EU expands military aid to Ukraine: opportunities for European defense industry

Key data

European defense sector companies face a new window of opportunity. The Decision (CFSP) 2026/2363, adopted by the Council on 26 October 2026, amends Decision 2023/927 to expand military assistance to Ukraine through the European Peace Facility (EPF), with a specific focus on ammunition supply to the Ukrainian Armed Forces.

This is not an abstract foreign policy rule: it involves real contracts funded with European funds for ammunition manufacturers and suppliers established in the EU, and an additional budgetary commitment for Member States contributing to the EPF.

What does this regulation establish?

Decision 2026/2363 amends Decision (CFSP) 2023/927, which was the base rule authorizing the use of the EPF to provide military support to Ukraine. The amendment expands the assistance measure in one or both of these ways:

• Increased budget allocation: the amount assigned to the EPF for this specific measure is increased.
• Extension of scope: the type or volume of ammunition that can be supplied to the Ukrainian Armed Forces is expanded.

The European Peace Facility (EPF) is the EU's financial instrument that allows financing actions in the field of foreign and security policy with military or defense implications, something that ordinary EU budgets cannot directly finance. Member States contribute to the EPF proportionally and spending decisions are adopted by the Council.

Economic and operational impact

This decision has two types of economic impact differentiated by actor:

• For the European defense industry: the expansion of the EPF allocated to ammunition generates new supply contracts funded with European funds. Ammunition manufacturers, ballistic components, explosives and artillery systems established in the EU are the main candidates to benefit from these contracts. European funding reduces payment risk and offers medium-term demand visibility.
• For Member States contributing to the EPF: each expansion of the fund implies higher national contributions. The distribution is carried out proportionally among participating Member States, affecting the defense and foreign affairs budgets of each government.

From an operational perspective, defense sector companies wishing to bid for these contracts must be registered as authorized suppliers in the procurement procedures linked to the EPF, which are managed through Member States and the EU High Representative for Foreign Affairs.

Who does it affect?

• European ammunition manufacturers and defense component suppliers: companies with production capacity for artillery ammunition, projectiles, propellant charges and associated systems.
• Defense supply chain suppliers: companies that supply raw materials, components or logistics services to ammunition manufacturers.
• EU Member States contributing to the EPF: all Member States participating in the fund will see this expansion reflected in their national contributions.
• National Defense and Foreign Affairs Ministries: responsible for managing their countries' participation in the EPF and coordinating contracts with national industry.
• Advisors and consultants specialized in defense public procurement: professionals who advise companies on access to contracts funded by European security funds.

Practical example

A Spanish artillery ammunition manufacturing company, with production capacity certified and approved by the Ministry of Defense, can bid for supply contracts articulated through the EPF expanded by this Decision.

The usual process is as follows: the Member State (in this case, Spain through the Ministry of Defense) receives the corresponding EPF allocation, launches a procurement procedure with authorized national manufacturers and coordinates supply to Ukraine. The manufacturing company is paid from the European fund, with the payment guarantees that entails.

For a company that until now depended exclusively on national contracts, this route means access to an additional market with sustained demand and European financial backing, provided it meets the required authorization and certification requirements.

What should companies do now?

1. Verify authorization as a defense supplier: check if the company is registered and certified to supply ammunition or related components through the national Ministry of Defense procurement channels.
2. Contact the national Ministry of Defense: request information about procurement procedures linked to the EPF and specific requirements for participating in supplies to Ukraine.
3. Review production capacity: assess whether the company has the capacity to respond to increased demand from EPF contracts, including delivery times and required technical standards.
4. Monitor EPF developments: track Council decisions on new fund expansions, as each amendment can generate new procurement calls.
5. Consult a defense public procurement specialist: EPF procedures have legal and technical specificities that require specialized advice to maximize chances of success.

Official source

View complete regulation in official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202602363