The leader of Denmark’s statutory pensions giant ATP – which is heavily invested in crisis-hit Swedish green battery firm Northvolt – is warning European politicians they must be willing to put public money into climate transition technology to compete with China and the US.
In an interview with Danish news service Finans, Martin Præstegaard, chief executive officer of the DKK693bn (€92.9bn) statutory pension scheme, said he was sorry about the crisis which has enveloped Northvolt.
The Swedish company is currently in talks with investors including other big Nordic pension funds over its funding and other problems, and has had to cut its workforce and sell of parts of the business to survive.
With its Skellefteå factory set to become Europe’s first large-scale factory for making and recycling sustainable batteries, pension funds put money into Northvolt from 2019 onwards, eyeing a key role for Northvolt in growing the electric vehicle market.
“I’m really annoyed. I’m annoyed on behalf of our pensioners, I’m annoyed on our own behalf, and I’m annoyed for Europe,” Præstegaard said.
Præstegaard said of the Northvolt crisis: “It’s a wake-up call for Europe.”
“If we in Europe are not able to raise the production of batteries or other strategically important industries, things look difficult,” he said.
The ATP CEO said in the article published today that apart from its potential returns for investors, Northvolt had also been of strategic importance for Europe, because the company seemed to have found the recipe for how to challenge Chinese manufacturers in the sector — however that recipe did not seem to be working.
“We have to admit that the Chinese are capable of it. The Americans are probably capable of it too. And we still need to find our recipe for it. That, I think, is serious,” Præstegaard said.
China had been able both to develop and scale the production of solar cells, batteries, green fuel and many other core technologies in the green transition incredibly quickly, he said, adding that Northvolt’s failed attempt to do the same called for political attention.
Decisions needed to be made more quickly, and there had to be a willingness to invest public money in technologies that may flop, the ATP CEO said.
“People are very thorough when it comes to assessing risks, in order to avoid wasting a lot of state aid when things go wrong,” he said.
“But if you look at China, there is a lot of waste of aid and a lot of things go wrong. In return, they gain speed. And we could learn something from that,” he added.
He said it could not just be left up to private investors to find the money for climate solutions.
“It must make sense for us financially and for our pensioners. We will only increase investment if we have a corresponding upside,’ Præstegaard continued.
Asked by Finans what politicians could do, the CEO said individual states and the EU could make the investment decision easier by reducing the risk.
“They can, for example, provide some support, or they can introduce some requirements to ensure demand,” he said in the article.
Regarding the status of current efforts to bail Northvolt out, Præstegaard said he could not comment on the many rumours.
“I can only send the signal that there are good forces trying to find a solution,” the CEO noted.
He defended ATP’s decision-making in having taken on the investment, even though it was made before he arrived at the pension fund in 2022.
“After all, we went in alongside large, skilled investors, led by Goldman Sachs. Volkswagen, which was a major customer, was also involved. It was an extremely favourable situation,” he said.
“It was before my time, but it’s not as if you can go back and say someone overlooked something,” he added.
Asked whether lessons had been learned, though, Præstegaard told Finans: “We will assess the risk in this type of investment at a higher level than we have done in the past.”
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