Article "Aligning EU Defence, Industry, Innovation, and Decarbonisation could save money and boost competitiveness", published by the Strategic Perspectives, April 2025.
The European Union is undertaking a historic realignment of its defence, industrial, innovation, and climate strategies in response to rising geopolitical threats and a shifting global power dynamic. Prompted by increasing tensions with Russia and political uncertainty in the United States, the European Commission has introduced the ReArm Europe Plan/Readiness 2030, which reallocates €150 billion from unused NextGenerationEU loans to stimulate defence investment. With the potential to mobilise up to €800 billion and a requirement that 65% of procured materials be produced in Europe, this plan not only strengthens military preparedness but also invigorates key sectors—such as steel, batteries, drones, and autonomous mobility.
Defence R&D as a Catalyst for Innovation:
Historically, defence spending has been a powerful driver of technological progress, giving rise to transformative innovations like the Internet and AI. The EU currently lags behind global leaders like the US in defence-related R&D. However, prioritising dual-use technologies—including advanced solar panels, AI, and efficient engines—can bridge this gap. Enhanced defence R&D benefits the EU by:
- Elevating military capabilities through advanced tech;
- Enhancing global industrial competitiveness; and
- Stimulating economic growth via innovation ecosystems.
Aligning defence R&D with broader industrial goals thus ensures a cohesive approach to strategic resilience and technological advancement.
Integrating Decarbonisation into Defence Spending:
Reconciling defence imperatives with climate neutrality targets is critical for the EU, particularly under fiscal pressures. The article advocates for an integrated investment model, breaking away from isolated funding tracks for defence, climate, and competitiveness. By targeting sectors such as sustainable defence manufacturing, clean energy tech, and AI-powered production, the EU can achieve multiple strategic objectives. For instance, green hydrogen and battery innovations serve both military and climate agendas, bolstering autonomy and energy resilience.
The Clean Industrial Deal provides a framework for promoting zero-carbon technologies, and defence spending can accelerate this by:
- Creating stable demand for sustainable solutions;
- Attracting private investments in green tech; and
- Enhancing supply chain security through energy independence.
To meet the challenges of a rapidly evolving global landscape, the EU must adopt a unified approach that aligns its defence spending with innovation and climate goals. Strategic procurement, expanded multi-use R&D, and strong public-private cooperation can help the EU lead in security, sustainability, and technological progress—turning current crises into opportunities for long-term resilience and competitiveness.
This publication is based on extracts from an article written by Julian Popov, April 2025. To read the complete article follow the link here.
See below for our coverage on similar topics:
- Climate Change and the Military: Discourses and Practices
- Irish Defence Forces Review 2024: Climate Change, Security and Defence
- Shaping the Future: Energy Transition in the Defence Sector