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EU boosts defense industry with €500 million for ammunition production

The European Commission allocates €500 million to increase ammunition production capacity to 2 million shells per year by 2025.
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European Union Flags. Credit: Wikimedia Commons/Thijs ter Haar
EU boosts defense industry with €500 million for ammunition production

The European Commission announced a significant step in bolstering the European Union’s defense capabilities by allocating €500 million under the Act in Support of Ammunition Production (ASAP). This funding aims to increase the European defense industry’s ammunition production capacity to 2 million shells per year by the end of 2025.

This follows the recent adoption of the first-ever European Defense Industrial Strategy (EDIS) at the EU level, a landmark initiative to bolster the competitiveness and readiness of the EU’s defense industry.

The Commission also unveiled the Work Programme for the instrument for the reinforcement of the European defense industry through common procurement (EDIRPA) and the fourth annual Work Programme of the European Defence Fund (EDF), with a combined budget of almost €2 billion.

With ASAP’s support, Europe aims to achieve an annual ammunition shell production capacity of 2 million by 2025. The Commission has selected 31 projects to assist the European industry in increasing its ammunition production and readiness, covering areas such as explosives, powder, shells, missiles, and testing and reconditioning certification. The projects will be funded with €513 million from the EU and Norway budgets, leveraging additional industry investment through co-financing, resulting in a total investment of around €1.4 billion in the supply chain.

Under the EDIS strategy, Member States are encouraged to collaboratively procure at least 40% of their defense equipment by 2030, aim for intra-EU defense trade to represent at least 35% of the EU defense market, and progressively increase their defense procurement budget within the EU to at least 50%, with a target of 60% by 2035.

ASAP will allocate a significant portion of its funding to powder and explosives, which are critical bottlenecks for ammunition shell production. The program aims to increase the annual production capacity by more than 10,000 tons of powder and more than 4,300 tons of explosives.

The EDIRPA Work Programme, with a total budget of €310 million, encourages Member States to jointly acquire defense products serving urgent and critical needs, particularly those highlighted by Russia’s aggression against Ukraine. The program supports common procurement in areas such as ammunition, air and missile defense, and platforms and replacement of legacy systems.

EU unveils sweeping strategy to get “defense ready” amid Russia-Ukraine war

In a major policy address on 11 March, Josep Borrell, the EU’s High Representative for Foreign Affairs and Security Policy, laid out the urgency of ramping up arms production capabilities after two years of arming Ukraine from existing stockpiles that are now depleted.

“After two years of a high intensity war, existing stocks are depleted and the conflict has evolved from a war of stocks to a war of production,” Borrelll stated. “We need to boost our defense industrial and technological base. It was not clear to anybody before Russia’s war of aggression against Ukraine, but now it has become common sense.”

Earlier, Euractive reported that the European Commission aims to grant Ukraine full membership in the EU’s defense industry support scheme. According to Euractive, the draft text specifies that Ukraine should be allowed to join any country consortium for joint procurement of military equipment, have access to EU funds, and VAT-exemption for joint ownership.

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