Permanent magnets – first steps towards more supply chain resilience

5 August 2025

Germany has published a first-of-its-kind ‘Resilience Roadmap for Permanent Magnets’. The Roadmap entails aspirational targets, practical steps and financial incentives that can drive more supply chain resilience for permanent magnets, a key component in wind turbines. The Roadmap’s success hinges upon the ramp-up of supply and demand for resilient permanent magnets in Europe.

Europe wants to become more independent and resilient in strategic clean technologies and their sub-components. The European Union (EU) has adopted the Net-Zero Industry Act (NZIA) to boost European clean tech manufacturing. For wind energy, NZIA sets an annual manufacturing capacity target of 36 GW. In parallel, the EU Critical Raw Materials Act (CRMA) aims to ensure access to a secure and resilient supply of critical raw materials.

As EU Governments and industry start applying these new rules, the German Federal Ministry for Economic Affairs and Energy (BMWE) has published a new initiative that draws up a path towards greater European supply chain resilience for permanent magnets. The new ‘Resilience Roadmap for Permanent Magnets’ stems from the country’s 5-point action plan for wind energy from October 2024 and was developed with wind industry stakeholders. It outlines aspirational targets to reduce import dependencies and diversify the supply of permanent magnets for wind energy. And it proposes practical steps and financial instruments to boost supply and demand for resilient permanent magnets.

Read the Resilience Roadmap for Permanent Magnets

Why focus on permanent magnets?

Permanent magnets are used in a significant share of wind turbines. Currently permanent magnets are the wind turbine component for which Europe has the strongest and most acute dependency on China – a dependency which extends across the whole value chain, including rare earth extraction and processing. More than 90% of EU permanent magnets are produced in China.

This dependency is not specific to the wind industry. It applies to the whole global permanent magnet market supply chain and impacts many other sectors, e.g. mechanical engineering, military applications. Demand for permanent magnets is set to increase rapidly.

The Resilience Roadmap for Permanent Magnets – what’s in it?

The Resilience Roadmap sets out aspirational targets for the share of permanent magnets and rare earths European wind turbine manufacturers could obtain from resilient sources by 2029, 2030 and 2035. 30% of permanent magnets could come from alternative supply countries in 2030, and that share could grow to 50% by 2035 in line with NZIA and CRMA objectives.

It further suggests timelines for European wind turbine manufacturers to (1) identify potential alternative suppliers of permanent magnets and sign official Memoranda of Understanding (MoUs) with them, (2) secure offtake agreements, and (3) develop resilient production capacities.

How to create more supply for resilient permanent magnets?

Resilient permanent magnets require a total rethink of sourcing strategies. European manufacturers will have to find new suppliers or reestablish connections with past suppliers. Countries other than China already producing permanent magnets include Japan, the US, India, and Indonesia.

Recycling decommissioned magnets and reusing the rare earths contained in them also qualifies as resilient supply. However, such a closed recycling loop would be unworkable. The expected return of permanent magnets from decommissioned turbines before 2030 is negligible. We expect that only 80 tonnes will become available from end-of-life turbines by 2030, while the industry needs thousands of tonnes for new installations. Even open-loop approaches, where recycled magnets would be sourced from other sectors, are currently not supported by a functioning secondary market.

In our response to the EU Consultation on the Critical Raw Materials Act (CRMA) we noted just this: additional recycling obligations before 2030 would be disproportionate and detached from industrial reality. They would risk distorting existing resale, refurbishment, recovery and recycling pathways. They would jeopardise the competitiveness of European manufacturers.

How to create more demand for European permanent magnets?

The German Government commits to supporting the Resilience Roadmap with EU and national funds and programmes, for example, the EU Innovation Fund, the German Raw Materials Fund, investment guarantees or national energy research programmes.

In line with the NZIA, the Resilience Roadmap also suggests Germany will consider implementing resilience criteria for permanent magnets in its national wind energy auctions. But resilient permanent magnet supply chains are not mature enough yet. Therefore, any resilience criterion should initially be classified as an award criterion.