Achieving carbon neutrality enables China to attain its industrial water-use target

China is the world’s top water consumer and CO2 emitter. The government has deployed Three Red Lines (TRLs) to improve water security by 2030 and committed to achieving carbon neutrality by 2060. China’s industries, which account for half of national CO2 emissions and >20% water withdrawals, is key to decarbonization and water conservation. However, there remains a lack of consensus regarding whether industrial emission reduction and water saving can be achieved simultaneously. Here, we adopt a general equilibrium model using a self-developed high-resolution provincial water-use inventory based on enterprise census data, to uncover the impacts achieving carbon neutrality would have on industrial water use across China. Meeting carbon neutrality enables the achievement of the TRL-associated industrial water-use target and can reduce industrial water use by 24% in 2060. Nevertheless, if inter-provincial industrial relocation occurs, water use could rise in certain provinces, reducing the above water-saving potential. Stricter and coordinated policies and technological advancements are essential to successfully address climate and water challenges concurrently.