Conflict over managing Northvolt data documents - Controversy Surrounding Management of Northvolt Documents
Financial tensions surrounding the insolvency of Swedish battery manufacturer Northvolt have escalated in Schleswig-Holstein, igniting a political dispute over the publication of documents pertaining to a planned factory in Heide. During a joint meeting of the Finance and Economics Committee, the opposition accused the government of excessive redactions in the released documents. Both parties concur that a report by PricewaterhouseCoopers (PwC) should be made public for accountability purposes.
Economy Minister Claus Ruhe Madsen of the CDU defended the decision-making process, asserting that those involved in the approval of Northvolt's convertible bond had thoroughly and critically reviewed available documents and information at the time. However, Madsen acknowledged that all processes must be examined in the context of the information available at the time.
Madsen argued that the high spirits surrounding Northvolt were unfounded, as many aspects of the company that are now known were not known at the time. Before concluding the convertible bond and assuming the associated risks, the government carefully weighed the chances and risks. Madsen suggested that an additional report would not have provided deeper insights, and all parties were enthusiastic about the potential industrial coup for Schleswig-Holstein. He expressed regret at the less-than-ideal outcome.
For several weeks, members of the state parliament factions have sought access to government documents regarding Northvolt funding. The government has gradually published selected parts of these documents, but with significant redactions. Former economics minister and opposition politician Bernd Buchholz (FDP) questioned the withholding of crucial information on risks at the ministerial level during the committee meeting. He demanded transparency and accountability, asking who made the decision in favor of Northvolt.
Internal emails from the Ministry of Economics provide insights into the intense discussions around information availability. On May 15, 2023, it was emphasized that a more detailed specification of the tight deadline was necessary, but it could not mean a dismissive approach, particularly given the pursuit of information. Another email on the same day highlighted that only the risks and information gaps currently revealed required documentation, and the decision on the degree of documentation remained with department heads or the budget legislature.
State Chancellor Dirk Schrödter (CDU) defended the joint decision to support Northvolt, citing himself, Finance State Secretary Oliver Rabe, and Economic State Secretary Julia Carstens in relation to the decision. He criticized the opposition for its behavior, claiming they had been aware of the relevant documents for a considerable period. Upon criticizing the government's publication practices, Schrödter commented, "Frankly, I find it quite courageous what you're doing here." CDU economist Lukas Kilian deemed the opposition's behavior as "anger from a can," stating that he would have taken the same course of action.
The financial implications for the country concerning Northvolt remain uncertain. In 2020, the federal government guaranteed a financing tranche of commercial banks for the Swedish company in excess of 525 million US dollars at 80 percent to secure battery supplies for the German automotive industry. Northvolt also received approximately 600 million euros from the state development bank KfW for the construction of the factory near Heide, which includes 20 million euros for interest and procedural costs. The federal government and the state each bear half of the convertible bond's liability, with more than half already used.
The EU Commission approved direct funding from the federal government and the state totaling around 700 million euros at the beginning of 2024. However, this money has not yet been disbursed. Simultaneously, it was announced that production at Northvolt's central site had been terminated altogether. Limited production of battery cells in Skellefteå could continue with Scania's support and a reduced workforce until the end. Production at the Northvolt Ett plant will be halted by June 30.
- The economic minister, Claus Ruhe Madsen, has defended the government's decision-making process regarding Northvolt's convertible bond, asserting that all available documents were thoroughly reviewed before making the investment.
- The opposition, led by former economics minister Bernd Buchholz, has questioned the government's transparency in the publication of documents related to Northvolt's funding, demanding full disclosure of information for accountability purposes.
- Despite the current financial tension surrounding Northvolt's insolvency, the economist Lukas Kilian finds the opposition's behavior towards the government's decision to support Northvolt 'anger from a can,' stating he would have taken the same course of action.
- The financial implications of Northvolt's failure for the country are significant, with over half a billion US dollars and EURO in guaranteed funding from the federal government, the state, and the state development bank KfW still outstanding, and production at Northvolt's main factory in Heide set to halt by June 30.
