This study investigates the effectiveness of green industrial policies in promoting green innovation in China's polluting industries from 2011 to 2022. Using data from 30 provinces and employing Difference-in-Differences (DID) and Propensity Score Matching DID (PSM-DID) models, the research finds a significant positive correlation between green industrial policies and green innovation, particularly in regions with higher pollution levels. The findings suggest that well-structured green industrial policies can effectively stimulate sustainable technological innovations in polluting industries. Policy implications emphasize the need for targeted, region-specific approaches to maximize the potential of green industrial policies in promoting environmental sustainability and economic growth. The study highlights the role of state-owned enterprises (SOEs) and eastern regions in benefiting more from green industrial policies. SOEs are more likely to adopt green policies due to their political influence and access to financial support. Eastern regions, with better economic development and access to resources, also benefit more from green policies. The research also identifies the importance of operational efficiency and sustainable investment in driving green innovation across all firm types. The study contributes to the literature by providing empirical evidence on the conditional effectiveness of green industrial policies in stimulating green innovation among heavily polluting enterprises. It offers insights into the complex dynamics between policy support, firm characteristics, and environmental sustainability. The findings suggest that targeted, region-specific, and ownership-sensitive policies may be necessary to optimize the green innovation outcomes of industrial policy interventions. The study recommends strengthening environmental regulations, implementing region-specific policies, providing additional support to SOEs, increasing investment in green technologies, promoting collaboration, introducing carbon pricing mechanisms, and raising public awareness about green innovation and environmental sustainability.This study investigates the effectiveness of green industrial policies in promoting green innovation in China's polluting industries from 2011 to 2022. Using data from 30 provinces and employing Difference-in-Differences (DID) and Propensity Score Matching DID (PSM-DID) models, the research finds a significant positive correlation between green industrial policies and green innovation, particularly in regions with higher pollution levels. The findings suggest that well-structured green industrial policies can effectively stimulate sustainable technological innovations in polluting industries. Policy implications emphasize the need for targeted, region-specific approaches to maximize the potential of green industrial policies in promoting environmental sustainability and economic growth. The study highlights the role of state-owned enterprises (SOEs) and eastern regions in benefiting more from green industrial policies. SOEs are more likely to adopt green policies due to their political influence and access to financial support. Eastern regions, with better economic development and access to resources, also benefit more from green policies. The research also identifies the importance of operational efficiency and sustainable investment in driving green innovation across all firm types. The study contributes to the literature by providing empirical evidence on the conditional effectiveness of green industrial policies in stimulating green innovation among heavily polluting enterprises. It offers insights into the complex dynamics between policy support, firm characteristics, and environmental sustainability. The findings suggest that targeted, region-specific, and ownership-sensitive policies may be necessary to optimize the green innovation outcomes of industrial policy interventions. The study recommends strengthening environmental regulations, implementing region-specific policies, providing additional support to SOEs, increasing investment in green technologies, promoting collaboration, introducing carbon pricing mechanisms, and raising public awareness about green innovation and environmental sustainability.