Opposition and Government Disagree on Publication of Northvolt Funding Documents
Controversy arises regarding management of Northvolt's confidential papers - Controversy Surrounding the Management of Northvolt Documents
The political debates surrounding the insolvency of battery manufacturer Northvolt in Schleswig-Holstein intensify. The opposition and the ruling CDU are at odds over the disclosure of documents related to Northvolt's planned battery factory in Heide. In a joint meeting of the Finance and Economics Committee, the opposition criticized numerous redacted sections in the released documents. Both sides concur that the report by PwC should have been made public.
Economy Minister Claus Ruhe Madsen affirmed that all parties involved in the decision-making process regarding Northvolt's convertible bond and direct funding had thoroughly scrutinized the documents and information available at the time. However, he admitted that all decisions should be viewed in light of the information available during that period.
Madsen expressed euphoria about the potential industrial advantages
"Numerous circumstances concerning Northvolt unknown to us today were unbeknownst at the time," said the minister. Before the convertible bond was issued, and associated risks assumed by the state, the government painstakingly weighed the potential benefits and risks. "The outcomes shown in the PwC report, which you are familiar with, were integral to the decision made by the federal and state governments on the convertible bond."
Another report was unlikely to shed additional light, stated Madsen. All parties had high hopes that this agreement would be a significant industrial achievement for Schleswig-Holstein. "Unfortunately, it has not unfolded as anticipated. We all had hoped for a more fruitful outcome."
Opposition insists on document disclosure
Members of the state parliament factions have been requesting access to government documents on Northvolt's funding for some time. The government has revealed parts of these documents, albeit with many blacked-out sections.
"I am no longer interested in privately deliberating the facts," said opposition politician Bernd Buchholz (FDP) in the committee. Out of 150 questions on a cabinet draft, as many as 148 were blacked out.
He pointed to findings in the documents suggesting a strong desire among working-level ministries for more information on risks. "Who made the decision?", Buchholz questioned. Because this decision in favor of Northvolt was made against the expert level's explicit recommendation. "That is the clear reality of the documents. If this persists, perhaps we should continue this inquiry committee."
According to an email from the Ministry of Economics on May 15, 2023, it is written among other things: "(...) and the tight time frame should also be specified more precisely, although this actually cannot mean, so to speak, 'smile and wave through', since we are rather 'chasing after' the information."
In another email from the same day, it reads: "In the end, it is necessary to list all risks and information gaps that are currently emerging, and then it is decision of the department heads or the HH legislature (the budget legislature - editor's note). Unless the next few days bring insights that make the risk manageable."
Government dismisses criticism
The head of the state chancellery, Dirk Schrödter (CDU), explained that the promotion was a joint decision of the state government. He specifically mentioned, in addition to himself, Finance State Secretary Oliver Rabe and Economic State Secretary Julia Carstens in relation to the decision to address the PwC report in a video conference.
Schrödter sharply criticized the opposition's behavior, stating that they had been aware of all documents for a considerable length of time. Similarly, CDU faction leader Tobias Koch argued. In response to SPD economist Kianusch Stender's criticism of the government's publication practice, Schrödter said, " frankly, I find it quite bold of you to do this."
CDU economist Lukas Kilian referred to it as "anger from a can." He stated, "I would have made the same decision at the time," and expressed confidence that many others would concur.
The cost of Northvolt to the country remains unclear. In 2020, the federal government guaranteed a financing tranche of commercial banks for the Swedish company, with over $525 million USD at an 80 percent guarantee to ensure the supply of batteries for the German automotive industry[2]. Moreover, Northvolt received approximately €600 million from the state-owned development bank KfW for the construction of the factory in Heide[2]. This includes €20 million for interest and processing costs. The federal government and the state each guarantee half of this convertible bond[2].
Further direct funding from the federal government and the state in early 2024, to the tune of around €700 million, has not yet been disbursed[2].
Meanwhile, it was announced during the committee meeting that production at Northvolt's main facility has ceased entirely. Although battery cell production in Skellefteå continued with limited staff and support from the only existing customer, Scania, production at the Northvolt Ett plant will cease by June 30[1].
- Northvolt
- Insolvency
- Schleswig-Holstein
- CDU
- Buchholz
- Financial crisis
- Pricewaterhousecoopers
[1] German Press Agency[2] Federation of German Industries[3] Government press releases
- The opposition, led by Bernd Buchholz (FDP), continues to push for the disclosure of government documents on Northvolt's funding, arguing that the current document releases have numerous blacked-out sections, with as many as 148 questions out of 150 redacted in a recent cabinet draft.
- Economy Minister Claus Ruhe Madsen expressed optimism about the potential industrial advantages of the Northvolt project before the company's insolvency, stating that decisions at the time were made based on the information available and the outcomes shown in the Pricewaterhousecoopers (PwC) report.
- The government, including the head of the state chancellery, Dirk Schrödter (CDU), and other state secretaries, argue that they have been transparent about the Northvolt funding documents, indicating that a joint decision by the state government was made regarding the promotion of the project.
- The financial crisis surrounding Northvolt has resulted in production at the Northvolt Ett plant in Schleswig-Holstein ceasing entirely, while battery cell production in Skellefteå continues with limited staff and support from the only existing customer, Scania. The total cost of Northvolt to the country remains unclear, with potential further direct funding from both the federal government and the state yet to be disbursed.
