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European Commission allocates €500 million to ramp up ammunition production

Source: European Commission (DG DEFIS), Defence Industry Europe

The European Commission allocated the €500 million foreseen under the Act in Support of Ammunition Production (ASAP). This will allow the European defence industry to ramp up its ammunition production capacity to 2 million shells per year by the end of 2025.

 

The Commission also launched the Work Programme for the instrument for the reinforcement of the European defence industry through common procurement (EDIRPA) and the fourth annual Work Programme of the European Defence Fund (EDF).

Together, these programmes have a budget of almost €2 billion. Today’s steps towards the reinforcement of the European defence technological and industrial base are taken in the wake of the adoption of the first ever European Defence Industrial Strategy (EDIS) and the associated proposal for a European Defence Industry Programme (EDIP).

 

 

€500 million to ramp-up ammunition production capacity to 2 million per year

With the support of ASAP, Europe is expected to reach an annual ammunition shell production capacity 2 million by the end of 2025.

The Commission completed the evaluation under the ASAP Regulation in record time and selected 31 projects to assist European industry in increasing its ammunition production and readiness.

 

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The selected projects cover five areas: explosives, powder, shells, missiles, and testing and reconditioning certification. The projects will be funded with €513 million from the budgets of the EU and Norway. This funding will leverage additional investment from industry through co-financing, resulting in a total investment of around €1.4 billion in the supply chain.

ASAP focuses on powder and explosives, which are bottlenecks for ammunition shell production, and will allocate some three quarters of the programme to them. The programme will support projects increasing the annual production capacity by more than 10 000 tons of powder, and by more than 4 300 tons of explosives. For this purpose, The Union will invest €248 million in powder manufacturing capacity and €124 million in explosives manufacturing capacity.

 

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Thanks to measures already taken, European annual production capacity for 155 mm shells had already reached 1 million per year in January 2024.

ASAP funding recipient companies and their supply chains are spread across the European Union. Support is provided to reinforcing existing production capacities, as well as to build up new ones. The completed projects will enhance the responsiveness and capability of the Union’s defence industry, ensuring a faster supply of ammunition and missiles in Europe.

Grant agreements with the selected applicants are expected to be signed in May 2024.

 

€310 million to incentivise Member States to procure defence capabilities together

With the adoption of the instrument for the reinforcement of the European defence industry through common procurement (EDIRPA) Work Programme, and the launch of the respective calls for proposals, the Commission incentivises for the first time Member States to jointly acquire defence products serving the most urgent and critical needs, especially those amplified by Russia’s aggression against Ukraine. Aggregating demand will provide predictability and therefore incentivise our industry to ramp up manufacturing capacity, and will improve the interoperability of the national armed forces.

 

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With a total budget of €310 million, the EDIRPA Work Programme will support common procurement in three areas: 1) Ammunition (e.g. small arms, artillery ammunition, mortars, rockets), 2) Air and missile defence, and 3) Platforms and replacement of legacy systems (e.g. tanks, armoured vehicles, support systems, soldier systems, drones). These funding priorities have been set together with the Member States to address urgent defence needs and replenish defence stockpiles.
The submission deadline for proposals is 25 July 2024.

 

€1.1 billion to boost EU defence R&D projects

To ensure Europe remains at the cutting edge of defence technology and innovation, the Commission has adopted the fourth annual Work Programme of the European Defence Fund (EDF) and launched the corresponding calls for proposals, allocating an additional €1.1 billion, including €225 million to support innovation and defence start-ups through dedicated measures under the EU Defence Innovation Scheme (EUDIS). The funding priorities are commonly agreed upon with the Member States and take into consideration defence technologies and capability needs as well as emerging threats amplified by the changed security environment.

 

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The 2024 EDF work programme covering 32 call topics will fund projects in crucial defence domains, including countering hypersonic missiles, developing a range of unmanned vehicles in the air and on the ground, and ensuring secure space communication. It prepares the ground for next generation defence systems, such as helicopters and mid-size cargo aircraft.

Additionally, the Work Programme offers support measures to promote defence innovation and inclusiveness through the EU Defence Innovation Scheme (EUDIS), with funding for a EUDIS Business Accelerator and Matchmaking opportunities with investors.

The submission deadline for proposals is 5 November 2024.

 

Background

The Act in Support of Ammunition Production (ASAP) is a direct response to the Council’s  to urgently deliver ammunition, and if requested missiles, to Ukraine, and to help Member States refill their stocks by introducing targeted measures. The Act aims at ensuring that the EU can ramp up its ammunition production capacity. Financial support will be provided in the form of grants to various types of actions contributing to the efforts of the European defence industry to increase its production capacities and tackle bottlenecks. ASAP implements track 3 (industrial part) of the so-called three-track approach of the ammunition plan agreed by the Council in March 2023.

 

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The instrument for the reinforcement of the European defence industry through common procurement (EDIRPA) responds to Member States’ request to address the most urgent and critical defence product needs resulting from Russia’s aggression against Ukraine. The instrument incentivises Member States, in a spirit of solidarity, to commonly procure defence capabilities for their armed forces and facilitates access for all Member States to defence products being urgently needed.

The European Defence Fund is the Commission’s instrument to support defence R&D and cooperation. Without substituting Member States’ efforts, it promotes cooperation between companies of all sizes and research actors throughout the EU and Norway (as an associated country). The EDF supports competitive and collaborative defence projects throughout the entire cycle of research and development, focusing on projects leading to state-of-the-art and interoperable defence technologies and equipment. It also fosters innovation and incentivises the cross-border participation of SMEs. The Work Programme and the funding priorities are defined based on the defence capability priorities agreed by Member States within the framework of the Common Security and Defence Policy (CSDP), and particularly in the context of the Capability Development Plan (CDP). With the adoption of this annual work programme 2024, the Commission has committed to invest more than €4 billion in collaborative defence R&D since the entry into force of the EDF Regulation in May 2021.

 

 

These measures, complemented by the recently announced Commission proposal for a European Defence Industry Programme (EDIP), ensure a structural, longer-term approach to achieve defence industrial readiness. They provide continuity of the support to the European defence technological and industrial base, to enable its swift adaptation to the new security environment.

 

 

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