew of environmental issues, one of which is how to attenuate the detrimental impacts of CO2 emissions-induced climate change. The ever-increasing use of energy is eroding natural resources to the point that our economic future may be jeopardized. The Tunisian economic growth indicates the excellent performance in the industrial sector as the minimum required input for these developments necessitates additional energy consumption, resulting in increased CO2 emissions and environmental degradation. This study explores the role of energy efficiency, urbanization, economic growth, and natural gas energy usage in the industrial sector on carbon dioxide (CO2) emissions of Tunisia. The research mainly employs the Vector Autoregressive Model (VAR) to examine the factors driving the evolution of CO2 emissions through the industrial sector from 2000 to 2018. The findings assess that natural gas as an energy source and efficiency are crucial for reducing CO2 emissions. The study has shown the existence of the Environmental Kuznets Curve (EKC), which demonstrates that economic development in Tunisia has an inverted U-shape connection with CO2 emissions. The results indicate that energy consumption and GDP significantly affect CO2 emissions due to large-scale population movements and industrial structure transformation. In contrast, energy efficiency plays a dominant role in decreasing CO2 emissions. The article will assist economic decision-makers and related authorities in formulating an appropriate energy policy for the industrial sector based on the study's outcomes to protect environmental degradation in the long run by reducing carbon emissions.