<p>Industrial solid waste (ISW) pollution severely hinders zero-waste city construction. As a key policy tool for controlling environmental pollution in China, energy conservation and emission reduction (ECER) fiscal policy’s effectiveness on urban ISW pollution requires evaluation. We hypothesize that ECER fiscal policy can reduce ISW pollution in demonstration cities, with this policy effect achieved through three key influence channels. To verify these hypotheses, based on panel data from 286 Chinese cities between 2005 and 2022, we assess the impact of ECER fiscal policy on ISW pollution in demonstration cities employing a series of causal inference models. Our findings show that ECER fiscal policy reduces ISW pollution in demonstration cities by 4.12%. The policy’s positive effect is more pronounced in the first batch of demonstration cities, non-old industrial base cities, cities with lower fiscal pressure or lighter ISW pollution. Moreover, ECER fiscal policy can reduce ISW pollution in demonstration cities by lowering energy consumption, optimizing industrial structure, and promoting green technology innovation. Further analysis indicates that ECER fiscal policy can reduce ISW pollution in neighboring cities, demonstrating a spatial spillover effect. Our paper offers theoretical and empirical insights for further optimizing ECER fiscal policy and promoting demonstration cities to move towards zero-waste cities.</p> Graphical Abstract <p></p>