EDIP Regulation: A New European Framework for Defence Sector

The EDIP Regulation 2025/2643 (“European Defence Industrial Programme”) establishes an innovative European framework aimed at strengthening the EU’s defence industrial sovereignty. It forms part of a broader effort to consolidate the European defence market through pooled procurement, reinforced industrial capacities, more resilient supply chains and closer coordination of defence equipment policies.

With a budget of EUR1.5bn, EDIP seeks to address structural fragmentation in the market and reduce reliance on third‑country suppliers, while improving the timely availability of defence products and services for Member States, associated countries and Ukraine as a strategic partner.

Implementation relies primarily on initiatives led by Member States, with the European Commission in a coordinating role. The timeframe is limited, as the Regulation expires in December 2027, reflecting the aim of accelerating a European dynamic in the short and medium term.

The Regulation operates largely as a toolbox, enabling Member States to adapt their national defence procurement schemes to ensure compatibility with the EDIP framework and thereby access EU funding.

To promote joint purchasing, the Regulation formalises a model of joint procurement structured around the Structures for European Armament Programmes (SEAPs). SEAPs support pooled development, acquisition and life‑cycle management of defence equipment.

The Regulation also empowers the Commission to act as a central purchasing body or to conclude advance purchase agreements to secure critical industrial capacities.

It further provides for the creation of a European catalogue of military sales, managed by the Commission following consultation with the European Defence Agency. The catalogue is intended to increase the visibility of eligible products and facilitate joint procurement.

Eligibility for EU funding is subject to strengthened European industrial‑content requirements, including a maximum threshold of thirty‑five per cent of components originating from non‑EU countries.

Four categories of actions are eligible for Union funding, with funding rates adjusted according to the European added value of each action:

• joint procurement
• industrial reinforcement
• support actions
• cross‑border cooperation

European Defence Projects of Common Interest (EDPCI) are designated as a priority and may receive up to one hundred per cent funding of eligible costs. A Fund Accelerating Defence Supply Chains Transformation (FAST) complements the framework and specifically targets SMEs and mid‑sized companies.

The Regulation also introduces specific mechanisms for crisis situations to ensure continuity of supply, overseen by a Supply Security Committee. Ukraine is integrated under a regime equivalent to that of EU entities, subject to eligibility requirements.

Overall, the EDIP Regulation represents a structural reform of the European defence procurement landscape. It strengthens collective procurement, industrial resilience and strategic coordination across the Union.

Check for more information here: EDIP Regulation: A New European Framework for Defence Sector | CMS