Against the Headwinds: Securing Europe’s Wind Sector
24 July 2025
Author: Lea Romm
Intensifying competition from China, coupled with domestic regulatory barriers, component supply chain risks, and infrastructure bottlenecks, are challenging European wind manufacturers’ longstanding leadership. Against the Headwinds: Securing Europe’s Wind Sectoroutlines a pathway to enhance European leadership in wind power.
Wind energy stands as a pillar of European strategic autonomy. It provides 40 percent of the European Union’s (EU) renewable electricity, 17 percent of total electricity, and supports 300,000 jobs across the Union. Wind energy’s strategic value extends beyond meeting immediate power demands and climate objectives to encompass long-term energy security, industrial competitiveness, and defence capabilities, essential for Europe’s geopolitical resilience.
However, Europe’s wind sector faces mounting challenges that threaten its current global leadership. At home, permitting can take up to twice as long as in the United States (US) and three times longer than in China, while supply chains leave Europe excessively dependent on China for rare earth elements (REEs) and permanent magnets essential for wind turbines. Grid infrastructure bottlenecks sideline over 500 GW of potential wind power capacity awaiting connections. Intensifying Chinese competition challenges European manufacturers both domestically and internationally. As of 2024, Chinese f irms hold the top four global manufacturing rankings for the first time, marking a dramatic shift in market dynamics.
The window for maintaining Europe’s leadership in this strategic sector is narrowing. Chinese manufacturers benefit from coordinated industrial policy providing cost advantages through subsidies, streamlined permitting, and fully domestic and integrated supply chains. Meanwhile, despite technological superiority in quality and innovation, European companies face elevated energy costs, fragmented markets, and regulatory barriers that undermine competitiveness by creating uncertainty, limiting economies of scale and standardisation.
Addressing these interconnected challenges requires urgent, coordinated European action across five strategic domains: regulatory harmonisation to reduce permitting delays, accelerated infrastructure development to unlock grid capacity, comprehensive materials strategy to diversify supply chains, enhanced defenceenergy sector cooperation and robust security frameworks to optimise dual-use potential, and sustained R&D investment to maintain technological leadership.
The stakes extend beyond industrial competitiveness to fundamental questions of European strategic autonomy. Success in implementing coordinated policies will determine whether wind energy strengthens Europe’s position as a global technology leader or becomes another sector where Europe surrenders leadership to international competitors.
Key takeaways
Risks
Regulatory fragmentation: European permitting processes require seven to ten years on average compared to five years in the US and two to three in China, with five times more projects stuck in permitting than under construction. Inconsistent implementation of the Renewable Energy Directive (“RED III”)1 across the EU creates additional barriers and delays decision-making, while fragmented procurement auction processes prevent manufacturers from achieving economies of scale.
Supply chain vulnerability: Europe faces strategic risks from trade uncertainty, including through the imposition of tariffs and other barriers, unfair competition, and dependencies such as its 98 percent reliance on China for REE essential for wind turbine permanent magnets. Wind sector demand for these materials is projected to increase sevenfold (700 percent) by 2030, cementing the Chinese Government’s pricing power advantage and potential for supply manipulation in this critical sector.
Infrastructure bottlenecks: Over 500 GW of potential wind capacity across Europe, at various project stages, is awaiting grid connection. Wind energy also depends on the parallel expansion of energy storage and flexibility solutions to reach its full potential. From 2020 to 2022, 30 TWh of renewable electricity were curtailed due to insufficient grid capacity, wasting valuable energy resources, while creating congestion management costs of EUR4.2 billion annually.
Opportunities
Energy independence and affordability: Even when considering additional flexibility investments, wind energy can deliver electricity at costs two to four times lower than gas or coal alternatives, with fixed operational costs that can protect against volatility in fossil fuel markets. The rapid additions of wind and solar between 2021 and 2023, displacing 230 TWh of fossil fuel generation, brought down wholesale electricity prices by eight percent on average, generating around EUR100 billion in consumer savings and reducing fossil fuel imports.
Industrial competitiveness revival: Europe’s manufacturing capabilities across the wind value chain – from nacelles to towers to blades – position it to capitalise on growing global demand and enable industrial scale-up. The wind sector presents a significant opportunity to revitalise European manufacturing and generate high-value employment in regions undergoing industrial transitions.
Technological leadership: Europe spearheads next-generation wind turbine design with material-efficient towers and recyclable blade technology. European recycling innovations can reduce import dependencies and create new industrial capabilities serving automotive, telecommunications, and defence sectors.
Key Policy Recommendations
Regulatory and market harmonisation:
Accelerate permitting across Europe with standardised procedures and one-stop-shop coordination. Deepen coordination and implement best practices in permitting and auction design from across the EU, the UK and Norway. Ensure effective implementation of RED III permitting provisions by EU member states.
Adopt strategic procurement policies with centralised tendering for large volumes. Implement “Made in Europe” criteria in public procurement, to support European wind manufacturers while avoiding market fragmentation. These criteria should balance support for the domestic industry with cost-efficiency and evolve in line with the maturity of the European manufacturing base. Use trade defence tools, including the Foreign Subsidy Regulation, to ensure fair competition and a level playing field.
Establish coordinated financial support mechanisms in line with strategic industrial policy objectives. Use state aid flexibility, tax incentives and counter-guarantees provided by the European Investment Bank (EIB), to provide long-term revenue stabilisation for the manufacturing industry while reducing investment risks and capital costs for developers.
Infrastructure and grid acceleration:
Deploy interconnectors, grid-enhancing technologies and streamline cross-border transmission permitting. Accelerate transmission investments to unlock 500+ GW of potential wind capacity across Europe.
Strategic materials independence:
Scale up long-term support for strategic mining and processing projects, particularly in the REE segment, and strengthen partnerships, including with the US, Canada, Australia, Japan, South Korea, India, Brazil, Malaysia, and Vietnam.
Cooperate with NATO to assess supply chain overlaps and coordinate procurement and stockpiling programmes, focusing on dual-use, smaller volume critical raw materials (CRMs), usable for wind magnets.
Establish systematic recycling, developing an integrated cross-sectoral approach e.g. through cooperation between the energy, automotive, defence and electronics sectors. Remove barriers within the EU, the UK, and Norway that prevent the scale-up of recycling operations, and create systemic collection frameworks for end-of-life products such as decommissioned wind turbines.
Innovation and competitiveness: Balance R&D in breakthrough technologies with standardisation potential. Focus investment on materials science and innovative recycling processes to reduce the dependency on permanent magnet imports.
Defence-energy integration:
Further enhance coordination between the EU, NATO, national security authorities, energy planners, and industry. Establish structured public-private partnerships for incident prevention, response and recovery and implement cable protection systems with standardised repair frameworks.
Strengthen cyber and physical security frameworks through multi-vendor strategies and equipment screenings.
Foster integrated spatial planning approaches optimising offshore wind deployment while enhancing maritime security capabilities, especially in the Baltic Sea.
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