Abstract The primary problem in achieving carbon emission reduction and carbon peak is to identify the key driving factors and emission reduction potential of the industrial sector, especially in resource-cursed regions like Xinjiang. This study aimed to explore the key driving factors and abatement potential of carbon emissions based on the "energy-environment-economy" hybrid input-output model of Xinjiang during 1997-2017. The result showed that: (1)Industrial carbon emissions have experienced three stages: slow growth-rapid growth-stable growth. (2)Demand change effect and energy intensity effect were the determinants of industrial carbon emission change; Capital formation and domestic trade were the biggest drivers of carbon emissions growth, and the driving force of imports in international trade increased gradually over time. (3) The coal-based energy structure was both the biggest obstacle and the best entry point in carbon emission reduction. (4) Of the 28 key industry sectors, heavy industry including the production and supply of electricity and heat (S22), petroleum processing, coking and nuclear fuel processing (S11), chemical industry (S12), metal smelting and rolling (S14), and energy industries had the greatest potential for carbon reduction. The research findings provide scientific decision-making reference for Xinjiang to accurately grasp the carbon emission reduction potential of the industry and formulate a targeted carbon peak action plan.