Investment in Northvolt Contested - Critics Demand Financial Review Report - Critics Demand Investigation: Northvolt Faces Request for Review by Court of Auditors
In the wake of Swedish battery maker Northvolt's bankruptcy, German political factions have called for a comprehensive audit report to shed light on the state guarantee and financial risks associated with the insolvency. The company, once a flagship European green energy project, filed for bankruptcy in March 2025, leading to significant job losses and the ceasing of production at its factory in Skellefteå, Sweden.
The demand for transparency is particularly strong in Schleswig-Holstein, where Northvolt had ambitious expansion plans with a new factory in Heide, supported by a €600 million convertible bond. The German federal and state governments agreed to cover half of this bond each, but concerns remain about the decision-making and risk assessments that led to this commitment.
Economics Minister Claus Ruhe Madsen (CDU) defended the reliance on an expert opinion by PwC, which is still confidential and held by the Federal Ministry of Economics. However, opposition parties argue that expert warnings may have been overlooked and emphasize the need to clarify what risks were actually assessed before financial commitments were made.
The insolvency of Northvolt has also raised questions about potential financial losses for public funds, with criticisms of the Ministry of Economic Affairs and Energy for acting more on "hope" than solid risk assessment.
The audit is intended to clarify the information and risk assessments that were available when state-backed financial guarantees and loans were approved, understand the financial exposure and potential losses for Schleswig-Holstein and the German federal government due to Northvolt’s insolvency, and assess whether proper governance, documentation, and oversight protocols were followed.
The opposition factions of SPD, FDP, and SSW in Schleswig-Holstein have been arguing with the government about the state government's decision to grant a guarantee of over 300 million euros to Northvolt for months. FDP MP Bernd Buchholz believes that the state audit office should examine the matter to make progress in the debate.
The state government's decision to grant the guarantee to Northvolt is being questioned, with SSW politician Sybilla Nitsch emphasizing the need for full transparency about how the guarantee came about and on what information the state government based its decision. It remains unclear what the final costs of Northvolt's insolvency will be for Germany and Schleswig-Holstein.
The factory under construction in Heide, Schleswig-Holstein, is affected by Northvolt's insolvency, with around 600 million euros provided by the state development bank KfW for the planned factory construction. Media reports accuse former federal economics minister Robert Habeck (Greens) of having distributed taxpayers' money to Northvolt too lightly and underestimated economic risks.
This audit is seen as essential for accountability regarding the use of taxpayer-backed funds and to guide future policy in state-supported green industrial projects.
The German opposition parties urge for a thorough examination of the state guarantee and financial risks linked to Northvolt's insolvency, especially considering the substantial investments in the now stalled Heide factory. The audit aims to clarify the information and risk assessments that led to the financial commitments, assess potential losses for Schleswig-Holstein and the federal government, and ensure proper governance in future state-supported 'green industry' projects, such as those within the 'energy' sector.
