Defence Industry: EU takes steps to invest almost €1.2 billion to support 61 defence industrial cooperation projects
Brussels, 20 July 2022 Today, the Commission announced plans to grant a total EU funding of almost €1.2 billion supporting 61 collaborative defence research and development projects selected following the first ever calls for proposals under the European Defence Fund (EDF).
With the proposals selected for funding, the EDF will support high-end defence capability projects such as the next generation of fighter aircrafts, tanks and ships, as well as critical defence technologies such as military cloud, Artificial Intelligence, semiconductors, space, cyber or medical counter-measures. It will also spearhead disruptive technologies, notably in quantum technologies and new materials and tap into promising SMEs and start-ups.
Welcoming this major step for European defence cooperation, Executive Vice-President, Margrethe Vestager, said: “The high-quality projects selected have shown that defence industrial cooperation in Europe can be truly achieved, and even on a wide scale. The almost 700 companies that will research and develop the next-generation of innovative defence technologies through EU funds will put into motion a resilient and competitive industrial base. With SMEs accounting for 43% of the entities participating in selected projects, this shows that the European Defence Fund programme does involve the entire EU industrial value chain.”
Thierry Breton, Commissioner for Internal Market, said: “With €1.2 billion invested in 61 European cooperative defence projects, the European Defence Fund is today delivering concrete results towards a more integrated European defence industry which fosters innovation and provides cutting-edge capabilities to our armed forces. Through the European Defence Fund, European cooperation in defence becomes increasingly the norm. We spend better by spending together. It benefits all Member States and European defence industry big or small.”
The success of the first year of the EDF shows that its model, based on those of its two precursor programmes (the Preparatory Action on Defence Research ‘PADR’ and the European Defence Industrial Development Programme ‘EDIDP’, is fit for its purpose:
Highly attractive programme with strong interest by EU industry: a record number – overtaking by far the precursor programmes – of 142 proposals received, made up of large prime industries, SMEs, midcaps and RTOs, covering all calls and topics published;
Wide geographical coverage: almost 700 legal entities from 26 EU Member States and Norway participating in the selected proposals;
Reinforced defence cooperation: on average, selected proposals involve 18 entities from 8 EU Member States and Norway;
Strong involvement of Small and Medium-sized Enterprises (SMEs): SMEs represent over 40% of all entities in selected proposals receiving close to 20% of the total requested EU funding;
Good balance between research and capability development: €322 million to fund 31 research projects and €845 million to fund 30 large-scale projects to develop systems and technologies for defence capabilities;
Support to disruptive technologies for defence: over 5% of the budget dedicated to fund game-changing ideas that will bring innovation to radically change the concepts and conduct of defence affairs;
Consistency with priorities at EU level: notably the Permanent Structured Cooperation (PESCO), with half of the selected development proposals claiming to be established in the context of a PESCO project.
The Commission services will now enter into grant agreement preparation with the selected applying consortia. Following the successful conclusion of the grant agreement preparations and the adoption of a Commission award decision, the grant agreements will be signed before the end of the year.
In June 2021, the Commission adopted the European Defence Fund’s first annual work programme and published a first series of 23 calls for proposals, which contained 11 calls targeting research actions and 12 calls targeting development actions, addressing a total of 37 topics.
The European Defence Fund (EDF) is the Commission’s flagship instrument to support defence cooperation in Europe. Without substituting Member States’ efforts, it promotes cooperation between companies of all sizes and research actors throughout the EU. 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. Projects are selected following calls for proposals which 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).
The EDF is endowed with a budget of €7,953 billion in current prices for the period 2021-2027. This financial envelope is divided into two pillars: €2,651 billion will be allocated to funding collaborative defence research to address emerging and future security threats; and €5,302 billion to co-finance collaborative capability development projects.
Between 4% and 8% of the EDF budget is devoted to development or research for disruptive technologies having the potential to create game-changing innovations in a defence context.
The EDF is implemented through annual work programmes structured along 17 stable thematic and horizontal categories of actions during the Multiannual Financial Framework period 2021-2027, focusing on:
Emerging challenges to shape a multidimensional and holistic approach to the modern-day battlespace, such as defence medical support, Chemical Biological Radiological Nuclear (CBRN), biotech and human factors, information superiority, advanced passive and active sensors, cyber and space;
Boosters and enablers for defence to bring a key technology push to the EDF and which are relevant across capability domains, such as digital transformation, energy resilience & environmental transition, materials & components, disruptive technologies and open calls for innovative and future-oriented defence solutions, including dedicated calls for SMEs;
Excellence in warfare to enhance the capability pull and support ambitious defence systems, such as air combat, air and missile defence, ground combat, force protection and mobility, naval combat, underwater warfare and simulation & training.