Germany finances Northvolt with 700 million for a battery factory
Germany will pay 700 million euros to Northvolt to secure the construction of a battery plant after officials won an exemption from the government's spending freeze.
The commitment for the Northvolt AB factory is the first granted for a project planned under a special fund for the climate transition since a ruling by the German Constitutional Court blocked the government-defined special fund for the climate transition, putting numerous projects are in danger.
According to officials who spoke on condition of anonymity, the move was urgent because otherwise the deal would fall through and the factory would be built elsewhere.
Around 564 million euros of the grant will be provided by the federal government, while the rest will be paid in stages by the state of Schleswig Holstein, which will host the plant, the Ministry of Economy said on Sunday.
The episode illustrates the struggle the government is facing in trying to advance its political agenda while public finances remain in precarious balance, especially because, in reality, the German state does not want to spend.
The budget freeze was imposed in mid-November by Finance Minister Christian Lindner after the German Supreme Court ruled the transfer of 60 billion euros of old Covid-19 aid to climate protection projects unconstitutional.
All new payment obligations have been suspended, but exceptions can be approved on an individual basis. Negotiations are currently underway between coalition partners on how to resolve the impasse, and officials now want to work to advance other previously initiated projects as well.
Robert Habeck, Minister of Economy, said: “Securing funding for Northvolt is an important step in kick-starting major private investment that will create added value and jobs in an industry of the future.” “It is good that we managed to obtain exemption from the budget freeze. But it's only a first step."
Stockholm-based Northvolt plans to produce battery cells for electric vehicles at the Heide plant starting in 2026. The necessary investment amounts to around 4.5 billion euros and around 3,000 jobs are expected to be created.
Some doubts remain as to whether these batteries will be truly useful, given that there is now an abundance of battery factories around the world, and even in Europe, and that batteries are an extremely standardized product, so it makes little sense to produce them where the costs are high, but only the future will confirm the correctness of these investments.
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The article Germany finances Northvolt with 700 million for a battery factory comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-germania-finanzia-con-700-milioni-northvolt-per-una-fabbrica-di-batterie/ on Thu, 21 Dec 2023 09:00:14 +0000.