What changed between the draft committee report and the plenary report

Added:(1f) Recognising the strategic importance of fostering efficiency, reducing unnecessary duplications and fragmentation of the Union’s defence industry, the Commission should, where appropriate, prioritise projects that promote cross-border cooperation, facilitate technology transfers between different Member States, the establishment of interchangeable or common frameworks, or further advance the integration of the defence industry, including by demonstrating Member States commitments to jointly own, use, and manage final products in a coordinated manner.

Removed:Article 4 – paragraph 1 – point 1 – point -c a (new), Article 3 – paragraph 2 – point a – point ii a (new): (-ca) in point (a), the following point is added: / ‘(iia) to reinforce Union external borders by impeding adversary movement and enhancing military mobility.’

Added:(2) The Strategic Technologies for Europe Platform (STEP) established by Regulation (EU) 2024/795 of the European Parliament and of the Council is an initiative aimed at boosting Union competitiveness by mobilizing funds from 11 existing Union programmes towards critical technologies in 3 strategic sectors: digital technologies and deep tech innovation, clean and resource-efficient technologies, and biotechnologies. As such, it is a good vehicle to mobilise, in a coordinated and synergetic manner and by enhancing civil-military cooperation, Union resources towards defence and security technologies, including key digital frontier technologies required for the development of defence products and technologies.

Removed:Counter-mobility and territorial defence infrastructure are critical to ensuring full-spectrum military mobility and defence readiness. Including dual-use obstacles, fortifications, and rapid deployment systems allows Member States to strengthen border and territorial defence in response to evolving threats.

Added:(3) While support to technologies having defence implications is possible today under the 3 existing strategic sectors identified in STEP, it appears necessary to increase the potentialities of development of research, industry and innovation in the defence and security area by setting out a fourth strategic sector in STEP focussed on defence and security technologies, without compromising Union’s intended technological leadership in the existing sectors. The added fourth strategic sector should include those enhancing societal resilience, understood as ability to withstand, adapt to, and recover from natural and human-caused disruptions, shocks and stresses - while maintaining core functions, structures, and values, including trust and participation of citizens in democracy and democratic institutions and strengthening integrity of elections and checks and balances. This new strategic sector should ensure that the STEP incentives are used to increase Union funding in innovative defence security technologies with the aim to respond effectively to current and emerging threats and enhance the Union’s strategic autonomy and contribute to European competitiveness in line with STEP objectives. Defence technologies should be understood as those referred to in the Annex to Directive 2009/43/EC and include, in particular, technologies in the areas identified by the European Council on March 6th 2025, namely: air and missile defence, artillery systems, including deep precision strike capabilities, missiles and ammunition, drones and anti-drone systems, strategic enablers, including in relation to space and critical infrastructure protection, military mobility, cyber, artificial intelligence and electronic warfare. Security technologies should be understood, but not limited to, technologies intended to support the prevention of, detection of, protection against, response to, and recovery from, security threats, such as terrorism, hybrid threats, critical infrastructure protection, cybersecurity and disaster-resilient societies. The development of such technologies is essential to enhancing the Union’s internal security, safeguarding its strategic interests, and ensuring the resilience of Member States’ societies and economies against destabilisation attempts. The Commission should issue guidance on the interpretation and understanding of defence and security technologies, including those enhancing societal resilience, to ensure consistent application of relevant legal provisions. As regards artificial intelligence, AI Gigafactories should become key infrastructures to expand rapidly the power of AI in defence technologies.

Removed:Regulation (EU) 2021/1153

Added:(4) In addition, in order to optimise the capacity of the programmes covered by STEP to mobilize Union’s resources towards defence’s needs, it is necessary to clarify that these programmes can pursue objectives and activities that are related to improving the competitiveness and resilience of the European Defence Technological and Industrial basis (EDTIB) as well as research and development activities in the defence field.

Removed:Article 4 – paragraph 1 – point 2 a (new), Article 9 – paragraph 2 – point c: (2a) In Article 9(2), point (c) is replaced by the following: / ‘(c) under the specific objective referred to in Article 3(2), point (a)(ii), and in accordance with Article 12, actions or specific activities within an action, supporting parts, new or existing, of the TEN-T suitable for military transport, in order to adapt the TEN-T to dual-use infrastructure requirements, including through the development of dual use-energy infrastructure;’

Added:(5) Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament and of the Council is the Union’s key funding programme for research and innovation, playing a pivotal role for global scientific and technological leadership of the Union. The European Innovation Council (EIC) Accelerator established by that Regulation provides support, in particular, for innovations with breakthrough potential and of a disruptive nature with scale-up potential that may be too risky for private investors. SMEs, start-ups and some small mid-cap enterprises operating within the defence sector require financing for the commercialization of innovative products. However, these companies face higher barriers to access finance compared to entities in other sectors. Whereas the support to defence research and development is done through the European Defence Fund (EDF), which is a specific programme of Horizon Europe, it is appropriate to open the EIC Accelerator to support breakthrough and disruptive innovation for civil applications with potential dual-use, provided that such applications are primarily designed for civil use. Support to scale-up under the EIC Accelerator should also be extended to non-bankable SMEs, including start-ups and non-bankable small mid-caps, including entities which have already received support from the Accelerator carrying out breakthrough and disruptive non-bankable innovation, including defence and security technologies, referred to in Article 2(1)(a)(iv) [of the STEP Regulation], provided they demonstrate dual-use potential. This justifies a targeted exception to the principle set out in Article 7(1) of Regulation (EU) 2021/695 of the European Parliament and of the Council according to which research and innovation activities under Horizon Europe have an exclusive focus on civil applications while not undermining the objective of ensuring unnecessary duplications. The Commission should ensure proper oversight of the application of the targeted exception, including through the collection and reporting of appropriate data, without creating additional administrative burdens for applicants and beneficiaries.

Removed:(02021R1153)

Added:(6) Moreover, to ensure that appropriate resources are directed to the funding of dual-use and defence applications under Horizon Europe it is appropriate to derogate to Article 212(3) of the Financial Regulation in order to ensure that repayments, including reimbursed advances, revenues and unused amounts net of fees and costs of EIC blended finance investment component of the EIC pilot under Horizon 2020 are not directed to the Union budget but reinvested in the EIC Fund in order to finance additional ▌dual-use and defence applications benefitting from the amended scope . The timeframe set out in Article 212(3) of the Financial Regulation should also be adapted, by inserting a derogation, to allow for that possibility.

Removed:The Niinisto report specifically mentions the necessity to intensify further work on priority dual-use transport corridors for military movements and the extension of fuel supply chains for the armed forces along these corridors, as well as stockpiling and strategic reserves of energy. This position is echoed in NATO statements.

Added:(7) The European Defence Fund (EDF) set out in Regulation (EU) 2021/697 of the European Parliament and of the Council, is the leading programme for enhancing the competitiveness, innovation, efficiency and technological autonomy of the Union’s defence industry. The EDF also aims at supporting actions that are conducive to developing disruptive technologies for defence. In order to better address the specificities of such actions, and in particular technologies demonstrating rapid deployment capability, such as their small scale or their need for a quick support, it is appropriate to significantly shorten and simplify the procedures to decide on the support of these actions while in the same time framing the conditions for the decision on such a support in the work programme and without undermining the principle of excellence.

Removed:Regulation (EU) 2021/1153

Added:(8) It is also necessary to exploit synergies between EDF and other Union programmes. To that purpose, it should be possible for Member States, European Union institutions, bodies and agencies, third countries, international financial institutions or other third parties to provide voluntary contributions to the Programme, as external assigned revenues. Voluntary transfers of resources allocated to Member States in shared management to the EDF and the combination of contributions from EDF with other Union programmes for specific actions should be possible, provided that the cumulative Union support does not exceed the total eligible costs of the action.

Removed:Article 4 – paragraph 1 – point 2 b (new), Article 9 – paragraph 2 – point c a (new): (2b) In Article 9(2), the following point is added: / ‘(ca) under the specific objective referred to in Article 3(2), point (a)(iii), and in accordance with Article 12, actions supporting counter-mobility and territorial defence infrastructure, including dual-use obstacles, fortifications, and rapid deployment systems to reinforce border and territorial defence as part of comprehensive military mobility;’

Added:(9) The Digital Europe Programme (DEP) established by Regulation (EU) 2021/694 of the European Parliament and of the Council aims to support and accelerate the digital transformation of the European economy, industry and society and to improve the competitiveness of Europe in the global digital economy. In this context, the programme should also aim at supporting, in particular, projects, services and competences with potential dual-use application under all its specific objectives. This would contribute to strengthening Europe’s societal and democratic resilience in the face of ongoing hybrid attacks, foreign interference and emerging threats in the digital domain - an escalation that has intensified markedly since Russia’s invasion of Ukraine.

Removed:The inclusion of counter-mobility and territorial defence infrastructure ensures that CEF funding supports not only the movement of military forces but also defensive measures needed to deny access to potential aggressors, strengthening the Union’s border protection and territorial defence capabilities.

Added:(10) To enhance technological sovereignty and competitiveness, the Union needs the computing, cloud and data infrastructures that AI leadership requires. As part of the AI Continent strategy, the AI factories and Gigafactories are essential for the Union to be able to compete on the global level and ensure its strategic autonomy and competitiveness in science, dual-use research and in critical industrial sectors, including the defence industry. Such next-generation models require extensive connected computing infrastructure for breakthroughs in specific domains including defence. It is therefore appropriate to add, in the Specific Objective 1 – High Performance Computing of DEP, a supplementary operational objective dedicated to the deployment and operation of AI Factories and new generation of IA Gigafactories specialised in developing, training, and running the most complex, very large, AI models and applications, including hardware and software necessary for such deployment. In line with the Union’s ambition towards strategic autonomy, technological leadership and improved competitiveness, and to mitigate the environmental footprint of digital technologies, it is important to ensure that the deployed digital infrastructure and technologies, including AI, aim to be resource-efficient and follow circularity principles.

Removed:Regulation (EU) 2021/1153

Added:(11) In the specific Objective 5 of DEP – Deployment and Best Use of Digital Capacity and interoperability, it is also necessary to add, in the operational objective defined to support the public sector and areas of public interest, a reference to defence in order to clarify that the financial contribution of the Union under such an Objective can be extended to that sector. Support for the public sector should be accompanied by measures that strengthen the capacity of Union-based companies to supply, develop, and innovate in the field of digital infrastructure services.

Removed:Article 4 – paragraph 1 – point 3 a (new), Article 12 – paragraph 1 – introductory part: (3a) In Article 12(1), the introductory part is replaced by the following: / ‘1. Actions contributing to the adaptation of the TEN-T core network or comprehensive network as defined by Regulation (EU) No 1315/2013, with the purpose of enabling civilian-defence dual use of the infrastructure, including dual-use energy infrastructure, shall be subject to the following additional eligibility rules:’

Added:(12) It is also necessary to adapt the eligibility rules that might be set out in the work programme of DEP so that it is possible to provide, for duly justified security reasons, that legal entities established in associated countries, other than Ukraine or members of the EFTA which are members of the EEA, and legal entities that are established in the Union but are controlled from third countries, other than Ukraine or members of the EFTA which are members of the EEA, are not eligible to participate in all or some actions focused on technologies with dual-use potential under any specific objective. In such cases, calls for proposals and calls for tenders should be restricted to legal entities established or deemed to be established in ▌ and controlled by Member States, Ukraine or members of the EFTA which are members of the EEA, or their nationals This beneficial treatment strengthens Europe’s overall digital ecosystem by fostering shared security interests, enhancing mutual resilience to existing and emerging technological threats, and deepening strategic partnerships that benefit the stability and competitiveness of the continent.

Removed:(02021R1153)

Added:▌

Removed:Regulation (EU) 2021/1153

Added:(14) The Connecting Europe Facility (CEF) set out in Regulation (EU) 2021/1153 of the European Parliament and of the Council, aims to accelerate investment in the field of trans-European networks, enabling synergies between the transport, energy and digital sectors. In order to support the connected computing infrastructure required by defence products and technologies and beyond these areas, the objectives of the CEF digital sector within that Regulation should be extended to the deployment and provision of digital capacities such as cloud, AI and AI Gigafactories. In order to minimise environmental impact, optimise the use of scarce materials, and ensure long-term sustainability in line with the Union’s climate and circular economy objectives, it is important that the deployed capacities aim to be resource-efficient and follow circularity principles.

Removed:Article 4 – paragraph 1 – point 3 b (new), Article 15 – paragraph 2 – point b: (3b) in Article 15(2), point (b) is replaced by the following: / ‘(b) for works relating to the specific objectives referred to in Article 3(2), points (a)(ii) and (iii), the amount of Union financial support shall not exceed 50 % of the total eligible cost; however, the co-financing rates may be increased to a maximum of 85 % if the necessary resources are transferred to the CEF pursuant to Article 4(13);’

Added:(15) Military mobility is also one of the objectives of the CEF programme. The Joint White Paper for European Defence Readiness 2030 recognised military mobility as an essential enabler for European security and defence and stressed the Union added-value in supporting dual-use infrastructure for mobility. The Trans-European Transport Network (TEN-T) policy serves as a key strategic instrument in building the Union’s cross-border transport infrastructure. Although originally intended for civilian purposes it also holds a remarkable potential for dual-use, military and civilian. In line with the Strategic Compass, the Union aims to strengthen the dual-use transport infrastructure of the Trans-European Transport Network (TEN-T) in close cooperation with NATO and other like-minded partners. The objective to complete the TEN-T core network by 2030 remains unchanged.

Removed:(02021R1153)

Added:(15a) Actions financed under CEF should contribute to the improvement and acceleration of the Trans-European Transport Network (TEN-T) and be designed for interoperability and compatibility with civilian use. Investment in dual-use infrastructure benefits both military readiness and civilian connectivity. Given the 94% overlap between the military mobility corridors and TEN-T dual-use infrastructure, funding of military mobility will benefit civilian use.(15b) The Niinistö report specifically refers to the need to intensify further work on priority dual-use transport corridors for military movements and the extension of fuel-supply chains for the armed forces along those corridors, as well as stockpiling and strategic reserves of energy. This position is echoed in NATO statements, which note that major infrastructure gaps remain particularly along its Eastern Flank. Estimates indicate that the Union requires an initial investment of at least EUR 70 billion to adapt its transport and logistics infrastructure for the rapid movement of troops and equipment across Union territory in the event of conflict. The Union should give special consideration to the necessary development of dual-use fuel infrastructure, whose core task is to ensure civilian needs, such as ensuring supplies to civil aviation, and that switches to military mode in wartime. This development should contribute not only to civil logistics and military mobility but also to transition towards a more sustainable transport and energy system in line with objectives of AFiR and ReFuelAviationEU.

Removed:Actions to reinforce EU external borders by impeding adversary movement and enhancing military mobility should have similar increased co-financing rate as those on adaptation of parts of the TEN-T for the dual use of the transport infrastructure.

Added:(15c) Furthermore, in relation to military mobility, there is a need to increase the protection of European territories from conventional military threats. Adapting the TEN-T to dual-use infrastructure requirements may, where appropriate, include measures to safeguard assets intended for civilian–defence use with regard to military counter-mobility and related risks, by designing, reinforcing, and protecting the infrastructure so that it is less vulnerable to disabling, blocking, or destruction by hostile acts, hazards, or sabotage.

Removed:Regulation (EU) 2021/1153

Added:(15d) The mid-term review of the European Regional Development Fund (ERDF) and the Cohesion Fund both established by Regulation (EU) 2021/1058 of the European Parliament and of the Council introduced the possibility to invest in defence or dual-use infrastructure to foster military mobility benefiting from a pre-financing of [30%] of the amounts programmed and the possibility to apply a Union financing of up to 100 %. In cases where Member States transfer resources allocated to them in shared management to CEF, they should benefit from the same conditions on pre-financing and co-financing for dual-use transport infrastructure projects as introduced in the ERDF and Cohesion Fund. In such a case, these amounts should be reserved to projects developing the Military Mobility corridors as identified by the Member States in Military Requirements for Military Mobility within and beyond the Union as well as digital connectivity and capacities, including the availability of appropriate logistics hubs for the deployment and subsequent redeployment of forces to and from the Union.

Removed:Article 4 – paragraph 1 – point 4, Article 15 – paragraph 2 – point ba – point ii: (ii) actions are entitled to a pre-financing payment representing at least 40 % of the amount allocated in the grant agreement;

Added:(15e) In order to accelerate the swift and seamless movement of personnel, material and assets within the Union, Member States are encouraged to cooperate closely to achieve a swift upgrading of the “hot spots” infrastructure within the four military mobility corridors, and particularly focus on the cross-border sections of these corridors, including rail, ports, and airports of these corridors, which have an impact in the short term. Priority investments on these corridors, their cross-border sections and the hot spots identified by the Commission should be carried out in cooperation with NATO.

Removed:(02021R1153)

Added:(15f) In light of the increased European defence-related investments with the Union budget, it is essential to ensure that such resources are allocated transparently, aligned with the Union’s strategic interests, and protected from misuse or diversion. The Commission should develop appropriate measures, if duly justified to safeguard the Union’s strategic interests, to enhance transparency, including clear identification of beneficiaries and ownership structures, while duly protecting confidential information. These principles should guide future instruments supporting Union defence objectives.

Removed:Raising pre-financing to 40% ensures timely disbursement of Union funds, enhancing liquidity for beneficiaries and accelerating the implementation of eligible military mobility actions. This adjustment facilitates the prompt execution of dual-use infrastructure projects essential for the Union’s security and defence objectives.

Added:(15g) Taking into account the urgency of the situation, the necessity to boost financially defence-related projects in Europe, and the expiry of the Recovery and Resilience Facility (RRF) established by Regulation (EU) 2021/241 of the European Parliament and of the Council in August 2026, Member States may consider to use the already existing possibility to amend their National Recovery and Resilience Plans to reallocate resources to their financial contributions towards Union defence industrial instruments. This would follow the already existing logic of using RRF funds in innovation within the space sector with nearly half of the Member States mentioning space-related actions in their RRF plans, including both traditional space nations and newer actors. Such reallocated Member State contributions are to be used for the benefit of the Member State concerned for the purpose of contributing to the achievement of one or more of the objectives set out in Article 4 of Regulation (EU, Euratom) No 2021/241.

Removed:Regulation (EU) 2024/795

Added:(15h) In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council and Council Regulations (EC, Euratom)No 2988/95, (Euratom, EC) No 2185/96 and (EU) 2017/1939, the financial interests of the Union are to be protected by means of proportionate measures, including measures relating to the prevention, detection, correction and investigation of irregularities, including fraud, to the recovery of funds lost, wrongly paid or incorrectly used, and, where appropriate, to the imposition of administrative penalties. In particular, in accordance with Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, the European Anti-Fraud Office (OLAF) has the power to carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. The European Public Prosecutor’s Office (EPPO) is empowered, in accordance with Regulation (EU) 2017/1939, to investigate and prosecute criminal offences affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council. In accordance with the Financial Regulation, any person or entity receiving Union funds is to cooperate fully in the protection of the financial interests of the Union, to grant the necessary rights and access to the Commission, OLAF, the Court of Auditors and, in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, the EPPO, and to ensure that any third parties involved in the implementation of Union funds grant equivalent rights.

Removed:Article 6 – paragraph 1, Article 2 – paragraph 1 – point a – point iv: (iv) defence and security technologies;

Added:(16) Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153▌and (EU) 2024/795 should therefore be amended accordingly.

Removed:Expanding STEP to include security technologies ensures comprehensive support for the Union’s resilience and strategic autonomy. Security technologies complement defence by addressing hybrid threats, critical infrastructure protection, cybersecurity, border management, and disaster resilience, reflecting the full spectrum of current security challenges.

Added:(17) Given the urgent need to enable crucial investments in defence in the context of pressing geopolitical challenges, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.

Removed:Regulation (EU) 2021/241

Added:(18) Since the objective of this Regulation, namely to strengthen research and development activities in dual-use and defence, improve the competitiveness of the Union’s defence industry and therefore contribute to the Union’s defence by refocusing investments of these critical priorities, cannot be sufficiently achieved by the Member States, but can rather be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives.

Removed:Article 6 a (new), Article 21 a (new): Article 6a / In Regulation (EU) 2021/241, the following Article is inserted: / ‘Article 21a / Use of unspent RRF resources for defence industrial capacity / By derogation from Article 5, Member States may propose to reallocate unused resources under the Recovery and Resilience Facility (RRF) towards voluntary national contributions to Union defence industrial instruments, including the European Defence Industry Programme (EDIP). Such reallocations shall comply with fiscal governance principles and Union financial stability, and shall support the scaling up of the Union’s defence technological and industrial base. The Commission shall assess and, if appropriate, approve such reallocations in coordination with the Member State concerned.’

Added:(18a) This Regulation has implications for the Union budget. Accordingly, the European Parliament’s Committee on Budgets adopted a budgetary assessment, which forms an integral part of Parliament’s mandate for negotiations,

Removed:Allowing voluntary reallocation of unspent RRF resources enables Member States to strengthen the Union’s defence industrial base without requiring new funding sources. This flexibility supports industrial scaling while respecting fiscal governance and ensures efficient use of remaining RRF funds to address urgent defence capacity needs.

Added:HAVE ADOPTED THIS REGULATION:

Removed:Article 6 b (new): Article 6b / Transparency and Financial Vetting Requirements / 1. Beneficiaries of Union funding pursuant to this Regulation shall disclose to the Commission information on their beneficial ownership structure, as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council1a. The accuracy of the disclosed information shall be duly verified prior to the award of funding. / 2. All financial transactions carried out pursuant to this Regulation, including those under indirect management or involving external assigned revenues, shall be subject to screening pursuant to Union law on anti-money laundering and countering the financing of terrorism . / 3. The Commission shall establish and maintain a Defence Transparency Register, listing all beneficiaries of funding pursuant to this Regulation. Registration in the Defence Transparency Register shall be a condition for the award and continued implementation of Union funding. / 1a Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).’

Added:Regulation (EU) 2021/694 [Digital Europe Programme] is amended as follows:

Removed:Given the sensitivity of defence funding, mandatory disclosure of beneficial ownership, AML/CFT screening, and registration in a Defence Transparency Register ensure transparency and integrity of Union funding, prevent misuse by opaque or hostile-controlled entities, and safeguard the Union’s security and financial interests.

Added:(-1) in Article 3(1), the first subparagraph is replaced by the following:

Added:‘1. The general objectives of the Programme shall be to support and accelerate the digital transformation of the European economy, industry and society, to bring its benefits to citizens, public administrations and businesses across the Union, and to improve the competitiveness of Europe in the global digital economy while contributing to bridging the digital divide across the Union and reinforcing the Union’s strategic autonomy and societal resilience, through holistic, cross-sectoral and cross-border support and a stronger Union contribution.’

Added:(-1a) in Article 3(1), second subparagraph, point (b) is replaced by the following:

Added:‘(b) in the private sector and in areas of public interest, to widen the diffusion and uptake of Europe’s key digital technologies, promoting the digital transformation and access to digital technologies, and increasing the resilience against hybrid threats in the digital domain;’