EU approves €902mn in German state aid for battery maker Northvolt

The European Union (EU) has approved €902 million in state aid for Northvolt, a Swedish battery manufacturer. This is the first use of a new rule that allows governments to match subsidy offers from outside the bloc.

Northvolt was founded in 2016 and is one of the leading developers of lithium-ion batteries for electric vehicles (EVs) and energy storage systems. The company has received significant investment from both private and public sources, including €902 million in state aid from the German government.

The EU's new rule, known as the "state aid for strategic projects," allows member states to provide financial assistance to companies that are considered strategically important to the bloc. This rule was introduced in 2018 and is designed to help support the development of key industries such as renewable energy, advanced manufacturing, and digital technologies.

In order to receive state aid under this rule, companies must demonstrate that their projects are of significant public interest and will contribute to the EU's overall economic and social goals. Northvolt has argued that its battery technology is critical to the bloc's transition to a low-carbon economy and will help reduce dependence on fossil fuels.

The €902 million in state aid from Germany will be used by Northvolt to expand its production capacity and develop new battery technologies. The company has already announced plans to build a gigafactory in Sweden, which will produce batteries for electric buses and trucks.

Overall, the EU's approval of state aid for Northvolt represents a significant investment in the development of the battery industry and the bloc's transition to a low-carbon economy.