One of Schleswig-Holstein’s largest industrial projects in decades is getting closer. The Swedish company Northvolt’s plans to build a battery factory for electric cars near Heide have now overcome an important hurdle. On Monday in Brussels, the EU Commission approved funding and guarantees from the federal and state governments amounting to 902 million euros. “I am very, very happy that this is happening today,” said Federal Economics Minister Robert Habeck (Greens) when the decision was announced in Brussels.
Northvolt wants to produce battery cells for electric cars in the factory from 2026. The 4.5 billion euro investment is expected to create 3,000 jobs. The company has already invested around 100 million euros of its own funds in the project in Heide, according to people close to the project. At the same time, a plant for recycling old batteries from discarded electric cars is to be built.
Building a European cell technology
The significance of the planned work extends far beyond the north. The German auto industry wants to become more independent of previously dominant suppliers from Asia. For example, the South Korean electronics companies LG and Samsung as well as the Chinese company CATL, which has also been producing in a factory in Thuringia for around a year, have high market shares. There are EU-wide initiatives to build an independent European cell technology.
“The EU Commission’s positive aid decision is groundbreaking not only for Northvolt’s settlement project in Heide, but for the European battery cell industry as a whole,” said a company spokesman. “We are now waiting for the municipal decisions as part of the ongoing land use plan process.” IG Metall welcomed the approval. “We are pleased about the EU Commission’s decision to secure industry in Europe. With the funding from the federal and state governments, the course has been set for good, collectively agreed work in an industry of the future,” said the district manager of Germany’s largest union, Daniel Frederick.
Schleswig-Holstein’s Prime Minister Daniel Günther (CDU) emphasized that “the construction of the Swedish electric vehicle battery manufacturer’s factory is of enormous industrial and climate policy importance not only for Schleswig-Holstein, but for the whole of Germany.” This would strengthen Germany’s competitiveness and further pursue the path towards energy sovereignty and away from fossil fuels.
Contribution to the ambitious climate goals
The EU Commissioner responsible for competition, Margrethe Vestager, announced the approval in Brussels together with Habeck. “This €902 million measure is the first individual aid approved to prevent an investment from being relocated to a country outside Europe,” Vestager said. It enables Germany to support the construction of the plant. “This will make an important contribution to Europe’s ambitious climate goals while maintaining fair competition conditions in the internal market.”
Northvolt boss Peter Carlsson had meanwhile signaled that construction in Heide could be delayed. He cited the comparatively high electricity prices in Germany and higher subsidies in the USA as reasons. The company could therefore initially locate there. According to information from the German Press Agency, Northvolt was also considering starting two construction projects. In addition to Heide, locations in the USA and Canada are available. Northvolt had always emphasized the locational advantages of the west coast. A lot of wind power is generated there on land and at sea.
The federal and state governments are funding the project with around 700 million euros. There are also guarantees for a further 202 million euros. Of the funding, around 564 million euros go to the federal government and up to 137 million euros to the state.
