The European Commission has initiated an investigation into subsidies provided to suppliers of Chinese wind turbines intended for Europe.

The action is part of the EU’s broader strategy to protect its domestic companies from low-cost clean technology imports.

The announcement was made as Chinese wind turbine makers are making significant headway and securing orders in Europe.

The wind power investigation will utilise new EU powers, effective from July 2023, that enable the commission to determine whether foreign subsidies enable businesses to make unduly advantageous bids in public tenders.

The commission will scrutinise the development conditions of wind parks in Spain, Greece, France, Romania and Bulgaria, as stated by EU anti-trust commissioner Margrethe Vestager.

The investigation was announced by Vestager during a lecture at Princeton University in New Jersey in the US.

Vestager announced: “We are launching a new inquiry into Chinese suppliers of wind turbines.

“We are making full use of the tools that we have. We need more than a case-by-case approach. We need a systematic approach, and we need it before it is too late.

“We can’t afford to see what happened on solar panels happening again on electric vehicles [EVs], wind or essential chips.  

“Let me be clear: the investments that we put in our supply chains, the investigations that we run, or the new tools we have developed – those are not meant to constrain China’s success.

“They are meant to restore fairness in our economic relations. Everyone is welcome to be successful. Everyone is welcome to trade with Europe, but they have to play by the rules.”

The specific Chinese companies under scrutiny have not been disclosed.

European manufacturers such as Siemens Energy and Vestas, which predominantly supply Europe’s wind turbines, are facing increased competition from Chinese companies.

This poses a potential threat to their positions in the global market for the development of cost-effective and efficient wind turbines.

WindEurope, an industry lobby group with members including Vestas, Siemens Energy and Nordex, has expressed support for the commission’s probe.

The group has observed that Chinese turbines are being offered in Europe at prices up to 50% lower than those produced within Europe.

Chinese manufacturers are also providing turbines with deferred payments, allowing wind farm operators to pay nothing until three years of revenue have been generated.

Critics of China’s trade policies draw parallels with the European solar market, which is experiencing a severe crisis that has pushed several local manufacturers to the edge of bankruptcy.

Chinese vendors benefit from a robust domestic market, with local developers ordering wind turbines with a capacity of 100GW in 2023.

This figure contrasts with the EU’s annual target of 29GW to meet its 2024 climate and energy goals, Reuters has reported.

The commission is also considering tariffs on Chinese EV imports, citing evidence of subsidy benefits.

Under OECD free trade rules, European manufacturers are prohibited from using state-backed financing to offer lower prices or deferred payments.

The China Chamber of Commerce to the EU stated: “We express profound dissatisfaction with the lack of transparency in the EU side’s intervention in the regular business and development of Chinese enterprises in the bloc.

“This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism.”