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Brussels has launched an in-depth investigation into whether China provided unfair subsidies to Goldwind, the world’s largest turbine manufacturer, for its activities in the production and sale of wind turbines in the EU.

The foreign subsidy regulation allows Brussels to block companies subsidised by foreign governments from public procurement, mergers and acquisitions, and even selling goods and services into the single market.

Although not specifically aimed at China, the EU rule, which came into force in 2023, has been used to target many Chinese companies amid growing concern that oversupply by the China-based manufacturer is jeopardising European industry.

The investigation comes as the EU prepares to strengthen the protection of its renewables industries by stipulating that manufacturers must buy a certain number of components locally in order to qualify for public subsidies and introducing new rules on foreign direct investment this month.

The European Commission started this specific investigation in 2024 by looking into several companies in the wind sector active in the bloc, including Goldwind. The company has installed about 808 megawatts of wind power in Europe.

The regulator had found that Goldwind could have been granted foreign subsidies, including grants, preferential tax measures and preferential financing in the form of loans, the Commission said in a press release.

It added that “these foreign subsidies may improve Goldwind’s competitive position in the internal market and may negatively affect competition for the supply of wind turbines and related services in the EU”.

An in-depth investigation can ultimately lead to fines for companies, which can reach up to 10 per cent of their turnover.

The EU has previously used these rules to investigate Chinese companies bidding for public tenders in Europe ranging from electric-vehicle maker BYD and a state-owned train maker to a solar panel company and its government-owned partner.

Additional reporting by Alice Hancock