The threat of global climate change has encouraged the international community to pay close attention to the levels of greenhouse gases, such as carbon dioxide, in the atmosphere. China has the world’s largest metal smelting industry, which is a major energy-consuming and carbon-emitting industry. Thus, this industry’s low-carbon transition is of great significance. Carbon emission efficiency (CEE) is a key indicator for the metal smelting industry to prioritize sustainable development. This paper applies a three-stage data envelopment analysis model with undesirable outputs to estimate CEE for 30 provinces from 2005 to 2020 in China, and analyzes the influencing factors using a spatial Durbin model. The results show that the CEE level generally improved in all Chinese provinces during the sample period, but the average CEE in the eastern region was 1.05 compared to 1.07 in the western and central regions, with the latter two regions progressing faster in terms of low carbon production capacity. The national average Malmquist–Luenberger (ML) index demonstrates a significant increase in technical efficiency across regions in 2010 and 2017, peaking in 2017. The study also suggests that current green credit and environmental regulations are not effective in promoting CEE improvements in the metal smelting industry, and that existing policies should be modified. Moreover, the spatial regression results indicate that the cross-regional transfer of low-carbon production technologies in China is largely complete. This study provides a more objective evaluation of the CEE levels of metal smelting across China, providing the government with a new perspective to guide the green transformation of energy-intensive industries.