How Vestas is Navigating Supply Chain Uncertainty
Vestas is reinforcing its supply chain strategy to tackle geopolitical uncertainty, cost pressures and sustainability goals.
In its newly released 2024 company report, the sustainable energy giant emphasised the year’s strong order intake and its evolving approach to production.
Vestas' supply chain operates across both product and project sides. The product side prioritises repeatability, while the project side requires flexibility to adapt to large-scale installations.
To balance these demands, the company is shifting from a push-based manufacturing model — where production drives supply chains — to a pull-based system that optimises resource use and lead times.
However, external challenges remain. Trade restrictions, regulatory shifts and competition in the clean-tech sector all contribute to supply chain complexity.
By maintaining regionalised manufacturing and diversified sourcing strategies, Vestas seeks to minimise disruptions and enhance resilience in an evolving global landscape.
The company is also working closely with key partners to improve efficiency and reduce emissions, according to the report.
Collaboration with partners including Maersk, ZF and ArcelorMittal plays a crucial role in improving transparency and integration across the supply chain.
By aligning with suppliers, Vestas aims to reduce costs and inventory while ensuring a steady flow of components. This approach not only benefits the company but also strengthens supplier relationships, fostering a more stable and predictable market.
Henrik Andersen, Group President & CEO, reflects on the company's progress: "The year didn’t evolve as expected, but with a record-high value of the order intake, an all-time high order backlog and an extraordinary turnaround in Power Solutions, Vestas leaves 2024 stronger than we entered it."
Reducing emissions across operations
Vestas is taking a comprehensive approach to sustainability, aiming to reduce the carbon footprint of both its own operations and its supply chain.
The company remains committed to achieving carbon neutrality by 2030 without relying on offsets. A key target is to cut greenhouse gas (GHG) intensity in its supply chain by 45% by 2030, compared to a 2019 baseline.
To achieve this, Vestas is transitioning its service vehicle fleet to electric and hydrogen-powered models, shifting to 100% renewable electricity and integrating low-emission materials into its production processes.
Nearly 80% of the company’s operational emissions come from its service business, making vehicle and vessel upgrades a priority.
The company is also rethinking material use, particularly for steel, which accounts for around half of its Scope 3 emissions.
A partnership with ArcelorMittal has introduced low-emission steel towers made from scrap steel processed using wind-powered electric arc furnaces. This process reduces GHG emissions by up to 66% compared to traditional steelmaking.
Lisa Ekstrand, Vice President and Head of Sustainability, highlights the company’s sustainability efforts: "We are on track to both reduce the CO₂ emission intensity of our value chain and increase the recycling rate of our waste relative to production levels, leading to improved material efficiency."
Despite these advancements, Vestas acknowledges that it will not meet its 2025 target of reducing Scope 1 and 2 emissions by 55%. This is due to the company’s re-entry into offshore wind, which has expanded its operational scope.
In response, Vestas will revalidate its climate targets in 2025 to align with its updated business strategy.
Strategic priorities in a changing market
As offshore wind expands, Vestas is positioning itself as a leader in the sector.
The company expects offshore wind installations (excluding China) to reach 25 GW annually by 2030, with key markets in the UK, Germany, Poland and the Netherlands. Large-scale projects, such as He Dreiht in Germany and Baltic Power in Poland, are set to be delivered in 2025 and 2026 using the V236-150 MW turbine.
However, the offshore wind industry faces challenges in maintaining financial sustainability.
Vestas is working to address these by focusing on supply chain efficiency, cost control and performance across design, installation and operations. The company is scaling up its supply chain in line with commercial traction, ensuring maximum utilisation and operational stability.
Geopolitical tensions also pose risks to supply chain stability. Conflicts, trade policies and industrial protection measures in key markets such as the EU, USA and China have led to regulatory changes and increased costs for manufacturers.
Additional tariffs on critical components or restrictions on employee mobility could further complicate global operations.
Vestas is mitigating these risks through proactive advocacy, disciplined procurement strategies and financial hedging. It has also launched an end-to-end planning function to oversee large projects and an offshore readiness programme to support the rollout of its latest turbine technology.
At the same time, cyber threats remain a concern. As a provider of critical energy infrastructure, Vestas is a target for cybercriminals and geopolitical actors looking to disrupt operations. The company is strengthening its cybersecurity efforts to protect both its own systems and the customers it serves.
Despite these challenges, Vestas remains focused on its long-term mission — accelerating the energy transition while maintaining a financially sustainable business model.
As the company continues to scale up, its ability to navigate supply chain disruptions, regulatory shifts and sustainability demands will be key to its future success.
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