Water shortage in China is caused by the uneven distribution of water resources, a situation that can worsen given overexploitation and pollution. Chemical oxygen demand (COD) emission is considered the most important water pollutant. Using the logarithmic mean Divisia index (LMDI) method, we analyse the main driving factors of the 2001–2011 changes in China's industrial water consumption-related COD emission. The main driving factors of COD emission are classified into five effects, namely, end-of-pipe treatment, COD emission intensity, water intensity, structural effect, and scale effect. In contrast to previous studies, the current work considers water consumption by using water intensity as an index. Results show that end-of-pipe treatment, with an effect of up to 35%, was the primary factor that influenced emission reduction during the studied period. Pollution reduction policies are key drivers of promoting advancements in technologies for reducing COD emission in industrial sectors, and technical efficiency in 2001–2011.