The FSR in Action: The Commission Investigates Foreign Subsidies in the Renewable Energy Supply Chain

Back in April 2024, the Commission launched a preliminary review into Chinese suppliers of wind turbines under the Foreign Subsidies Regulation (“FSR”). On 3 February 2026, the European Commission (“Commission”) decided to open an in-depth investigation following this preliminary phase into wind turbine manufacturer Goldwind Science & Technology Co., Ltd (“Goldwind”). The Commission may initiate an in-depth investigation under the FSR if there are sufficient indications that an undertaking was granted foreign subsidies that distort the internal market (Article 10(3) FSR). The investigation concerns Goldwind’s activities relating to the production and sale of wind turbines and related services in the EU, based on the Commission’s preliminary concerns that Goldwind may have been granted foreign subsidies capable of distorting the EU internal market.

For a broader overview of the FSR framework and enforcement toolbox, see this month’s Competitive Edge’s main article and our earlier publication here.

The Commission’s concerns 

In its decision, the Commission indicates that there are ‘sufficient indications’ that Goldwind has received the foreign subsidies listed below. A ‘foreign subsidy’ exists when a direct or indirect financial contribution from a third country provides a selective advantage to a company that carries out an economic activity in the internal market.

1. Grants (including insurance premium subsidies and R&D grants) from public authorities in China;
2. Preferential tax measures (reduction of corporate income tax and VAT refunds); and
3. Preferential financing (loans granted by banks likely attributable to China).

The Commission’s concern, in short, is that such measures may have unduly improved Goldwind’s competitive position in the internal market (specifically in wind project tenders) and negatively affect competition for the supply of wind turbines and related services in the EU. The Commission notes that the above listed foreign subsidies seem to support Goldwind’s competitive position and that cross-subsidisation is likely. 

As usual at this stage, the press release does not set out a detailed effects theory or evidentiary record, but the decision to open the in-depth investigation signals that the Commission considers there are sufficient indications to warrant an in-depth assessment under the FSR framework.

Not a notification case: an ex officio build-up since 2024

As this is an ex officio investigation, the Commission started information gathering in April 2024, sending requests for information to several companies active in the EU wind sector (including Goldwind).

This procedural step is noteworthy as it demonstrates the Commission’s preparedness to use the FSR beyond the mandatory notification tracks (i.e. concentrations and public procurement procedures meeting the relevant thresholds).

Further context: focus on the energy sector 

The Commission’s decision is part of a broader policy context: heightened attention to foreign subsidisation in clean-tech value chains and the risk that subsidy-driven advantages can compound over time in capital-intensive manufacturing markets.

In that context, the OECD’s January 2026 report on the solar panel industry is a useful reference point. Using the OECD MAGIC database, the OECD finds that (among 15 industrial sectors covered) solar cell and module production was the most subsidised on average between 2005 and 2024, with subsidies representing around 3.2% of firms’ revenue, compared to an overall database average of 0.9%.

The OECD also describes how sustained support can be associated with continued investment in production capacity regardless of market conditions and, over time, with greater concentration of manufacturing activity within parts of the value chain, dynamics that can affect both trade and competition.

The OECD analysis helps explain why policymakers may be attentive to subsidy dynamics in sectors where scale, financing conditions and capacity decisions can shape market structure quickly.

In addition, it must be observed that the EU has taken other measures to amplify EU competitiveness in the (renewable) energy sector. Under the Net Zero Industry Act (“NZIA”), access to public tenders in the energy sector can be restricted for companies of third (non-EU) countries. In short, if the Commission finds that a particular net-zero technology from a third country makes up more than 50% of the total supply of that technology in the EU, public procurement contracts must include a condition limiting supply from that country. Specifically, no more than 50% of the contract value for that technology may come from the identified third country.

Short outlook: implications for businesses

Companies suspecting foreign subsidies can provide market signals to the Commission. This is not limited to M&A deals or public procurement procedures meeting the FSR notification thresholds, as the Commission can (and has shown to be inclined to) initiate ex-officio investigations. The Commission seems to have a specific focus on the energy sector as resilience and EU competitiveness are high on the agenda. 

At the end of the in-depth investigation into Goldwind, the Commission shall (in principle within 18 months) issue a non-objection decision, a decision with commitments or a decision to impose redressive measures (Article 11 FSR). The Commission is now calling on any party to submit their comments within one months following the date of the formal publication of the decision to initiate an in-depth investigation (reference FS.100143).

For more information or further guidance in this area, please contact Tialda Beetstra and Sander Wagemakers. Special thanks to Juliette Tiel Groenestege for her contribution to this article.

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