EU approves $1.47b in state aid for battery maker Northvolt
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The news: The European Commission has signed off on €902 million ($1.47 billion) in state aid to fund Swedish battery maker Northvolt’s factory in Germany.
The numbers: The Commission said that the aid will take the form of a €700 million direct grant and a €202 million guarantee.
The context: The funding falls under a new form of subsidy which seeks to stop European firms being lured abroad by large handouts by the US or China. Without the subsidy, Northvolt would establish its plant in the US as the Biden Administration had offered support under the Inflation Reduction Act – the Administration’s green subsidy program.
As reported by Bloomberg, German economic minister, Robert Habeck, told reporters that “the competition” is “between Europe and China and the USA. And the system we have developed in past decades is only looking into the internal market.”
The plant is expected to commence operations in 2026, and aims to produce between 800,000 to 1 million electric vehicles per year.
What they said: “This €902 million German measure is the first individual aid being approved to prevent an investment from being diverted away from Europe, under the new possibility offered by the Temporary Crisis and Transition Framework since March 2023. It enables Germany to support the construction of Northvolt’s production plant of batteries for electric vehicles. This is an important step for the electrification of transport in Europe, while preserving the level playing field in the Single Market,” said Margrethe Vestager, executive vice-president in charge of competition policy, European Commission.
The source: European Commission Press Release
