(*) Key achievements in the table state which period they relate to. Many come from the implementation of the predecessor programmes under the 2014-2020 multiannual financial framework. This is expected and is due to the multiannual life cycle of EU programmes and the projects they finance, where results often follow only after completion of the programmes.
Budget for 2021-2027
(million EUR)
Financial programming | 7 293.0 |
NextGenerationEU |
|
Decommitments made available again (*) | N/A |
Contributions from other countries and entities | 45.8 |
Total budget 2021-2027 | 7 338.8 |
(*) Only Article 15(3) of the financial regulation.
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 in the near past, the development of new high-end defence systems is increasingly beyond the capacity of individual Member States. Moreover, cooperation in the defence sector remains very weak. European collaborative equipment expenditure stands at only 18% of total defence spending for equipment procurement, against an ambition of 35%. Only 7.3% of total defence research and technology development is collaborative, against an ambition of 20%. The European defence industry and markets 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 calls for the 2021 EDF were successfully implemented to provide research and development actions with EU support of EUR 1.170 billion. The second annual EDF work programme (for 2022) was adopted, and eight calls were opened, to which the European defence industry submitted 134 proposals. It is expected that grant agreements will be signed at the end of 2023.
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 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 will 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):
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Total | |
|---|---|---|---|---|---|---|---|---|
| Financial programming | 945.7 | 945.7 | 945.7 | 638.0 | 1 072.2 | 1 246.3 | 1 499.4 | 7 293.0 |
| NextGenerationEU | ||||||||
| Decommitments made available again (*) | N/A | |||||||
| Contributions from other countries and entities | 23.7 | 22.0 | p.m. | p.m. | p.m. | p.m. | p.m. | 45.8 |
| Total | 969.4 | 967.7 | 945.7 | 638.0 | 1 072.2 | 1 246.3 | 1 499.4 | 7 338.8 |
(*) Only Article 15(3) of the financial regulation.
Financial programming:
- EUR 660 million (- 8%)
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
Multiannual cumulative implementation rate at the end of 2022 (million EUR):
| Implementation | 2021-2027 Budget | Implementation rate | |
|---|---|---|---|
| Commitments | 1 937.2 | 7 338.8 | 26.4% |
| Payments | 518.1 | 7.1% |
Annual voted budget implementation (million EUR)(1):
| Commitments | Payments | |||
|---|---|---|---|---|
| Voted budget implementation | Initial voted budget | Voted budget implementation | Initial voted budget | |
| 2021 | 945.7 | 945.7 | 1.3 | 15.6 |
| 2022 | 945.7 | 945.7 | 503.1 | 521.4 |
(1) Voted appropriations (C1) only.
- The industry from 26 EU Member States and Norway showed significant interest in participating in the first EDF calls in 2021. A total of 142 proposals were received, covering all 23 calls (relating to the relevant domains - air, ground, naval combat, cyber, space, etc.) and 37 topics published. The total budget allocated to these calls exceeds EUR 1.2 billion, of which EUR 930.3 million comes from the 2021 budget and EUR 290 million comes from the 2022 budget. A total of 56 grant agreements were signed in December 2022. The European Commission also signed contribution agreements to delegate the implementation, under indirect management, of two research projects to the European Defence Agency (1) and two development projects to the Organisation for Joint Armament Co-operation (2). The value of research and development actions funded by the EDF for 2021 calls is EUR 1.170 billion.
- The second annual EDF work programme (for 2022) was adopted on 25 May 2022. On 7 June, 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 allowed the launch of a number of 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 total budget allocated for the implementation of the 2022 EDF annual work programme is EUR 924 million in support of defence research and development projects.
- The 2022 EDF work programme was organised around eight calls for proposals addressing 16 categories of action (relating to the relevant domains – air, ground, naval combat, cyber, space, etc.) consisting of 33 topics. The calls for proposals were opened in June 2022. In response, the European defence industry submitted 134 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 26 Member States and Norway participate in the proposals. It is expected that grant agreements will be signed in the end of 2023.
(1) The Artuto (advanced radar technology in Europe) project will provide a solution to fulfil future operational needs for advanced radar technologies in Europe, and Ecoballife (research in eco-designed ballistic systems for durable lightweight protections against current and new threats in platform and personal applications) will research eco-designed ballistic systems for durable lightweight protection against current and new threats in platform and personal applications.
(2) The EPC (European patrol corvette) project will focus on the initial phase of a European innovative, modular, flexible, interoperable, green, multirole vessel, enabling European navies to face the challenges of the 21st century, and EU-HYDEF (European hypersonic defence interceptor) will define the concept for a European interceptor to achieve the highest manoeuvrability and capability to respond to high-velocity threats.
Contribution to horizontal priorities
Green budgeting
Contribution to green budgeting priorities (million EUR):
| Implementation | Estimates | Total contribution | % of the 2021–2027 budget | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | |||
| Climate mainstreaming | 41.7 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 41.7 | 1% |
| Biodiversity mainstreaming | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0% |
| Clean air | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0% |
Gender
Contribution to gender equality (million EUR) (*):
| Gender score | 2021 | 2022 | Total |
|---|---|---|---|
| 0 |
945.7 |
0.0 |
945.7 |
| 0* |
0.0 |
940.4 |
940.4 |
(*) Based on the applied gender contribution methodology, the following scores are attributed at the most granular level of intervention possible:
- 2: interventions the principal objective of which is to improve gender equality;
- 1: interventions that have gender equality as an important and deliberate objective but not as the main reason for the intervention;
- 0: non-targeted interventions (interventions that are expected to have no significant bearing on gender equality);
- 0*: score to be assigned to interventions with a likely but not yet clear positive impact on gender equality.
- On equality, diversity and inclusion, the overall voted budget for implementation in 2022 under the EDF was not directly targeted at gender equality initiatives. Nevertheless, indirect contributions supporting the gradual raising of awareness about this horizontal Commission priority are continually being made as opportunities arise and when identified by the directorate-general’s equality coordinator and other staff of the directorate-general. For instance, gender equality aspects receive special mentions in communication activities and at events on various matters relating to the EDF.
Digital
Contribution to digital transition (million EUR):
| 2021 | 2022 | Total | % of the total 2021-2027 implementation | |
|---|---|---|---|---|
| Digital contribution | 0.0 | 0.0 | 0.0 | 0% |
Budget performance – outcomes
| Baseline | Progress (*) | Target | Results | Assessment | |
|---|---|---|---|---|---|
| Collaborative research: funded actions | 0 | NA | NA | 32 | NA |
| Collaborative research: share of recipients that did not carry out research activities with defence applications before the entry into force of the fund | 0 | NA | NA | 30% | NA |
| Collaborative capability development: funded actions that address the capability shortfalls identified in the capability development plan | 0 | NA | NA | 82 | NA |
| Job creation/support: defence research and development employees supported in funded actions | 0 | NA | NA | 4600 | No results |
(*) Results achieved by the end of 2022.
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 deployment stage. This concerns the next generations of defence platforms and capabilities, and hence EDF-supported activities have – at this early stage – a limited direct immediate impact on existing systems and capabilities. 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, in line with its objectives, focuses on supporting initiatives that are conducive to developing disruptive technologies for defence. The proportion of the budget for EDF 2021 calls dedicated to disruptive technologies was 5.5%, exceeding the expected milestone for 2022 (4%).
- The EDF also focused on supporting small and medium-sized enterprises, i.e. the critical part of the European defence industry. In 2021, 43% 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 for projects that invest in cross-border cooperation with small and medium-sized enterprises.
- 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, a new feature introduced by the EDF to support the participation of small and medium-sized enterprises is that, every year, two open calls specifically target such enterprises. Furthermore, small and medium-sized enterprises will be 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 defence innovation scheme, which aims to build a stronger defence innovation ecosystem throughout the EU.
- On equality, diversity and inclusion, DG Defence Industry and Space also runs a broader exercise to map the status quo of EU defence, aeronautics and space. The mapping exercise (funded under the EU space programme in 2021) took place in 2022 through an industry-wide survey on equality, diversity and inclusion in the EU. The main findings are as follows.
- Almost half of employees (45%) do not believe that their companies treat everyone equally, and a similar percentage of employees (47.2%) do not think that all employees enjoy the same opportunities in the workplace.
- There is a lack of diversity among employees, primarily in terms of sexual orientation, religious background and disabilities. As far as management is concerned, the main issues affecting the level of diversity relate to age, gender, and ethnic and cultural background.
- The findings of the survey did not support the idea of inclusivity, as more than half of employees (53%) have explicitly expressed the idea that the defence, aeronautics and space sectors are not welcoming.
- The full study is available online (1).
- The study proposes an action plan to increase awareness of equality, diversity and inclusion best practices and their benefits in the defence, aeronautics and space sectors. DG Defence Industry and Space is currently working to implement actions to increase awareness of equality, diversity and inclusion, for example organising side events / workshops, special mentions of gender equality aspects in communication activities and promoting the EU Diversity Charters platform in the sector.
- This project also contributes to sustainable development goal (SDG) 5, which aims to achieve gender equality and empower all women and girls, and to the Commission’s high-level objective of fostering a union of equality, complementing initiatives in place to support all people in all their diversity to pursue any chosen path in life, free from discrimination and other unjust biases.
(1) Equality, diversity and inclusion in the aeronautics, defence and space industries (europa.eu).
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.
Budget implementation
Cumulative implementation rate at the end of 2022 (million EUR):
| Implementation | 2014-2020 Budget | Implementation rate | |
|---|---|---|---|
| Commitments | 500.0 | 500.0 | 100% |
| Payments | 386.0 | 77.19% |
- 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.