Commission supports the ramp-up of European ammunition and missiles production with first calls for proposals

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

Today, the Commission intensifies its support to the European defence industry with the adoption of the Work Programme foreseen the Regulation on supporting Ammunition Production (ASAP) for 2023-2025. ASAP will allocate €500 million to the support of investment projects worth up to €1.4 billion, thereby incentivising the ramp-up of ammunition and missiles production in the European Union.

For the first time ever, the Commission is publishing calls for proposals to select and fund projects improving European production capacities of defence products and supporting the resilience of the related supply chains.

ASAP will address bottlenecks throughout the supply chains of ammunition and missiles in the EU and Norway, by supporting industry to rapidly adjust to new market trends and reduce dependencies.

Incentivising investments to address supply chains needs

The ASAP Work Programme targets key bottlenecks identified in the ammunition supply chains: explosives, propelling powder, and shells, and supports the missiles production ramp-up. It also addresses the obsolescence, testing, or reconditioning certification of relevant defence products.

Accordingly, the ASAP Work Programme is structured along 5 calls for proposals with the following indicatives budgets:

• Explosives, with a budget of €190 million;
• Powder, with a budget of €144 million;
• Shells, with a budget of €90 million;
• Missiles with a budget of €40 million;
• Testing and Reconditioning certification, with a budget of €4,35 million.

The ASAP Work Programme will support projects aimed at improving the production capacities under different calls, through the implementation of various types of actions. For instance, ASAP will support extension or modernisation of existing lines, creation of new lines, plans to repurpose old ammunition, securing value chains, and addressing skills gaps.

Different topics under specific calls, such as on Explosives and Powder, will address different but complementary needs of the European ammunition supply chain. The objective is twofold: on the one hand incentivising investment in rapid adjustments, in order to increase the responsiveness of the supply chains, and on the other increasing the resilience and robustness of the supply chains, notably through cross-border cooperation.

To encourage quick and decisive investments in response to the Russian aggression of Ukraine, ASAP foresees a retroactive clause. The ASAP Work Programme therefore allows co-financing of industrial production ramp-up projects that started after 20 March 2023 (i.e. date of the Council agreement on the so-called ‘three-track approach’).

The ASAP Work Programme also foresees the creation of a ‘Ramp-Up Fund’, to facilitate the access to finance of defence manufacturers in the fields of ammunition and missiles, with a budget of €30 million. Its implementation will make it easier for companies across these value chain to access both public and private financing and speed up investments needed to increase manufacturing capacities.

The calls are available from today, with a deadline for submission on 13 December 2023 17.00 CEST, at the following links:

• Explosives: Topic 1 ASAP-2023-LS-XPL-STEP and Topic 2 ASAP-2023-LS-XPL-FAST
• Powder: Topic 1 ASAP-2023-LS-POW-STEP and Topic 2 ASAP-2023-LS-POW-FAST
• Shells: ASAP-2023-LS-SHL
• Missiles: ASAP-2023-LS-MIS
• Testing & Reconditioning certification: ASAP-2023-LS-TRC

Background

ASAP is a direct response to the Council’s call to urgently deliver ammunition, and missiles if requested, to Ukraine and to help Member States refill their stocks by introducing targeted measures.

Aimed at enabling ramp-up of ammunition production capacity across Europe, ASAP constitutes the track 3 (industrial part) of the so-called three-track approach of the ammunition plan agreed by the Council.

The three tracks are closely interlinked. In order for Member States to be able to use their ammunition in stock to support Ukraine (track 1) and subsequently replenish them with new orders (track 2), there needs to be enough confidence that the EU artillery ammunition and missiles producers can timely match the demand (track 3).

The structure of the ASAP Work Programme has been informed by the results of a mapping exercise of the European industrial production of artillery ammunition. Information was gathered through:

• Research and analysis within the Defence Joint Procurement Task Force;
• Information collected during Commissioner Breton’s visits to key manufacturers in EU Member States;
• Bilateral exchanges with industrial stakeholders.

In response to the Council’s call, the Commission proposed ASAP to European Parliament and the Council on 3 May 2023. The legislators adopted the Regulation in a record time on 20 July 2023. To keep the momentum and urgently deliver the expected impacts, the Commission set an ambitious timeline also for the adoption of the ASAP work programme