11-12-2025 Article

New EU Initiative to Boost Defense Investments – Opportunities for the Aerospace, Defense & SpaceTech Industry

On 5 November 2025, the Council of the European Union and the European Parliament reached a provisional agreement on a new framework to enable faster, more flexible and better coordinated investments in European defense.

The official press release can be found here: Council of the EU – Defence Investments Agreement

This initiative marks another step in the EU’s strategic ambition to strengthen its Defense Technological and Industrial Base (EDTIB) and to bridge the gap between civil, dual-use, and defense-related innovation.

Below is a concise overview of the initiative, its relevance for the aerospace, defense and space industry, and how companies can actively participate in the upcoming funding opportunities.

1 What the Initiative Is About

The agreement – sometimes referred to as the “Defense Investment Omnibus” – introduces targeted changes across several EU funding programs to make them more accessible for defense-related and dual-use projects.

Key affected programs include:

European Defense Fund (EDF)
Horizon Europe
Digital Europe Program
Connecting Europe Facility
Strategic Technologies for Europe Platform (STEP)

In addition, Ukraine will be granted participation rights in the EDF, further broadening cooperation within Europe’s defense ecosystem.

Objectives of the initiative:

Accelerate investments in Europe’s defense industrial capacity.
Enable smoother transitions between civil and military innovation.
Strengthen cross-border cooperation among industry and research actors.
Improve Europe’s strategic autonomy and resilience.

2 Why This Matters for Aerospace, Defense & SpaceTech Companies

This initiative opens new doors for companies operating in the Aerospace, Defense, NewSpace and SpaceTech sectors, especially those working on dual-use technologies.

Key takeaways:

More funding opportunities: EDF and related programs will broaden eligibility for defense and dual-use technologies (e.g. propulsion systems, sensors, advanced materials, autonomous systems).
Cross-program flexibility: Civil programs such as Horizon Europe and Digital Europe can now support more defense-relevant innovation.
Cross-border collaboration: Many calls will require multi-country consortia, encouraging partnerships between industry, SMEs, and research institutions.
Strategic positioning: Companies aligning their R&D with EU security and capability goals will have a competitive advantage in future calls.
Compliance and ownership checks: Beneficiaries must meet strict EU-ownership, control, and security requirements — essential for non-EU groups with subsidiaries in Europe.

3 How Clients Can Participate – Practical Steps

Step 1 – Identify relevant technologies and assets

Assess your portfolio for dual-use potential, especially in aerospace structures, satellite components, sensors, propulsion, or data systems.
Map how your capabilities align with European security and defense priorities.

Step 2 – Build or join a consortium

Most EDF and Horizon calls require at least three partners from three different EU or associated countries.
Identify suitable industrial or academic partners early.
Negotiate consortium and IP-governance agreements in advance.

Step 3 – Check compliance and eligibility

Ensure your entity qualifies as EU-based and not controlled by a non-EU parent without prior approval.
Review export control, cybersecurity, and national security compliance obligations.

Step 4 – Monitor upcoming calls

Regularly check the European Commission’s portals for EDF, STEP, and Horizon Europe defense-related calls.
The EDF provides up to 100 % funding for research and significant co-funding for development and prototyping.
Application guides (“Guide for Applicants”) are available via the EDF official site.

Step 5 – Legal and strategic preparation

Review project and consortium agreements, IP rights allocation, confidentiality, and security clauses.
For dual-use and defense projects, verify whether public procurement or export control rules apply.
Ensure readiness for potential audits and security clearances.

4 Special Considerations for German and European Clients

For companies based in Germany and the DACH region, the initiative offers new ways to link national R&D strengths with EU-level defense priorities.

Broader access: Firms traditionally active in civil aerospace or infrastructure can now expand into dual-use and defense-related innovation.
Public procurement exemptions: Certain EU-funded projects may entitle to direct procurement out of existing frame agreements (SAFE).
Dual-use focus: Companies producing high-precision materials, electronics, or space-derived technologies (e.g. aluminum systems, satellite structures, AI-based analytics) are well-positioned.
Compliance advantage: Early integration of legal, export control, and security frameworks improves eligibility and project success rates.

5 Recommended Next Steps

a) Client screening: Identify which of your business units or technologies fit the new EU framework.
b) EU-funding workshop: Conduct an internal or joint workshop (legal + technical + finance teams) to define funding priorities.
c) Monitoring system: Set up a regular monitoring or alert service for EDF and related EU calls.
d) Partnership network: Leverage existing industry, research, and institutional contacts for consortium formation.
e) Legal review: Ensure early review of IP, security, and export-control aspects before application submission.