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8.3.1Introduction to the European Defence Fund

One of the three pillars of the European Defence Action Plan from 2016 was the establishment of a European Defence Fund (EDF) [1] by the European Commission. This created another major research and innovation program alongside Horizon Europe. The EDF in its current form was preceded by two programs during a test period, namely the 'Preparatory Action on Defence Research’ (PADR) and the 'European Defence Industrial Development Programme’ (EDIDP), with the involvement of the European Defence Agency:

  • PADR had a duration of 3 years (2017-2019) and funded 18 projects for a total budget of 90 million euro[2]. The objectives were (1) demonstrate and assess added-value of EU supported defence R&T; (2) Foster cooperation between member states and between EU defence industries, RTOs and academia and (3) prepare the research window of the EDF from 2021 onwards.
  • EDIDP had a duration of 2 years (2019-2020) with a budget of 500 million euro. The objectives were (1) to foster cooperation between undertakings and member states, in the development of defence products or technologies; (2) supporting the competitiveness of the European Defence industry on the internal market and the global marketplace; (3) to support and leverage cross-border cooperation between undertakings, including small- and medium-sized enterprises and middle capitalization companies throughout the union and (4) to foster better exploitation of the results of defence research and prepare the development window of the EDF from 2021 onwards.

After this test period, the European Defence Fund scaled up to nearly 8 billion euros for the period 2021-2027, managed by the new DG DEFIS. The EDF provides funding in the form of grants and financial support to consortia, with special attention to supporting disruptive defence technologies. The program's setup ensures participation from defence companies of all sizes, including small and medium-sized enterprises and mid-caps, as well as universities and research and innovation institutions across the EU. This strengthens and stimulates the opening of supply chains and enhances the competitiveness of the European defence industry. The program also aims to contribute to the delivery of advanced and interoperable defence technologies and equipment, in line with the needs of the member states.

[1] https://defence-industry-space.ec.europa.eu/eu-defence-industry/european-defence-fund-edf_en

[2] And had a 2 million euro Norway contribution

 

EDF budget

The EDF consists of a research component and a capability component. For the period 2021-2027, a budget of 7,95 billion euros has been allocated, of which 2,7 billion euros for the financing of joint defence research and 5,3 billion euros for the financing of joint capability development projects, supplementing national contributions (because co-financing from the member state is required to be able to participate).

Figure 1: European Defence Fund – Research and Capability overview

Source: European Defence Fund | EU Funding Overview

 

EDF topics

The EDF is implemented through annual work programs structured according to 17 thematic and horizontal categories of actions. These categories are designed to cover all military areas and key technologies, namely[1]:

  • Medical response, CBRN & human factors
  • Information superiority
  • Sensors
  • Cyber
  • Space
  • Digital transformation
  • Energy resilience & environmental transition
  • Materials and components
  • Air combat
  • Air and missile defence
  • Ground combat
  • Force protection and mobility
  • Naval combat
  • Underwater warfare
  • Simulation and training
  • Disruptive technologies (horizontal categories)
  • Innovative defence technologies – SMEs  (Horizontal categories)

[1] European Defence Fund | EU Funding Overview


EDF modalities and funding

The extent to which an action is funded by the EDF depends, among other things, on the composition of the activities. Both companies and knowledge institutions can participate in the research component, and the EDF can support 100% of the total eligible costs. EDF support for a development action can vary from 20% to 100% of the total eligible costs, depending on the activities involved (e.g., design, prototyping, testing, qualification, certification) and a bonus system (involvement of SMEs and mid-caps and linkage with a Permanent Structured Cooperation (PESCO) project). This capability component, which supports the higher TRLs (Technology Readiness Levels), is mainly aimed at companies. Co-financing from the member state is required to participate. For these actions, it must be demonstrated that the remaining costs are also covered.