Northvolt battery plant: Federal government releases half a billion euros – despite budget dispute

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Construction site near Heide: Fears for the millions

Photo: Frank Molter / dpa

Construction work on Northvolt's battery factory in Heide, Schleswig-Holstein, can continue – the traffic light coalition has released a good half a billion euros for the project. A corresponding funding decision has now been sent to the company, the Federal Ministry of Economics announced.

"Securing the subsidy for Northvolt is an important step towards triggering a major private investment that will create value and jobs in an industry of the future," said Federal Minister for Economic Affairs Robert Habeck (Greens). "And it's good that we were able to get the exemption from the budget freeze."

The Swedish group Northvolt wants to produce battery cells for electric cars in a factory in Heide from 2026. The €4.5 billion investment is expected to create 3000,100 jobs, plus three to four times as many at suppliers and service providers. The company has so far invested around <> million euros of its own funds in the construction project in Heide, according to people close to the project.

According to the ministry, a total of around 700 million euros is being provided for the project in the district of Dithmarschen. Of this, about 564 million euros are allocated to the federal government and around 136 million euros to the state. The funding is spread over several annual tranches.

Notification provides relief

At Northvolt and in the district, nervousness had recently grown significantly: Until now, the funding had been supposed to come from the Climate and Transformation Fund. However, after the budget ruling of the Federal Constitutional Court, there was a gap of 60 billion euros in the fund. Therefore, it was unclear whether and how the money could actually be provided. (Read here what the Northvolt construction site looks like – and which companies are still worried about promised subsidies.)

According to the information, the Federal Ministry of Economics had applied to the Federal Ministry of Finance for a release of the funds despite the current budget freeze, because a decision on the final location had to be made urgently.

Accordingly, the handover of the funding decision at Northvolt provides relief: "The decision immediately creates planning security and enables Northvolt to continue the construction measures that have already begun on site," a spokesman told SPIEGEL. "The completion of the EU Commission's state aid review and the resolutions on the statutes of the local municipalities are now the next necessary steps in the near future."

The spokesperson is referring to two steps that the company is still missing for the implementation of the project: On the one hand, the funding decision is still subject to the approval of the European Commission under state aid law. "To this end, we are in constructive exchange with the Commission," the ministry said.

On the other hand, two local municipalities still have to pass resolutions on their statutes. However, this will probably only be possible once the EU Commission has given its approval to the aid.

kko/apr/dpa