This article examines potential interest group opposition to green industrial policies through the lens of state investment in China’s coal power sector. Using a novel data set on financial investments in Chinese coal power plants, we show that state actors have controlling stakes in the majority of nominally private coal plants. Importantly, the majority of such plants have investments from multiple levels of government. Green industrial policies could therefore face resistance from economic coalitions within the state, as state-owned coal plants and government agencies object to policies that harm their financial interests. Theoretically, this implies the need for a conceptualization of state capacity that allows for the ability to overcome internal opposition. Empirically, we highlight a predicament for the Chinese state: it has set ambitious goals to decarbonize but also has a vested interest in ensuring the profitability of the world’s largest coal-fired power generation fleet.