The EU’s net zero crusade has been dealt a major blow as Swedish battery manufacturer Northvolt filed for bankruptcy protection in America just ten months after receiving a €1billion loan from the European Investment Bank.
Northvolt was widely seen as Europe’s answer to Asian dominance of the battery market, attracting eye watering loans from the green-obsessed EU.
In January, the EU commission said: “The European Investment Bank (EIB) will finance Northvolt’s gigafactory in Northern Sweden, with a total lending package to slightly over $1.038 billion (€942.6 million).
“The deal is the largest green loan raised in Europe to date and will facilitate the creation of a fully integrated circular battery production facility that has not previously existed outside Asia.”
But, as GB News and Facts4EU can reveal, the company now has debts of $5.8million thanks to a slowdown in electric car sales, overambitious plans to build three factories at once and the loss of major customers like BMW.
The company, which employs about 6,600 staff across seven countries, said: “Northvolt’s liquidity picture has become dire,” in a bankruptcy court in Houston, Texas.
The bankruptcy means Brexit has saved the British taxpayer millions in EU payments which would have been invested in Northvolt.
In a statement that will leave rejoiners red faced, the EU Commission Executive Vice-President Maroš Šefčovič said in January: “We mean business when it comes to Europe’s battery industry.
Northvolt’s factory in northern Sweden
Getty
“It is of strategic importance and a key battleground for global competitiveness.
“Northvolt, our battery pioneer, showcases that the EU has what it takes to build an innovative, sustainable and globally competitive battery ecosystem.
“I am proud of Northvolt’s success story as well as of other 160 industrial projects taking shape across the entire value chain, while promoted under the European Battery Alliance.”
The EU’s net zero obsession may have just cost EU taxpayers millions, but experts are wondering if the UK’s Secretary of State for Energy Security and Net Zero Ed Milliband will heed Northvolt’s demise.
The former Leader of the Opposition is pushing ahead with Labour’s plans to decarbonise Britain’s electricity grid by 2030 through schemes like GB Energy.
Meanwhile, Sir Keir Starmer told the Cop29 climate summit in Baku last week that his aim is to cut emissions by 81 per cent by 2035.
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Before the election, Labour blasted the Conservative’s watering down of measures designed to phase out petrol and diesel cars by 2030.
Starmer’s party pledged to ban the sale of these cars by 2030 while accelerating the roll out of electric vehicles.
Little has been announced since, but leaks have emerged that the government is considering allowing hybrid cars to be sold until 2035.
Northvolt’s Swedish CEO Peter Carlsson, who has led Northvolt since 2016, will step aside with immediate effect while the company restructures.
Carlsson believes Northvolt needs to raise between $1billion (£800million) and $1.2billion in order to restore the business.
Northvolt expects to complete restructuring by the first quarter of 2025.
Meanwhile, industry leaders like China’s CATL, Japan’s Panasonic and South Korea’s LG continue to control 85 per cent of the battery market, according to International Energy Agency data.