Sittings · Document

REPORT (COM(2025)0822 – C100121/2025 – 2025/0176(COD)) 2025-12-19

On the proposal for a regulation of the European Parliament and of the Council amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence investments and conditions for defence industry

Committee on Security and Defence Committee on the Environment, Climate and Food Safety Committee on Industry, Research and Energy · Rapporteur: Sven Mikser, Antonio Decaro, Aura Salla

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Parliament's amended version of the Commission proposal amending five EU regulations on chemicals and the European Defence Fund (EDF) for defence readiness. It broadens national defence exemptions from the REACH, CLP and Biocidal Products Regulations, and eases reporting under the Persistent Organic Pollutants Regulation. It amends the EDF Regulation to allow testing in Ukraine, multi-annual work programmes, more flexible indirect management and direct awards, simplified award criteria, and higher funding rates for small and medium-sized enterprises (SMEs). Exemptions must be necessary and proportionate, keep a high level of health and environmental protection, and be reviewed regularly. Some EDF provisions apply retroactively from 1 January 2025.

Committee position. The committees propose to adopt Parliament's position at first reading, amending the Commission proposal to broaden defence exemptions from chemicals rules and to simplify and flexibilise the European Defence Fund.

Key points

  1. Member States may exempt substances, mixtures or articles from the REACH Regulation where necessary in the interests of defence.
  2. Where substances are used for both defence and non-defence purposes, the exemption applies only to defence uses.
  3. Where defence and non-defence production share a technically non-separable line, Member States may extend the exemption to the entire output, with technical justification.
  4. The extension does not apply to substances classified as carcinogenic category 1A or 1B, or toxic for reproduction category 1A, and may be time-limited and reviewed.
  5. The Commission shall assess the implementation of the exemption provisions within five years and report to Parliament and the Council.
  6. Where a non-defence production line is temporarily repurposed for defence only, the exemption applies for as long as the line is repurposed, within the period and scope notified.
  7. The Commission may develop guidelines on the practical implementation of the exemptions, in consultation with Member States and stakeholders.
  8. Member States may exempt substances, mixtures and articles from the CLP Regulation and biocidal products from the Biocidal Products Regulation where necessary in the interests of defence.
  9. Member States may exempt themselves from reporting under the Persistent Organic Pollutants Regulation to protect sensitive defence information, without undermining Convention reporting obligations.
  10. The EDF may fund testing activities in Ukraine, and the Fund is open to participation by EFTA/EEA members and Ukraine.
  11. The EDF may be implemented through annual or multi-annual work programmes, and the Commission may use indirect management more flexibly and make direct awards in exceptional circumstances.
  12. Award criteria are simplified, and funding rates may increase by 10 percentage points for PESCO or SEAP projects and by amounts linked to SME and cross-border SME participation.

Who is affected

  • Defence industry, including small and medium-sized enterprises (SMEs) and small mid-caps, which gain easier access to EDF funding and reduced administrative burdens.
  • Member States, which may grant broader defence exemptions from chemicals rules and must ensure safeguards and monitoring.
  • Workers handling exempted substances, including military personnel and contractors, who should receive adequate protective measures.
  • Ukraine, which may host EDF-funded testing activities and participate in the Fund.

Figures and deadlines

  • Support from the Fund shall not exceed 20 % of eligible costs for activities referred to in Article 10(3), point (e).
  • Funding rate may increase by an additional 10 percentage points for PESCO or SEAP projects.
  • Funding rate may increase where at least 10 % of total eligible costs are allocated to SMEs.
  • Funding rate may increase by up to an additional 5 percentage points based on SME cost share.
  • Funding rate may increase by twice the percentage of costs allocated to cross-border SMEs.
  • Commission shall assess the exemption provisions within five years from the date of application.
  • Notification required prior to transfer of ownership to a non-associated third country within 3 years after final payment.
  • Article 9(2) second subparagraph and Article 13 shall apply from 1 January 2025.

Legal basis: Article 114, Article 173(3), Article 182(4), Article 183, Article 188, second paragraph, and Article 192(1) of the Treaty on the Functioning of the European Union.

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