European defence industry: Commission welcomes political agreement on the support to ramp up the production capacities of ammunition and missiles

This article is brought to you in association with the European Commission.

The Commission welcomes the political agreement reached between the European Parliament and the Council of the European Union on the Regulation on supporting ammunition production (ASAP) with a budget of €500 million.

ASAP will ensure that the EU can efficiently ramp up its production capacity of ammunitions and missiles. Thanks to ASAP the Union’s defence industry will be able to produce more and faster as the proposed Regulation will support the industrial reinforcement throughout the supply chains of ammunition and missiles in the EU. It is a direct response to the March European Council’s call to urgently deliver ammunition, and if requested missiles, to Ukraine and to help Member States refill their stocks by introducing targeted measures.

Financial support up to €500 million will be provided in the form of grants to various types of actions, contributing to the efforts of the European defence industry to increase their production capacities and tackle identified bottlenecks. For instance, ASAP could support the extension or modernisation of existing lines, creation of new lines, plans to repurpose old ammunition, securing value chains and addressing skills gaps.

The regulation also foresees that up to €50 million will serve as a guarantee for the creation of a ‘Ramp-Up Fund’, delivering financial support under the form of loans, facilitating access to finance for the European defence industry involved in the production of ammunition and missiles.

ASAP will complement the recently agreed initiative called EDIRPA, the European defence industry through common procurement, which will incentivise Member States to commonly procure the most critical and urgent defence products in light of Russia’s unprovoked invasion of Ukraine. 

Next Steps

The political agreement reached by the European Parliament and the Council is now subject to formal approval by the European Parliament and the Council. The Commission will implement ASAP swiftly. The Commission will rapidly prepare a work programme assisted by Member States in the Programme Committee.

Background

In response to Russia’s unjustified invasion of Ukraine, on 19 July 2022 Commission presented the European Defence Industry Reinforcement through common Procurement Regulation (EDIRPA), aiming at reinforcing defence industrial capabilities by supporting Member States cooperation on common procurement of the most urgent and critical defence products.

The situation in Ukraine has increased the specific need for ammunition and missiles. These pressing needs have been recognised by the Council which agreed on 20 March 2023 on a three-track approach. According to Track 1 of this plan, Member States have been invited to immediately transfer ammunition from their stocks to Ukraine.  Member States will in parallel procure jointly 1 million ammunition rounds as part of Track 2. To ensure Member States that they will be able to get what they need, the European Union’s industry needs to produce more and faster, through Track 3, which is accelerated by ASAP.

On 3 May 2023, the Commission tabled the ASAP Regulation proposal, aiming to support the ‘supply’ side of the market directly with a focus on increasing the production of ammunition and missiles.