EU awards its first state aid to gigafactory in Germany

Battery plant benefits from transatlantic green investment war after Northvolt threatened a switch to America
Northvolt is scheduled to open a gigafactory at VW’s engine plant at Salzgitter, Germany
Northvolt is scheduled to open a gigafactory at VW’s engine plant at Salzgitter, Germany
JOHN MACDOUGALL/AFP VIA GETY IMAGES

A small town in Schleswig-Holstein is to become the first recipient of big state aid from the European Union in response to the transatlantic green investment war being waged by President Biden and the United States.

In an admission that it must ditch old rules about state intervention, the European Commission has waved through €902 million of support from the Bundestag in Germany for the construction of a €4.5 billion gigafactory near Heide, a small town in the far north of the country close to the border with Denmark.

The recipient of the money, comprised of a €700 million direct grant and €202 million of loan guarantees, is Northvolt, the Swedish company that has emerged as Europe’s competitor in the global competition to manufacture batteries