EU Commission dispenses €500M to improve ammunition production, aid Ukraine, and bolster EU defence, with additional funding for innovation and procurement.
The European Commission on Friday declared 500 million euros in financing awards to European companies to increase ammunition production capacity under a plan to get more shells to Ukraine and reload the stockpiles of European Union countries. The Act in Support of Ammunition Production (ASAP), will permit the European defence industry to advance its ammunition production capacity to 2 million shells per year by the end of 2025.
The Commission also established the Work Programme for the instrument for the reinforcement of the European defence industry through common procurement and the fourth annual Work Agenda of the European Defence Fund. Together, these agendas have a budget of almost €2 billion. Today’s efforts towards the support of the European defence technological and industrial base are carried in the wake of the adoption of the first-ever European Defence Industrial Strategy and the associated recommendation for a European Defence Industry Programme.
The Commission concluded the evaluation under the ASAP Regulation in a record period and selected 31 undertakings to aid the European industry in expanding its ammunition production and readiness. The selected projects wrap five areas: explosives, powder, shells, missiles, and testing and reconditioning certification. The projects will be financed with €513 million from the appropriations of the EU and Norway. This funding will leverage further investment from industry via co-financing, resulting in a total acquisition of around €1.4 billion in the supply chain.
ASAP concentrates on powder and explosives, which are back-ups for ammunition shell production, and will assign some three-quarters of the programme to them. The agenda will support projects improving the annual production capacity by more than 10,000 tons of powder and by more than 4,300 tons of explosives. For this objective, The Union will fund €248 million in powder manufacturing capability and €124 million in explosives manufacturing ability.
ASAP financing recipient businesses and their supply chains are scattered across the European Union. Support is supplied to reinforce existing production capabilities, as well as to build up new ones. The finished projects will improve the responsiveness and capacity of the Union’s defence industry, guaranteeing a faster supply of ammunition and missiles in Europe. Grant contracts with the selected applicants are anticipated to be signed in May 2024.
With the adoption of the instrument for the reinforcement of the European defence industry through the Common Procurement Work Programme, and the takeoff of the respective calls for recommendations, the Commission incentivises for the first time Member States to together acquire defence products suiting the most urgent and pressing needs, especially those boosted by Russia’s aggression against Ukraine. Aggregating needs will provide predictability and thus incentivise the industry to increase manufacturing capacity and enhance the interoperability of the national armed forces.
With absolute funding of €310 million, the EDIRPA Work Programme will sustain common procurement in three dimensions: 1) Ammunition (e.g. small arms, artillery ammunition, mortars, rockets), 2) Air and missile protection, and 3) Platforms and reserve of legacy systems (e.g. tanks, armoured cars, support systems, soldier systems, drones). These funding preferences have been set together with the Member States to manage urgent defence requirements and replenish defence stockpiles.
To guarantee Europe remains at the forefront of defence technology and invention, the Commission has also adopted the fourth annual Work Programme of the European Defence Fund and established the corresponding calls for submissions, assigning an additional €1.1 billion, including €225 million to subsidise innovation and defence start-ups via dedicated actions under the EU Defence Innovation Scheme (EUDIS). The allocation priorities are commonly arranged with the Member States and take into contemplation defence technologies and capability requirements as well as emerging threats intensified by the changed security environment.
