Brussels, 15 March 2024
Today, the 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.
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.
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.
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.
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.
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.
More Information
Quote(s)
Now €2 billion are invested in defence-related research and development, ammunition production, and common procurement. These are important steps to invest more, better, together and European. They show the potential of the recently proposed European Defence Industry Programme and contribute to our efforts to support Ukraine. And the EU delivers on its promise to strengthen the European defence technological and industrial base.
Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age
The Act in Support of Ammunition Production (ASAP) is in motion! We are investing €500m into 31 industrial defence projects to ramp up ammunition production. This is the first time we use the EU budget to support the defence industrial production capacities. Unprecedented. The signal we send is clear: Europe is ready to produce more, faster and together as Europeans.
Thierry Breton, Commissioner for Internal Market
Source – EU Commission
Questions and Answers on the Act in Support of Ammunition Production (ASAP) and on the Instrument for the European defence industry reinforcement through common procurement (EDIRPA)
15 March 2024
The Act in Support of Ammunition Production (ASAP)
What is the objective of the ASAP Instrument, work programme and the calls for proposals that have been launched?
The objectives of the Act in Support of Ammunition Production (ASAP) instrument are to support EU’s defence industry to ramp up its manufacturing capacities to match increased demand for ammunition and missiles. It also aims to secure supply and availability of critical inputs such as raw materials and components, facilitate access to finance for EU defence companies and mobilise private funding and address bottlenecks in production to enable faster delivery rates.
What are the funding priorities identified in the ASAP Work Programme?
The ASAP Work Programme targets key bottlenecks identified in the ammunition supply chains: explosives, propelling powder, and shells, and supports the missiles production ramp-up. It also addresses the obsolescence, testing, or reconditioning certification of relevant defence products. Accordingly, the ASAP Work Programme is structured along 5 calls for proposals on the following topics:
- Explosives;
- Powder;
- Shells;
- Missiles;
- Testing and Reconditioning certification.
What was the basis for the preparation of the ASAP Work Programme and identifying the respective priorities?
The structure of the ASAP Work Programme is supported by information which was gathered through:
- Research and analysis within the Defence Joint Procurement Task Force;
- Information collected during Commissioner Breton’s visits to key manufacturers in EU Member States;
- Bilateral exchanges with industrial stakeholders.
What is the link between ASAP and EDIRPA?
Both instruments, ASAP and EDIRPA, are complementary initiatives, on the supply and demand side respectively.
EDIRPA aims at incentivising Member States to commonly procure urgently needed defence capabilities and products. Therefore, it will support cooperation of at least three Member States for the common procurement of most critical and urgent defence products from the EU’s Defence and Technological Industrial Base (EDTIB), hence contributing to its competitiveness and its adaptation to the current context.
The objective of ASAP is to support and accelerate the immediate ramp-up of production capacity of ammunition and missiles in the EU. It will therefore directly support producers of these defence products, as well as their supply chains.
Is the budget sufficient considering the ammunition needs of Ukraine?
While half a billion euro is coming from the EU budget, the underlying co-financing principle means that these funds will leverage additional funding from industry bringing total investment in the whole supply chain to around €1,4 billion.
Furthermore, project proposals submitted under and ranked above a predefined quality threshold but not funded by ASAP due to budgetary constraints will be awarded the Seal of Excellence certificate which is a quality label first introduced under Horizon 2020, the EU’s previous research and innovation framework programme (2014-2020). With this label, the Commission recognises the value of project proposals and encourages other funding organisations to take advantage of the high-quality proposals (e.g. for funding under EU Cohesion Funds), with much simplified selection procedures.
The funding should also be seen in the context of individual Member States’ own contributions to Ukraine and in support of their respective defence industries.
When will the projects deliver results and what is the impact of the ASAP funding?
To avoid potential delays to industrial actions contributing to ensure the effective supply and timely availability of ammunition and missiles, ASAP provides for a retroactivity clause so that actions having begun after 20 March 2023 may be eligible for EU support. All projects will be completed within a maximum of 36 months. However, some projects are already able to deliver results now, and significant improvement will be observed already by the end of 2024.
ASAP will address bottlenecks throughout the supply chains of ammunition and missiles in the EU and Norway, by supporting industry to rapidly adjust to new market trends and reduce dependencies.
How long will the ASAP programme last for and will it be repeated/extended?
On 18 October 2023, the Commission adopted the Work Programme foreseen in the Regulation on supporting Ammunition Production (ASAP). This work programme covers the period 2023-2025 by which time all ASAP funded projects will have been completed.
On 5 March, the Commission adopted a proposal for the new defence industry programme (EDIP), which also includes actions in support of ramping-up ammunition production.
What is the link between ASAP and the overall EU policy in support of Ukraine / improvement of the Union’s defence capabilities?
ASAP is a direct response to the Council’s call to urgently deliver ammunition, and missiles if requested, to Ukraine and to help Member States replenish their stocks by introducing targeted measures.
Aimed at enabling ramp-up of ammunition production capacity across Europe, ASAP constitutes the track 3 (industrial part) of the so-called three-track approach of the ammunition plan agreed by the Council.
The three tracks are closely interlinked. For Member States to be able to use their ammunition in stock to support Ukraine (track 1) and subsequently replenish it with new orders (track 2), there needs to be enough confidence that the EU artillery ammunition and missiles producers can match the demand (track 3) in a timely manner.
The Instrument for the European defence industry reinforcement through common procurement (EDIRPA)
What are the objectives of the EDIRPA Instrument?
EDIRPA aims at incentivising Member States to commonly procure defence products for which there is an urgent and critical need, especially those amplified following the Russian aggression against Ukraine.
EDIRPA also aims at strengthening the European Defence Technological and Industrial Base (EDTIB) – and by providing predictability – to increase its manufacturing capacity and face the increase in demand for defence equipment. It will also lead to increased interoperability between the armed forces of the Member States.
What is the objective of the Work Programme?
The EDIRPA work programme reflects the shared political will and the needs identified together with the Member States/Norway to establish funding priorities for the replenishment of defence stockpiles, the reinforcement of capabilities and the replacement of Soviet-era legacy equipment.
The funding priorities align with the capability gaps identified in the Joint Communication on the Defence Investment Gaps Analysis and Way Forward of 18 May 2022.
What are the funding priorities of the EDIRPA Work Programme?
The work programme identifies three calls for proposals with a total indicative budget of €310 million, in the following areas:
- A call for proposals for common procurement of ‘Ammunition’ with a budget of €103.2 million.
- A call for proposals on ‘Air and Missile Defence’ with a budget of €103.2 million.
- A call for proposals on ‘Legacy Systems and Platforms’ with a budget of €103.2 million.
Is the budget sufficient considering the defence procurement needs of MS?
The programme does not aim to substitute national defence budgets, but to incentivize cooperation for the most urgent defence products.
The EU financial support is not related to the procurement of the defence capabilities but is envisaged to cover ‘cooperation costs’ between Member States for procurements that are of much larger financial magnitude than the EDIRPA contribution.
Who will benefit from the procurement actions? Is the EU buying weapons?
The programme supports the procurement of defence capabilities by the armed forces of the EU Member States and Norway. Neither the EU, nor the Commission, will procure defence products.
How long will the EDIRPA programme last for?
The EDIRPA programme is a short-term urgency instrument as a consequence of Russia’s aggression against Ukraine that lasts in 2024 and 2025.
On 5 March, the Commission adopted a proposal for new defence industry programme (EDIP), which also includes the continuation of actions in support of common procurement of defence capabilities by the EU Member States.
With the Work Programme adopted, what happens next?
The Commission will publish and open for submission the calls for proposals in the next days on the EU Funding and Tenders Portal.
Potential applicants (national procurement authorities, the European Defence Agency or an international organisation designated to conduct a common procurement) can submit proposals by 25 July 2024 and the Commission services will then evaluate the proposals received. The highest scored proposals within the available budget will be selected for funding. Awarded projects, composed of consortia of at least 3 Member States, will then receive EU grants.
How are Ukraine and Moldova involved in the EDIRPA programme?
Under the EDIRPA Regulation, Member States can make Ukraine and Moldova a recipient of quantities of the defence products concerned by the collaborative procurement action.
Is there possible duplication between EDIRPA funding and support provided by the European Peace Facility?
There is no possible duplication between the European Peace Facility (EPF) and the EDIRPA funding. The EPF is an off-budget programme outside the frame of the Multiannual Financial Framework currently used to reimburse Member States transfer of mainly in-stock and/or in-service defence systems to Ukraine. EDIRPA support is not linked to the cost of the procured capabilities but covers the cooperation cost related to common procurements.
Source – EU Commission