By Marc Menendez-Roche •
Updated: 27 Nov 2024 • 19:37 • 2 minutes read
Northvolt AB declared bankruptcy last week, leaving EU taxpayers potentially holding the bag for a staggering €293 million.
Northvolt bankruptcy- Who foots the bill?
Europe s green revolution has hit a massive roadblock after Swedish battery maker Northvolt AB declared bankruptcy last week, leaving EU taxpayers potentially holding the bag for a staggering €293 million.
Once hailed as the shining star of Europe’s electric vehicle ambitions, Northvolt’s sudden collapse has sent shockwaves through the bloc’s plans to dominate the EV battery market. And it’s not just the EU’s green ambitions that have been left in tatters the financial fallout is threatening to zap the bloc’s budget.
EU s battery bet short-circuits.
Northvolt, seen as Europe’s best hope to rival China in the electric battery race, filed for bankruptcy under the US Chapter 11 process with just $30 million (€28.81m) left in the kitty. With total debts of a whopping $5.84 billion, creditors are now circling the fallen star.
And who’s among the biggest losers? None other than the EU itself. The European Investment Bank (EIB), which had backed Northvolt through the European Fund for Strategic Investments (EFSI), is now staring down the barrel of a $313 million (€293m) unpaid loan.
Taxpayers in the firing line
Veerle Nuyts the European Commission spokesperson confirmed on Monday, November 25, that the EU had guaranteed several loans to Northvolt under EFSI, a flagship policy of former Commission president Jean-Claude Juncker. Designed to pump €21 billion into innovation and infrastructure, the fund was meant to turbocharge Europe’s green transition definitely not leave taxpayers footing the bill.
Now, any shortfall in the EIB’s loan repayments could fall directly on the EU budget, with member states’ finance ministries bracing for the disaster.
From promise to peril
Back in 2017, the European Battery Alliance was launched with much fanfare to establish Europe as a global leader in battery production. By 2023, a manufacturing capacity of 167 gigawatt-hours had been installed across the bloc.
EU spokesperson Johanna Bernsel defended the initiative, saying it had been a success. But with Northvolt’s implosion, the EU’s most promising player in the sector is no more leaving rivals in China and the US to charge full-steam ahead.
The scramble for scraps
Northvolt’s bankruptcy now pits creditors against each other, with the EIB pledging to safeguard Europe s interests while continuing to support strategic industries driving the net-zero transition.
As member states agreed on the 2025 EU budget on November 25, which sets aside just €800m for unforeseen expenses, the looming Northvolt-shaped hole in the finances is causing more than a few sleepless nights in Brussels.
The EV dream on life support
Northvolt was supposed to be Europe’s answer to China’s dominance in battery production hope for a greener future. Now, it’s just another financial fiasco, with European taxpayers left wondering why they’re being asked to foot the bill.
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Written by
Marc Menendez-Roche
Marc is a writer, teacher, and language enthusiast with a passion for making complex topics simple and accessible.
With a background in business and legal communication and an interest in educational neuroscience, Marc has spent over a decade teaching and writing.
Now, as part of the team at Euro Weekly News, Marc enjoys diving into entertaining topics and stories that matter to the community.
When he’s not writing, Marc loves practising martial arts, playing football, cooking up a storm in the kitchen, or spending quality time with friends and family, but above all, Marc enjoys spending time with his son, Macson.
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