EU Commission announces €2 bn defence projects for armaments production, joint purchases and research

The EU’s executive announced on Friday (15 March) a series of deals and subsidised projects for the defence industry, in a bid to boost ammunition production and joint procurement to speed up deliveries to Ukraine.

The Commission also revealed the work programme for the European defence industry reinforcement through the Common Procurement Act (EDIRPA) to help joint procurement of EU countries’ missing key capabilities following donations to Kyiv, with an emphasis on ammo and air defence but also land capabilities.

It unveiled how much the bloc’s production capacity in ammunition is expected to rise in the coming year thanks to Act in Support of Ammunition Production (ASAP) and which companies got the deals.

A large series of initiatives to deal with the consequences of the Ukraine war and motivate countries to work together in producing and purchasing, came on top of the earlier programme for research and development.

The European Commission also revealed the work programme for 2024 of the European Defence Fund (EDF) to motivate collaborative defence research and development.

A total of €1,1 billion is mobilised for 32 calls, the Commission announced.

As previously reported by Euractiv, it will notably focus on the development of a Hypersonic glide vehicle (HGV) demonstrator. The EU executive and member states are looking to invest €78 million to detect, track and counter hypersonic weapons.

While the EU may invest in motivating joint procurement and production capacity enhancement, but it will still not solve the issue of the factories not producing enough if the governments – the sole potential clients – are not placing orders.

“We need indeed the contracts – we are inviting the member states to place orders,” one Commission official said, as a reminder that the EU cannot substitute the governments in buying ammunition and missiles for them to replenish warehouses and help Ukraine to fight Russia.

“We know thanks to contact with the industry that contracts are key trigger of investment,” the official said, explaining the move to motivate the governments to place orders and give the companies long-term visibility. 

“The fact is that we are undersized in terms of the needs,” the official added.

Multiplying ammo production capacity

The most emblematic and highly awaited announcement is for the grant allocation to help companies across the bloc ramp up production capacity, under the umbrella of the ammunition and missile production booster ASAP.

A list of 31 projects was selected across 15 countries (mainly in Germany, Norway, France, Italy, Greece, Czechia, Finland), focused on five needs: explosives (processing chemicals and final product), powder, shells, missiles, testing, and reconditioning.

The projects focus on reducing main bottlenecks during the supply chain, one EU Commission official said.

The €500 million plan will run for projects that already started in 2023 and will end in 2025, with the aim to increase production capacity, along the following lines, according to the Commission’s assessment:

Explosives:  4300 tonnes/year, which is enough to produce an additional 800,000 shells. Explosives are all in the supply chains for 155 mm artillery shells production.

Powder: 10.000 tonnes/year, which is enough to fill an additional 1,3 million shells.

Shells: 600.000 shells/year, bringing the total shell production capacity around 1,4 to 1,7 millions a year by the end of 2024, and with the aim of surpassing the 2 millions / year early 2026.

Missiles: Projects include increase capacities of manufacturing of components and complete missiles, no specific indication given.

Testing and reconditioning certification will be part of the programme via a project in Slovakia.

“This is truly a European effort,” the EU Commission official said ahead of the announcement.

A longer-term strategy and regulation under the name of the European Defence Investment Programme (EDIP) aims to rehaul the bloc’s military-industrial complex to continue what started with ASAP, expand it to new kinds of equipment, and prepare for any future crises.

EU leaders meeting on 21-22 March are set to touch upon where to find money for that.

Joint procurement subsidised air superiority and land systems

The Commission also announced the work programme for the joint procurement vehicle EDIRPA, where the EU wants to cover the additional administrative costs of the collaboration to motivate countries to purchase together.

The €310 million fund aims to help EU countries re-fill their stockpiles after having donated large shares to Ukraine starting two years ago.

Three calls of proposals are put forward for the industry to answer, with a deadline of 25 July:

Ammunition purchases will benefit from 103,2 million, including for small arms, tank and anti-tank ammunition, mortars.

Air and missile defence contracts get 103,2 million, including for man-portable air defence systems (MANDPAD), ground-to-air ammunition, drones (UAS), air surveillance and defence radars.

Another 103,2 million will go to joint purchase contracts for tanks, armoured vehicls, support vehicles, combat platform, soldier systems.

[Edited by Zoran Radosavljevic]

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