European Defence Fund: EU to invest €832 million in 41 ambitious defence industrial projects

Today, the Commission announced the results of the 2022 calls for proposals under the European Defence Fund (EDF) amounting to €832 million of EU funding in support of 41 joint defence research and development projects across the EU.

The selected projects will help further develop EU’s high-end defence capabilities in critical areas such as, naval, ground, air combat, space-based early warning and cyber. For example, in the Naval field, the E-NACSOS project will focus on a new collaborative standard for anti-air and missile defence. In the Air category, the project REACTII will improve the resilience and management for electronic warfare. Another project in the space domain, ODIN’S EYE II, will build on the progress on space-based missile early warning and will gather industry from 14 EU Member States and Norway to increase European capability in this area. The EDF will also directly contribute to Cyber defence in three specific research and development projects.

For the first time, the EDF will launch a €25 million technological challenge under the EU Defence Innovation Scheme (EUDIS). In this technological challenge teams will compete to bring forward the best solution to detect hidden threats through unmanned systems and allow military and civilian personnel to operate safer in conflict environments.

The outcome of the 2022 calls reaffirms that the EDF contributes to the EU’s strategic autonomy and to creating a more competitive and integrated European defence technological and industrial base. The 2022 call results also confirm the strong interest and active engagement of the EU defence industry in all call topics and demonstrate their strong commitment to the ambition pursued through the programme. Selected consortia bring together 550 entities from across the EU and Norway and strongly involve SMEs, which represent 39% of all entities.

The success of this second year of EDF calls shows that the programme, building upon its two precursor programmes (the Preparatory Action on Defence Research and the European Defence Industrial Development Programme), is fit for purpose:

Highly attractive programme with strong interest by EU industry: 134 proposals received by diverse consortia, encompassing large industries, SMEs, midcaps and Research and Technology organisations, and covering all calls and topics published
Wide geographical coverage: 550 legal entities from 26 EU Member States and Norway participate in the selected proposals
Wide cooperation within projects: on average, selected proposals involve 22 entities from 9 EU Member States and Norway
Strong involvement of Small and Medium-sized Enterprises (SMEs): SMEs represent over 39% of all entities in selected proposals receiving 20% of the total requested EU funding
Good balance between research and capability development actions: €317 million to fund’s 25 research projects and €514 million to fund 14 capability development projects
Support for disruptive technologies for defence: 4.5% of the budget dedicated to fund game-changing ideas that will bring innovation to radically change the concepts and conduct of defence projects
Balanced support for strategic defence capabilities and new, promising technology solutions
Consistency with other EU defence initiatives: through the EU Strategic Compass, EU capability priorities, and Permanent Structured Cooperation (PESCO), with 11 of the selected development proposals linked to PESCO

The Commission will now enter into grant agreement preparation with the selected consortia. Following the successful conclusion of this process and the adoption of the Commission’s award decision, the grant agreements will be signed, before the end of the year.

Last week, the Commission proposed to reinforce the long-term EU budget and to create a Strategic Technologies for Europe Platform (STEP). This new instrument will reinforce and allocate an additional €1.5 billion to the European Defence Fund, as well as additional funding for other existing EU programmes. The top-up of the European Defence Fund will be used for actions focused on deep and digitial technologies that can significantly boost the performance of future capabilities throughout the Union, aiming to maximise innovation and introduce new defence products and technologies. This will further boost the innovation capacity of the European defence technological and industrial base.

Background

The European defence industry submitted, by 24 November 2022, 134 proposals for joint defence R&D projects in response to the 2022 European Defence Fund (EDF) calls for proposals, reflecting all the thematic priorities identified by the Member States with the support of the Commission.

The EDF is the EU’s key instrument to support defence R&D 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 collaborative defence projects throughout the entire cycle of research and development, focusing on projects resulting in 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 EU capability priorities commonly 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 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 the defence sector.

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) threats, 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 and environmental transition, materials and 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 and training.

Quotes

Executive Vice-President, Margrethe Vestager, said: “The defence industry needs to continue to innovate to prepare for security threats. The results of the 2022 calls confirm the high interest of EU industry in the European Defence Fund (EDF). No less than 134 high-quality proposals competed for funding, out of which 41 were selected. With the help of the EDF National Focal Points that are also actively supported under this year’s budget, the Fund starts to get known beyond the circle of the traditional defence actors. We can be proud that SMEs account for 39% of the entities participating in selected projects. It demonstrates the attractiveness of the Fund to small and often new defence players”.

Commissioner for Internal Market, Thierry Breton, said: “Through the European Defence Fund, the EU invests in technologies and capabilities against emerging and future threats — in naval, ground, air, space or cyber — with a specific focus this year on air defence capacities, electronic warfare and cyber-defence. The EDF is a strong contribution to Europe’s freedom of action, technological leadership and more integrated European defence industrial basis. The projects undertaken this year demonstrate that European Member States, through effective cooperation, are building a stronger European Defence.”

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Publication date: 26 June 2023