This paper investigates how environmental regulation policy affects firms' marginal emissions of energy and the role of environmental policy in shaping the dispersion of it. Using firm-level data from 2001 to 2007, we find that environmental regulation policy leads to a drop in the marginal emission of energy and an increase in the dispersion of it. It implies higher environmental efficiency with greater dispersion after the policy implementation. Further analysis shows that the heterogeneity effect of environmental policy on firms is the reason for the cross-industry (and cross-province) variation in the dispersion of the marginal emission per energy use.