EU rubberstamps Northvolt Germany gigafactory subsidy

New EU measures invoked to avoid losing ground to the US on battery manufacturing

EU rubberstamps Northvolt Germany gigafactory subsidy
Northvolt will build its gigafactory in Heide, Schleswig Holstein

Swedish battery firm Northvolt will go ahead with the building of a battery gigafactory in the the northern German state of Schleswig Holstein, after the European Commissions approved proposed German state subsidies intended to attract onshore cell manufacturing.

The annual production volume after factory ramp-up will be 60 GWh and will supply c.1mn EVs with high-quality battery cells made in Germany.

"The support will unlock a multi-billion euro private investment, creating 3,000 direct jobs in Heide and thousands more in the surrounding industry and service sector," the German economy ministry says.

"Global competition is driven by climate technology and it is important that Europe is a strong competitor and a strong location," says Robert Habeck, German minister for the economy and climate action.

"In this context, there is also very good news from Brussels with the aid approval for Northvolt — a battery cell manufacturer that wants to invest and produce in Germany. It is an investment in economic security, jobs and growth," Habeck continues.

According to consultancy Benchmark Mineral Intelligence, China is home to seven of the ten largest battery makers by capacity today, with Catl firmly in the top spot.

In Europe, over half of the 1.2 TWh pipeline capacity for 2030 is located in Germany, Hungary and France, which are set to be home to 19 of the region’s 36 planned or operational gigafactories, Benchmark says.

Northvolt had been weighing up taking its planned manufacturing facility to the US on the grounds that the Biden Administration's Inflation Reduction Act made more subsidy funding available to the firm than the offer from German authorities.

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But the Temporary Crisis and Transition Framework (TCTF), introduced in March by the EU, allowed the European Commission to approve the proposed subsidies to avoid losing green manufacturing projects abroad. The approval for Northvolt marks the first time that the TCTF has been used in Germany.

Northvolt has recently begun work on a 60GWh/yr gigafactory, just outside of Montreal, Quebec. The plant will also have adjacent facilities for cathode active material (CAM) production and battery recycling, enabling fully circular production. The firm also hailed a landmark achievement in sodium ion battery technology in November.

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