(*) Key achievements in the table state which period they relate to. Some come from the implementation of the predecessor programmes under the 2014-2020 multiannual financial framework. The data relating to the European Defence Fund and its precursor programmes are presented relevant to the date of the grant agreement signature of relevant projects (i.e. the data are presented with a 2-year delay).
Budget for 2021-2027
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Rationale and design of the programme
The European Defence Fund (EDF) was launched as the cornerstone of the European defence action plan. The fund is inextricably linked to the EU’s initiatives on a more integrated European defence market. By encouraging cooperation, the EU can help maximise the output and quality of Member States’ investment in defence. The EDF brings EU added value by incentivising joint research on and the development of products and technologies in the area of defence to increase the efficiency of public expenditure and contribute to the EU’s operational autonomy. The EDF complements rather than substitutes national funding already used for this purpose, acting as an incentive for Member States to cooperate and to invest more in defence.
The EU defence sector is essential to the future of the EU. It plays a key role in ensuring the EU’s strategic sovereignty and its capacity to act as a security provider. Yet the sector faces challenges that call into question the preservation of its competitiveness and its technological edge. The costs of defence systems are rising and include a high proportion of research and development costs. Combined with the significant cuts made to EU Member States’ defence budgets before deteriorated security situation in Europe, the development of new high-end defence systems is increasingly beyond the capacity of individual Member States (there has been a 12% increase of the defence expenditure between 2021 and 2022). European collaborative equipment expenditure stands at only 18% of total defence spending for equipment procurement in 2021, against an ambition of 35%. Only 7.1% of total defence research and technology development is collaborative in 2022, against an ambition of 20%. The European defence industry and market remain fragmented along national borders, with unnecessary duplications despite limited investment.
This may weaken the technological advantage of the sector and hamper its ability to develop defence systems that are crucial for the security of the EU and its Member States. Russia’s unprovoked and unjustified military aggression against Ukraine resulted in major changes in the EU security landscape, making EU action in the field of security and defence more urgent than ever.
Tackling the above challenges calls for action at the EU level.
The EDF seeks to foster collaboration amongst the Member States, overcome fragmentation and enhance the competitiveness and the technological sovereignty of the European defence industry.
The EDF has the following specific objectives: (1) support collaborative defence research that could significantly boost the performance of future capabilities throughout the EU; and (2) support collaborative development of defence products and technologies consistent with defence capability priorities commonly agreed by Member States. The fund aims at providing consistent support throughout the full research and development cycle.
The EDF may provide funding through grants, prizes and procurement, and, where appropriate in view of the specificities of the action, financial instruments within blending operations. An EDF-eligible action shall relate to one or more of the following activities: (a) activities that aim to create, underpin and improve knowledge, products and technologies, including disruptive technologies for defence, which can achieve significant effects in the area of defence; (b) activities that aim to increase interoperability and resilience, including secured production and exchange of data, to master critical defence technologies, to strengthen the security of supply or to enable the effective exploitation of results for defence products and technologies; (c) studies, such as feasibility studies to explore the feasibility of new or upgraded products, technologies, processes, services and solutions; (d) the design of a defence product, tangible or intangible component or technology as well as the definition of the technical specifications on which such a design has been developed, including any partial tests for risk reduction in an industrial or representative environment; (e) the system prototyping of a defence product, tangible or intangible component or technology; (f) the testing of a defence product, tangible or intangible component or technology; (g) the qualification of a defence product, tangible or intangible component or technology; (h) the certification of a defence product, tangible or intangible component or technology; (i) the development of technologies or assets increasing efficiency across the life cycle of defence products and technologies.
The EDF is implemented through direct management by the Directorate-General for Defence Industry and Space. On an ad hoc basis, and if justified, specific initiatives may be implemented under indirect management.
The EDF builds and expands on the experience acquired through two precursor programmes implemented under the 2014-2020 multiannual financial framework, namely the preparatory action on defence research (PADR) and the European defence industrial development programme (EDIDP).
The design of the EDF largely builds on the architecture of these two 2014-2020 programmes, but it has be implemented as one single fund. The EDF will lead to better exploitation of defence research results, bridging the gap between the research and the development phases and promoting all forms of innovation, including support for disruptive defence technologies. It will encourage small and medium-sized enterprises and entities not yet involved in defence-specific research and development to participate in the programme and to be involved in cross-border cooperation.
Programme website:
Impact assessment:
- The impact assessment of the EDF programme was carried out in 2018.
- For further information please consult https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018SC0345.
Relevant regulation:
- Regulation (EU) 2021/697 of the European Parliament and of the Council;
- Regulation (EU) 2018/1092 of the European Parliament and of the Council establishing the European defence industrial development programme.
Evaluations:
- Ex ante evaluation of the European defence industrial development programme, SWD(2017) 228 final.
Budget
Budget programming (million EUR):
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Financial programming:
- EUR 826.4 million (+ 10%)
compared to the legal basis*
* Top-ups pursuant to Article 5 of the multiannual financial framework regulation are excluded from financial programming in this comparison.
- The financial programming of the EDF is in line with the objectives of the EDF regulation. The increase in the last years of the financial period follows the planned ramp-up of the number of projects funded under the EDF programme.
- The decrease of EUR 400 million versus the legal basis is the result of the contribution of the defence programme to the new proposal of the ‘infrastructure for resilience, interconnectivity and security by satellite’ (secure connectivity) programme. The financial programming for this project is not included in the figures in the above table.
- The financial programming covered above also includes amounts received from non-EU countries (Norway) in the form of assigned revenues.
Budget performance – implementation
Cumulative implementation rate at the end of 2023 (million EUR):
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Voted budget implementation (million EUR)(*):
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- The industry from 26 EU Member States and Norway showed significant interest in participating in the first EDF calls in 2022. A total of 134 proposals were received, covering all 8 calls (relating to the relevant domains – air, ground, naval combat, cyber, space, etc.) and 33 topics published. The total budget allocated to these calls is EUR 832 million. A total of 37 grant agreements were signed in December 2023. The European Commission also signed contribution agreements to delegate the implementation, under indirect management, of two research projects and one development project to the European Defence Agency (1) and one development project to the Organisation for Joint Armament Co-operation (2).
- The third annual EDF work programme (for 2023) was adopted on 30 March 2023. On 7 June 2023, the Commission adopted the 2023 Financing Decision part 1, which complemented the 2022 budget envelope of the EDF with EUR 255.5 million stemming from 2023 appropriations. In line with the clear ambition and political will by Member States in the EDF Programme Committee, the 2023 budgetary top-up (which was EUR 390 million from the 2024 budget) allowed the launch of several flagship projects to support defence capability and technology development in agreed priority areas, while ensuring coverage of a broad range of topics of interest to Member States. The third annual EDF work programme allocates an additional EUR 1.2 billion to support collaborative research and development projects and innovation in Europe's defence sector.
- The 2023 EDF work programme was organised around seven calls for proposals addressing 16 categories of action (relating to the relevant domains – air, ground, naval combat, cyber, space, etc.) consisting of 34 topics with a total budget of EUR 1.2 billion. The calls for proposals were published on 30 March 2023 and opened for submission in June 2023. In response, the European defence industry submitted a record number (236) of proposals for joint defence research and development projects, reflecting all the thematic priorities identified by the Member States with the support of the Commission. Entities from all 27 Member States and Norway participate in the proposals. It is expected that grant agreements will be signed by the end of 2024.
(1) EC2 (European command and control system), Tiresyas (technology innovation for radar European system applications), Armetiss (smart multifunction textiles for integrated soldier systems).
(2) E-Nacsos (EU naval collaborative surveillance operational standard).
Contribution to horizontal priorities
Green budgeting
Contribution to green budgeting priorities (million EUR):
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The overall budget for EDF implementation was not intended to target climate and biodiversity mainstreaming and clean air directly. However, it may have some indirect positive climate effects through its various projects. Capability development projects and defence research take into consideration the importance of sustainability in defence activities.
Gender
Contribution to gender equality (million EUR) (*):
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| Gender disaggregated information: |
|---|
| DG Defence Industry and Space does not collect gender disaggregated information regarding the EDF’s implementation. |
- Efforts are continuously made to seize all relevant opportunities identified by the equality coordinator and other staff of DG Defence Industry and Space. For example, the directorate-general organises side events and workshops or includes gender equality aspects in communication activities and events.
Digital
Contribution to digital transition (million EUR):
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The EDF mainly supports digital transformation through calls related to the following work programme categories of action: cyber and digital transformation.
Budget performance – outcomes
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Link to file with complete set of EU core performance indicators
- The EDF fosters the competitiveness and innovation capacity of the European defence technological and industrial base by supporting collaborative research and development action. The Russian war of aggression against Ukraine has clearly shown the pertinence of strengthening this base and the EU’s defence capabilities, where the EDF plays an important role. In terms of the direct operational impact of the war on the EDF programme, it should be noted that the EDF supports defence research and capability development projects that take years to reach the deployment stage; however, the innovation activities may lead to an earlier uptake. In addition, the ongoing projects (the first set of projects started very recently, in December 2022/January 2023 under the 2021 EDF work programme), along with the 2022 work programme, were programmed before the start of the war.
- The EDF also focused on supporting small and medium-sized enterprise. In 2022, 39% of the beneficiaries in projects funded by the EDF were small and medium-sized enterprises. The regulation promoted this involvement by awarding an increase in the EU funding rate to projects that invest in cross-border cooperation with small and medium-sized enterprises.
- The number of proposals submitted for the 2023 calls showed an increase of 76% in comparison with 2022, which demonstrates the strong and constantly growing interest of EU defence industry and research organisations to cooperate across borders and jointly contribute to the EU strategic defence capability development. It shows their commitment to integrate the European defence and technological industrial basis.
- The EDF has maintained good practices to support performance that were introduced by its precursor programmes, the EDIDP and the preparatory action on defence research. These include close cooperation with Member States in drafting the calls for proposals and work programmes, awarding a bonus to permanent structured cooperation projects to improve the coherence of the EU’s defence initiatives, and awarding any increase in the EU funding rate to projects investing in cross-border cooperation with small and medium-sized enterprises. In addition, the EDF supports the participation of small and medium-sized enterprises every year through two open calls specifically target such entities. Furthermore, small, and medium-sized enterprises are offered business coaching. Moreover, the European Commission, within the framework of the EDF, established the national focal points framework to further support the EDF applicants in preparing their applications and launched the European Union defence innovation scheme, which aims to build a stronger defence innovation ecosystem throughout the EU. For 2023, the calls in support of defence innovation under the scheme totalled EUR 224 million. As an example, spin-in calls, focusing on migrating innovation from the civil sector to the defence sector, proved highly successful, and Commission services and the European Defence Agency are cooperating to continue systematically scanning results from civil programmes to assess defence potential. In December 2023, DG Defence Industry and Space officially signed and launched the EU defence innovation scheme hackathons. Taking place in May 2024, these defence hackathons aim to develop innovative solutions for the future.
MFF 2014-2020 – European defence industrial development programme and preparatory action on defence research
The EDIDP was adopted in July 2018 for a duration of 2 years. The aim of the programme is to support the competitiveness and the innovative capacity of the defence industry in the EU, specifically in the development of prototypes, by supporting development projects jointly carried out by companies.
The programme helps create a collaborative approach between defence industry players in the Member States. The financial contribution by the EU unlocks development projects that otherwise would not have started due to their sizeable financing needs or the elevated technological risks involved, thus leading to additional collaborative defence development projects.
The preparatory action on defence research for 2017-2019 supports collaborative defence research projects and technological development in Europe by providing grants. The projects under this action are testing mechanisms to prepare, organise and deliver a variety of EU-funded cooperative defence research and technology development activities, aiming to improve the competitiveness and innovation of the EU defence industry and to stimulate cooperation. Calls under the preparatory action on defence research enabled the Commission to test different types of processes, which was one of its objectives and has proven useful for the first EDF annual calls in 2021 and 2022.
Budget implementation
Cumulative implementation rate at the end of 2023 (million EUR):
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- The implementation of the EDIDP is ongoing. During its life span, which ran from 2019 to 2020, the EDIDP committed EUR 500 million, thus achieving a 100% cumulative implementation rate.
- Both of the EDF precursor programmes (the EDIDP and the preparatory action on defence research) were fully implemented during the COVID-19 crisis. The crisis affected the evaluation of the 2020 EDIDP calls. The pandemic’s impact, combined with the complexity of processes, led to the prolongation of several EDIDP administrative processes (e.g. informing applicants of the outcome of the evaluation). To support the defence industry during the pandemic, the pre-financing level of the proposals awarded under the EDIDP’s 2019 calls was increased to up to 90% of the maximum grant, which in turn had an impact on the programme’s rate of payment execution.
- Following the 2020 EDIDP calls for proposals, 63 proposals were received. This marks an increase of more than 50% compared to the 2019 calls, when 40 proposals were received. Grant agreements for 26 high-quality projects were signed before the end of 2021, and will be supported with EUR 158.2 million. These projects are directly managed by Commission services. In addition, the management of two projects that are strategic enablers for the European defence industry was entrusted to the Organisation Conjointe de Coopération en matière d’Armement, with a total budget of almost EUR 133 million, following the conclusion of the contribution agreements in 2020.
- In total, following the 2019 and 2020 EDIDP calls for proposals, 44 grants received funding. The pre‑financing payments for these grants account for almost the total amount of payment appropriations used up to now, i.e. EUR 376 million. This represents a 75% rate of payment execution. Due to the substantial oversubscription (funding could be provided to only 16 out of 40 proposals received in 2019 and 26 out of 63 proposals received in 2020), the total budget allocated to the 2019 and 2020 calls was fully committed.
- The implementation of the preparatory action on defence research is ongoing. In total, 10 calls for proposals were published in 2017, 2018 and 2019. This resulted in the selection of 18 projects. Furthermore, in the 2019 call the Commission launched, for the first time, an open call on future disruptive defence technologies. The objective of the call was to fund cutting-edge and high-risk / high-impact research that could lead to a disruptive impact in a defence context. This resulted in the funding of three promising projects, beginning at the end of 2020 and running for approximately 2 years. The projects aim respectively to set up an experimental demonstrator for novel radar camouflage; to implement a neural network based on spin-based nanodevices for radiofrequency processing; and to use homomorphic encryption to allow the use of confidential data for artificial intelligence technologies.
Performance assessment
- The EDIDP is designed to target the problems of the defence sectors identified in the context of the programme’s ex ante evaluation, namely: (1) the low level of investment in innovative defence programmes; and (2) the fragmentation of the defence industry and limited cooperation between undertakings. Both problems may pose substantial risks for the competitiveness of the EU defence industry in the longer term. The EDIDP work programme was geared towards fostering the competitiveness, efficiency, and innovation capacity of the European defence industry, supporting and leveraging cooperation and ensuring that results from the research phase are better exploited in the following phases of development.
- After comparison of the EDIDP's milestones with the results of the 2019 and 2020 calls, the following initial conclusions can be drawn.
- The EDIDP calls have boosted cooperation between the Member States and their undertakings to a level in excess of the milestones set out. The calls for proposals were structured in close cooperation with the Member States to meet their requirements in terms of defence systems and technologies needed for their defence capabilities. This approach paid off in 2019, leading to larger consortia populated by entities established in more Member States than anticipated. This positive trend continued in 2020, with the consortia comprising some 16 entities from seven Member States.
- The EDIDP contributed to the coherence of the EU's defence initiatives and to advancing the priorities defined at the EU level. 80% of the 2019 budget was allocated to projects with a link to permanent structured cooperation projects, i.e. joint projects initiated by Member States. In 2020, 14 out of the 26 projects supported have a link to permanent structured cooperation, and these projects are funded with a total of EUR 97.7 million. The EDIDP regulation promoted this link by awarding a bonus to such projects to increase the EU funding rate.
- The EDIDP regulation also focused on supporting small and medium-sized enterprises, i.e. the critical part of the European defence industry. In 2019, the target number of small and medium-sized enterprises involved in projects was exceeded by nearly 40%, with 83 such enterprises participating against a milestone of 60. The 2019 EDIDP work programme included a call that was open to consortia composed only of small and medium-sized enterprises, from which 21 enterprises received funding. This trend continued in 2020, with support being provided to 144 small and medium-sized enterprises following the 2020 calls (16 of them in a call that was open to consortia composed only of such enterprises). 35% of the entities in projects funded by EDIDP in 2020 are small and medium-sized enterprises, while 30% of the total funding is dedicated to them. The regulation promoted this involvement by awarding an increase in the EU funding rate for projects that invest in cross-border cooperation with small and medium-sized enterprises.
- Research and development entities maintain a high level of interest for support from the EDIDP. Furthermore, the share of the projects funded that involve prototyping, which is a specifically sensitive phase of project development, exceeded expectations/targets by 6% and 15 % in 2019 and 2020, respectively. This indicates the programme's increasing focus on supporting advanced stages in the development of defence systems or technologies.
- The preparatory action on defence research has contributed significantly to fostering collaborative defence research and technological development in Europe. The core of the preparatory action is a small-scale research programme with competitive calls for proposals defined in close consultation with the Member States.
- Although most of the projects under this action are still ongoing, the following initial conclusions can be drawn.
- Calls attracted applicants that were not previously active in defence research.
- Funded projects included the participation of small and medium size enterprises in 15 consortia.
- The action brought together stakeholders from the private sector (64%), research centres (23%) and academia (7%), with 22% of all applicants in the selected proposals being small or medium-sized enterprises.
- Projects funded under the action cover a broad range of technological readiness levels and address different levels of system integration. The submission of more than 50 proposals following the 2019 open call on disruptive technologies reflects the high level of interest on the part of stakeholders.
Sustainable development goals
Contribution to the sustainable development goals
The EDF indirectly supports and contribute to some SDGs (e. g. gender equality and affordable and clean energy), but the programme was not created directly to deliver on all 17 SDGs. As example, we can present the EDF projects ‘Energy independent and efficient deployable military camps’ and ‘Novel energy and propulsion systems for air dominance’, which will study energy efficiency in aircraft domains, with a focus on energy-efficient propulsion, electrical and thermal systems, and management.
| SDG | Example |
|---|---|
| SDG7 Ensure access to affordable, reliable, sustainable and modern energy for all | Affordable and Clean Energy: The EDF supports research and development projects focused on increasing the energy efficiency of military equipment and facilities, and energy-saving technologies for defence applications. |
| SDG8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all | Decent Work and Economic Growth: The EDF investments in defence research and development stimulates economic growth by creating jobs and fostering innovation in the defence industry across Europe. |
| SDG9 Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation | Industry, Innovation, and Infrastructure: The EDF support projects aimed at fostering innovation in defence technology and infrastructure. This includes research into advanced materials, cybersecurity solutions, autonomous systems, and other cutting-edge technologies relevant to defence applications. By investing in these areas, the fund helps strengthen Europe's industrial base and improve its technological capabilities. |