Commission proposes five joint defence projects to strengthen Europe’s industrial capabilities

July 6, 2026 by The Sting's Team Leave a Comment

The Commission today presented the Automotive Package to support the sector's efforts in the transition to clean mobility. It sets an ambitious yet pragmatic policy framework to ensure 2050 climate neutrality and strategic independence while providing more flexibility to manufacturers. It also responds to calls by EU industry to simplify rules. The automotive sector has been key to Europe's industrial strength for decades, sustaining millions of jobs and driving technological innovation. As the world is changing, the car industry is transforming through new technologies and actors. Today's package maintains a strong market signal for zero-emission vehicles (ZEV) while giving the industry more flexibility to achieve CO2 targets, and supports vehicles and batteries made in the European Union. The corporate vehicles initiative will support the uptake of zero- and low-emission vehicles. The automotive omnibus enhances competitiveness by saving costs, expected to be approximately €706 million per year, and cutting red tape, while providing greater investment certainty. Commission President von der Leyen said: “Innovation. Clean mobility. Competitiveness. This year, these were top priorities in our intense dialogues with automotive sector, civil society organisations and stakeholders. And today, we are addressing them all together. As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.” Staying the course towards clean mobility with pragmatism The Commission presents a package that addresses both supply and demand of the automotive sector's transition: on the supply side, it presents a review of the existing CO2 emission standards for cars and vans and a targeted amendment to those for heavy-duty vehicles (HDVs). On the demand side, it proposes an initiative to decarbonise corporate vehicles with binding national targets for zero- and low-emission vehicles. The CO2 standards now provide further flexibilities to support the industry and enhance technological neutrality, while providing predictability to manufacturers and maintaining clear market signal towards electrification. From 2035 onwards, carmakers will need to comply with a 90% tailpipe emissions reduction target, while the remaining 10% emissions will need to be compensated through the use of low-carbon steel Made in the Union, or from e-fuels and biofuels. This will allow for plug-in hybrids (PHEV), range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric (EVs) and hydrogen vehicles. Prior to 2035, car manufacturers will be able to benefit from “super credits” for small affordable electric cars made in the European Union. This will incentivise the deployment on the market of more small EV models. For the 2030 target for cars and vans, additional flexibility is introduced by allowing “banking & borrowing” for 2030-2032. An additional flexibility is granted for the vans segment, where the electric vehicle uptake has been structurally more difficult, with a reduction of the 2030 CO2 vans target from 50% to 40%. The Commission is also proposing a targeted amendment to the CO2 emission standards for heavy-duty vehicles with a flexibility easing the compliance with the 2030 targets. Regarding corporate vehicles, mandatory targets are set at the Member State level to support the zero- and low-emission vehicle uptake by large companies. Having more zero- and low-emission vehicles on the market, both first- and second-hand markets – will benefit all customers. As companies' cars cover higher yearly mileages, it also means more emission reductions. It will also make zero- or low- emissions and “Made in the EU” a pre-requisite for vehicles benefitting from public financial support. Strengthening Europe's own battery industry With €1.8 billion, the Battery Booster will accelerate the development of a fully EU-made battery value chain. As part of the Battery Booster, €1.5 billion will support European battery cell producers through interest-free loans. Additional targeted policy measures will support investments, create a European battery value chain and foster innovation and coordination across Member States. These measures will enhance the cost competitiveness of the sector, secure upstream supply chains and support sustainable and resilient production in the EU, contributing to the derisking from dominant global market players. Less red tape and stronger enabling conditions for the transition The Automotive Omnibus will ease administrative burden and cut costs for European manufacturers, boosting their global competitiveness, and freeing up resources for decarbonisation. Businesses are expected to save approximately €706 million per year, bringing the administrative savings thanks to all omnibuses and simplification initiatives the Commission has presented so far to around €14.3 billion per year. Among other things, it proposes to reduce the number of secondary legislation that will be adopted in the upcoming years and to streamline testing for new passenger vans and trucks. This will reduce costs while maintaining highest environmental and safety standards. The roll-out of electric vans in domestic transport is supported by measures that place them on an equal footing with internal combustion vans regarding drivers' rest times and rules. The Omnibus also introduces a new vehicle category under the Small Affordable Cars initiative, covering electric vehicles up to 4.2 meters in length. This will enable Member States and local authorities to develop targeted incentives, stimulating demand for small EVs made in the EU. The Commission is also updating and harmonising car labelling rules, for customers to have complete information about the cars' emissions when making purchases. Background Today's proposals build on the Automotive Action Plan, and input from industry and key stakeholders gathered during the Strategic Dialogue under President von der Leyen's leadership since January 2025. In January 2025, President von der Leyen launched a Strategic Dialogue on the Future of the Automotive Industry, bringing together industry representatives, social partners, Member States, regions and civil society. Three Dialogue meetings have taken place to date, providing a platform to discuss the challenges and opportunities the sector faces. For more information Questions and answers Factsheet - Taking action for a clean and competitive European automotive sector Factsheet – Revision of the CO2 standards and Corportate vehicles Proposal Automotive Package – webpage (all proposals will be available) Automotive Action Plan – webpage Clean Industrial Deal Net-Zero Industry Act — (Credit: Unsplash)

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

Today, the European Commission proposed five new large-scale projects, known as the European Defence Projects of Common Interest (EDPCIs), to help EU countries strengthen their defence capabilities by developing key military systems together.

The industrial projects focus on five priority areas: drones and counter-drone systems; maritime and seabed defence; space; air and missile defence; as well as strengthening security along the EU’s Eastern Flank. They come in response to a Commission call for expression of interest to Member States to submit project proposals for possible EDPCIs.

Under the €1.5 billion European Defence Industry Programme (EDIP), the Commission has allocated €325 million to support the establishment and deployment of the EDPCIs, as set out in the work programme published on 30 March 2026.

The new projects provide a framework for EU countries to work together on major defence initiatives that are too large or too complex for individual countries to develop on their own. By supporting long-term cooperation, they aim to strengthen Europe’s defence industry and improve the EU’s ability to respond to shared security challenges, in line with NATO capability priorities.

On average, 18 Member States participate in each project and Ukraine participates in four of the five projects. The Commission is expected to take part in the EDPCIs, provide financial support and continue supporting Member States coordinate their implementation. It will also monitor progress against agreed milestones to support the timely delivery of the EDPCIs projects.

Next steps

The Council will now discuss on the formal establishment of the EDPCIs, identifying their objectives and characteristics, the participating countries, and the estimated investment expected to be generated by the EDPCI.

After the Council adopts of the list of identified EDPCIs, those will become eligible to receive EU funding through the European Defence Industry Programme (EDIP) in accordance with a dedicated procedure. Their funding will enable the projects’ initial deployment and lay the foundation for possible further funding via the upcoming European Competitiveness Fund.

Background

The EDIP Regulation was adopted on 16 December 2025. This instrument aims to strengthen and modernise Europe’s defence industry, secure the availability of cutting-edge technology, ramp-up production capacity, support common procurement and also resilience via that steady supply of military equipment to the armed forces of the Member States and the reinforcement of the supply chains.

The Regulation introduces the establishment of EDPCIs as future ambitious collaborative industrial projects aimed to benefit a broader part of the EU and open also to Norway and Ukraine.

For more information

Proposal for a Council Implementing Decision on the establishment of European Projects of Common Interest

Factsheet on Drone and Counter Drone European Resolve

Factsheet on Integrated Maritime and Seabed Defence

Factsheet on Space

Factsheet on EU Federated Integrated Air and Missile Defence including Early Warning

Factsheet on Eastern Flank Watch

European Defence Industry Programme (EDIP)

Factsheet: European Defence – Protect What Matters

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