EU regulation to boost defence-related investment via ReArm Europe

The European Parliament and the Council have adopted a regulation amending several existing EU programmes to incentivise defence-related and dual-use investment under the ReArm Europe Plan.

• Main changes: The Regulation adds a fourth STEP sector for defence technologies, opens Horizon Europe’s EIC Accelerator to dual-use and critical defence innovations (with special eligibility for Ukraine and EEA states), enables reinvestment of EIC returns, associates Ukraine to the EDF, broadens DEP to dual-use and cyber‑resilience with AI Factories/AI Gigafactories, expands CEF Digital to cloud/AI/AI factories and prioritised digital capacities, and aligns cohesion funds and CEF for dual-use transport/military mobility infrastructure on EU Priority Military Mobility Corridors.
• Background/details: The act responds to Russia’s war against Ukraine and perceived geopolitical instability, seeks to strengthen the European Defence Technological and Industrial Base, tightens eligibility and security screening for dual‑use/defence R&I and DEP projects (including restrictions on entities controlled from certain third countries), introduces mechanisms for resource transfers and cumulative funding across EU programmes, and mandates updated Commission guidance on critical technologies including defence technologies under STEP and on AI infrastructure deployment via DEP and CEF.