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REPORT (COM(2025)0188 – C100070/2025 – 2025/0103(COD))

On the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

A-10-2025-0172

Committee on Industry, Research and Energy · Rapporteur: Rihards Kols

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Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of a Commission proposal to amend six EU programmes so the EU budget can fund defence-related investments under the ReArm Europe Plan. It adds a fourth strategic sector for defence and security technologies to the Strategic Technologies for Europe Platform (STEP) and opens Horizon Europe, the Digital Europe Programme, the European Defence Fund and the Connecting Europe Facility to dual-use and defence projects. It sets participation restrictions for security reasons, funding rates for defence actions, and rules for transferring cohesion funds to the European Defence Fund and the Connecting Europe Facility. It allows Member States to reallocate Recovery and Resilience Facility resources to defence industrial instruments and requires transparency on beneficiaries and ownership. The regulation would enter into force the day after publication in the Official Journal.

Committee position. The Committee on Industry, Research and Energy adopts Parliament's position at first reading with amendments to the Commission proposal, opening existing Union programmes to defence-related and dual-use investments and adding safeguards on participation, transparency and funding conditions.

Key points

  1. A fourth STEP strategic sector is created for defence and security technologies, including those enhancing societal resilience, with the Commission to issue guidance on their interpretation.
  2. Horizon Europe's European Innovation Council (EIC) Accelerator may support civil applications with potential dual-use, provided they are primarily designed for civil use, as an exception to the civil-only focus.
  3. Repayments, revenues and unused amounts from the EIC pilot under Horizon 2020 are to be treated as internal assigned revenues and reinvested in the EIC Fund for dual-use and defence applications.
  4. The European Defence Fund is opened to Ukraine and European Free Trade Association members of the European Economic Area, and its procedures for disruptive defence technologies are shortened and simplified.
  5. Member States may transfer shared-management resources to the European Defence Fund, use them for eligible actions up to 100% of eligible costs, and have uncommitted resources returned by 30 September 2027.
  6. The Digital Europe Programme is to support dual-use projects, services and competences, and deploy AI Factories and AI Gigafactories for very large AI models.
  7. For duly justified security reasons, calls may be restricted to entities established in and controlled by Member States, Ukraine or European Free Trade Association members of the European Economic Area.
  8. The Connecting Europe Facility is extended to digital capacities such as cloud, AI and AI Gigafactories, and to dual-use transport infrastructure including dual-use fuel infrastructure.
  9. For military mobility works, co-financing may reach 100%, pre-financing at least 30%, and actions must be on the four EU Priority Military Mobility Corridors, prioritising hot spots and cross-border sections.
  10. Member States are encouraged to reallocate Recovery and Resilience Facility resources to their contributions to Union defence industrial instruments, for the benefit of the Member State concerned.
  11. The Commission is to ensure transparent allocation of defence-related resources, including clear identification of beneficiaries and ownership structures while protecting confidential information.
  12. The regulation is to enter into force on the day following its publication in the Official Journal of the European Union.

Who is affected

  • Defence and dual-use technology companies, including SMEs, start-ups and small mid-caps, which may receive support under the amended programmes.
  • Ukraine, whose defence industry may integrate into Union programmes and whose entities get preferential funding rates.
  • Member States, which may transfer cohesion funds and reallocate Recovery and Resilience Facility resources to defence instruments.
  • Entities in associated countries and third-country-controlled entities, which may be excluded from security-sensitive calls.

Figures and deadlines

  • EUR 70 billion: estimated initial investment needed to adapt transport and logistics infrastructure for rapid troop movement.
  • 30%: pre-financing of programmed amounts for defence or dual-use infrastructure under the ERDF and Cohesion Fund.
  • 100%: maximum Union financing rate for dual-use transport infrastructure projects.
  • 30 September 2027: deadline for uncommitted transferred resources to be returned to source programmes.
  • 20% of eligible costs: maximum European Defence Fund support for certain activities, rising to 40% for SME-only consortia.
  • 80% of eligible costs: maximum support for certain activities, up to 100% for SME-only consortia.
  • 10 percentage points: additional funding rate where at least 15% of eligible costs go to an entity established in Ukraine.
  • EUR 210 million: estimated unused amount and potential returns from the EIC Fund pilot phase under Horizon 2020.

Legal basis: Articles 114, 164, 172, 173, Article 175, third paragraph, Articles 176, 177, 178, 182, 183, 188 and 192(1) of the Treaty on the Functioning of the European Union.