Regulation (EU) 2025/2653 of the European Parliament and of the Council of 19 December 2025 amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153 and (EU) 2024/795, as regards incentivising defence-related investment in the EU budget to implement the ReArm Europe Plan (Text with EEA relevance)

Article 1

Regulation (EU) 2021/694 is amended as follows: (1) in Article 3(1), second subparagraph, the following point is added: ‘(c) to support and accelerate dual-use projects, services, competences and applications, strengthening societal resilience.’ ; (2) in Article 4(1) the following point is added: ‘(d) deploy and operate AI Factories and new-generation AI Gigafactories specialised in developing, training, and running the most complex, very large AI models and applications, including hardware and software necessary for such deployment.’ ; (3) Article 6 is amended as follows: (a) in paragraph 1, points (e) and (f) are replaced by the following: ‘(e) improve resilience against cyber and hybrid threats against critical digital infrastructure and cyberattacks, contribute towards increasing risk-awareness and knowledge of cybersecurity processes, support public and private organisations in achieving basic levels of cybersecurity, for example by deploying end-to-end encryption of data and software updates; (f) enhance cooperation between the civil and defence spheres with regard to dual-use projects, services, competences and applications in cybersecurity, including the development of cybersecurity technologies tailored to defence-related infrastructure, in accordance with Regulation (EU) 2021/887 of the European Parliament and of the Council  ( *1 ) ; ( *1 )   Regulation (EU) 2021/887 of the European Parliament and of the Council of 20 May 2021 establishing the European Cybersecurity Industrial, Technology and Research Competence Centre and the Network of National Coordination Centres ( OJ L 202, 8.6.2021, p. 1 , ELI: http://data.europa.eu/eli/reg/2021/887/oj ).’;" (b) paragraph 2 is replaced by the following: ‘2.   The actions under Specific Objective 3 shall be implemented primarily through the European Cybersecurity Industrial, Technology and Research Competence Centre and the Network of National Coordination Centres in accordance with Regulation (EU) 2021/887. However, the EU Cybersecurity Reserve shall be implemented by the Commission and, in accordance with Article 14(6) of Regulation (EU) 2025/38, by ENISA.’ ; (4) in Article 8(1), point (a) is replaced by the following: ‘(a) support the public sector and areas of public interest, such as health and care, education, judiciary, customs, civil protection, defence, transport, mobility, energy, environment, cultural and creative sectors, including relevant businesses established within the Union, to effectively deploy and access state-of-the-art digital technologies, such as HPC, quantum, AI and cybersecurity;’ ; (5) in Article 12, paragraph 5 is replaced by the following: ‘5.   The work programme may also provide that legal entities established in associated countries and legal entities that are established in the Union but are controlled from third countries are not eligible to participate in all or some actions under Specific Objective 3 and in actions focused on technologies with dual-use potential under any specific objective for duly justified security reasons. In such cases, calls for proposals and calls for tenders shall be restricted to legal entities established or deemed to be established in Member States and controlled by Member States or by nationals of Member States. Such restrictions may be applied to access to the capacities deployed under such calls. Those restrictions shall be proportionate and applied only where strictly necessary.’ ; (6) in Article 20(1), the following point is added: ‘(d) for calls for proposals intended to support dual-use technologies, services, competences or applications, the trans-European dimension of the project.’ ; (7) in Specific Objective 5, point I of Annex I, point 4 is replaced by the following: ‘4.    Transport, mobility, energy and environment Deploy decentralised solutions and infrastructure required for large-scale digital applications such as connected automated driving, unmanned aerial, ground, surface and underwater vehicles, smart mobility concepts, smart cities, smart rural areas or outermost regions, in support of transport, energy and environmental policies and in coordination with the actions for digitalising the transport and energy sectors under Connecting Europe Facility.’.

Article 2

Regulation (EU) 2021/695 is amended as follows: (1) in Article 46, the following paragraph is inserted: ‘4a.   By way of derogation from Article 212(3) of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council  ( *2 ) , repayments, including reimbursed advances, revenues and unused amounts net of fees and costs, of EIC blended finance of the EIC Pilot under Horizon 2020, shall be considered to be internal assigned revenues in accordance with Article 21(3), point (f), and Article 21(4) and (5) of Regulation (EU, Euratom) 2024/2509 and the time restriction of two years set out in Article 212(3), second subparagraph, of Regulation (EU, Euratom) 2024/2509 shall apply from 23 December 2025. ( *2 )   Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union ( OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj ).’;" (2) Article 48 is amended as follows: (a) in paragraph 1, the following subparagraphs are inserted after the second subparagraph: ‘By way of derogation from Article 7(1), the support referred to in points (a), (b) and (c), of the second subparagraph of this paragraph may include potential dual-use applications, while advancing civilian application use. By way of derogation from Article 7(1), the support referred to in point (d) of the second subparagraph of this paragraph may include innovation in critical defence technologies referred to in Article 2(1), point (a)(iv), of the STEP Regulation, while fostering, where appropriate, innovations with dual-use potential.’ ; (b) the following paragraph is inserted: ‘1a.   The application of the derogations to Article 7(1) provided for in paragraph 1 of this Article shall be included in the Commission’s monitoring of the Programme pursuant to Article 50.’ ; (c) paragraph 2 is replaced by the following: ‘2.   The beneficiary of the Accelerator shall be a legal entity qualifying as a start-up, an SME or, in exceptional cases, as a small mid-cap intending to scale up, established in a Member State or in an associated country. With regard to support for innovation in critical defence technologies under paragraph 1, second subparagraph, point (d), of this Article, participation shall be limited to legal entities established in the Union, in Ukraine or in an EEA member associated to Horizon Europe. Legal entities directly or indirectly controlled by a third country other than Ukraine or an EEA member associated to Horizon Europe, or by legal entities of such a third country shall be excluded from participation. By way of derogation from the second subparagraph, a legal entity established in the Union, or in an EEA member associated to Horizon Europe and which is controlled by a third country other than Ukraine or an EEA member associated to Horizon Europe, or by a legal entity of a third-country other than Ukraine or an EEA member associated to Horizon Europe shall be eligible to be a beneficiary under paragraph 1 of this Article, provided that guarantees are made available to the Commission. Such guarantees shall be approved in accordance with the national procedures of the Member State or the EEA member associated to Horizon Europe in which the legal entity is established, such as adequate measures pursuant to screenings, as defined in Article 2, point (3), of Regulation (EU) 2019/452 of the European Parliament and of the Council  ( *3 ) . The guarantees shall provide assurances that support for the legal entity would not contravene the security and defence interests of the Union and its Member States, as established in the framework of the common foreign and security policy pursuant to Title V of the TEU, including respect for the principle of good neighbourly relations. With regard to support under paragraph 1, second subparagraph, point (a), (b) or (c), of this Article with potential dual-use applications, the work programme may provide that it is possible to limit participation to legal entities established only in Member States or to legal entities established in specified associated countries in addition to Member States. Any limitation on participation of legal entities established in associated countries which are EEA members shall comply with the terms and conditions of the Agreement on the European Economic Area. For duly justified and exceptional reasons, in order to guarantee the protection of the strategic interests of the Union and its Member States, the work programme may also exclude the participation of legal entities established in the Union or in associated countries directly or indirectly controlled by non-associated third countries or by legal entities of non-associated third countries from individual calls for proposals, or make their participation subject to conditions set out in the work programme. The proposal may be submitted either by the beneficiary or, subject to the prior agreement by the beneficiary, by one or more natural persons or legal entities intending to establish or support that beneficiary. In the latter case, the funding agreement shall be signed only with the beneficiary. ( *3 )   Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union ( OJ L 79 I, 21.3.2019, p. 1 , ELI: http://data.europa.eu/eli/reg/2019/452/oj ).’."

Associated countries

Article 3

Regulation (EU) 2021/697 is amended as follows: (1) Article 5 is replaced by the following: ‘Article 5 Associated countries The Fund shall be open to the participation of the following third countries (associated countries): (a) members of the European Free Trade Association which are members of the EEA, in accordance with the conditions laid down in the Agreement on the European Economic Area; (b) Ukraine, in accordance with the conditions laid down in the EU-Ukraine Association Agreement.’ ; (2) Article 6 is replaced by the following: ‘Article 6 Support for disruptive technologies for defence 1.   The Fund shall support actions that are conducive to developing disruptive technologies for defence in the areas of intervention defined in the work programmes referred to in Article 24. 2.   The work programmes shall lay down the most appropriate forms of funding, selection and award criteria and procedures, and implementation for disruptive technologies for defence.’ ; (3) the following article is inserted: ‘Article 8a Cumulative funding and transfers of resources 1.   An action that has received a contribution from another Union programme may also receive a contribution under the Fund, provided that the contributions do not cover the same costs. The rules of the relevant Union programme shall apply to the corresponding contribution to the action. The support from the different Union programmes may be calculated on a pro-rata basis in accordance with the documents setting out the conditions for support. 2.   Resources allocated to Member States under shared management may, at the request of the Member State concerned, be transferred to the Fund, subject to the conditions set out in the relevant provisions of Regulation (EU) 2021/1060 of the European Parliament and of the Council  ( *4 ) . The Commission shall implement those resources directly in accordance with point (a) of the first subparagraph of Article 62(1) of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council  ( *5 ) or indirectly in accordance with point (c) of that subparagraph. Such resources shall be implemented for the benefit of the Member State concerned and in accordance with the rules of the Fund. 3.   Resources transferred in accordance to paragraph 2 of this Article may, by way of derogation from Article 13(2), be used for the purpose of contributing to the funding of eligible actions referred to in Article 10(3), points (e) to (h), up to 100 % of the eligible costs. 4.   Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 2 of this Article and in any event by 30 September 2027, the corresponding uncommitted resources may be transferred back to one or more respective source programmes, at the request of the Member State concerned, in accordance with the conditions set out in the relevant provisions of Regulation (EU) 2021/1060. 5.   Member States, Union institutions, bodies and agencies, third countries, international organisations, international financial institutions or other third parties, may provide additional financial contributions to the Fund. Such financial contributions shall constitute external assigned revenue within the meaning of Article 21(2), point (a), (d), or (e) or Article 21(5) of Regulation (EU, Euratom) 2024/2509. ( *4 )   Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy ( OJ L 231, 30.6.2021, p. 159 , ELI: http://data.europa.eu/eli/reg/2021/1060/oj )." ( *5 )   Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union ( OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj ).’."

Article 4

Regulation (EU) 2021/1153 is amended as follows: (1) Article 3 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1.   The general objectives of the CEF are to build, develop, modernise, complete and make resilient the trans-European networks in the transport, energy and digital sectors and to facilitate cross-border cooperation in the field of renewable energy, taking into account the long-term decarbonisation commitments and the goals of increasing European competitiveness; smart, sustainable and inclusive growth; territorial, social and economic cohesion; and the access to and integration of the internal market, with an emphasis on facilitating the synergies among the transport, energy and digital sectors.’ ; (b) in paragraph 2, point (c) is replaced by the following: ‘(c) in the digital sector: to contribute to the development of projects of common interest relating to the deployment of and access to safe and secure very high capacity networks, including 5G systems, to the setting up and deployment of digital capacities such as cloud, AI, AI factories and AI Gigafactories, to the increased resilience and capacity of digital backbone networks on Union territories by linking them to neighbouring territories, as well as to the digitalisation of transport and energy networks.’ ; (2) in Article 8(4), the following point is added: ‘(f) projects of common interest contributing to the setting up and deployment or significant upgrade of digital capacities, including cloud, AI, AI factories and AI Gigafactories shall be prioritised according to the extent they significantly contribute to improve the performance, resilience and security of transport, energy and digital infrastructure that are critical for the proper functioning of the internal market.’ ; (3) Article 9 is amended as follows: (a) in paragraph 2, the following subparagraph is added: ‘Specific activities within an action pursuant to point (c) of the first subparagraph may include, where relevant, measures to safeguard the infrastructure for civilian-defence dual use with regard to military counter-mobility or to provide fuel infrastructure for civilian-defence dual use transport activities.’ ; (b) paragraph 4 is amended as follows: (i) point (d) is replaced by the following: ‘(d) actions supporting the protection, deployment of new or the significant upgrading of existing backbone networks or their repair, including submarine cables, within and between Member States and between the Union and third countries, such as the actions listed in Part V, point 3, of the Annex, as well as other actions supporting the deployment of backbone networks referred to in that point;’ ; (ii) the following point is added: ‘(f) actions supporting the setting up and deployment of digital capacities in cloud, AI, AI factories and AI Gigafactories;’ ; (4) in Article 15(2), the following point is inserted: ‘(ba) subject to the transfer of the necessary resources to the CEF in the context of the mid-term review of programmes pursuant to Regulations (EU) 2021/1058  ( *6 ) and (EU) 2021/1056  ( *7 ) of the European Parliament and of the Council and pursuant to Article 4(13) of this Regulation, for works relating to the specific objectives referred to in Article 3(2), point (a)(ii), of this Regulation, the following conditions apply: (i) co-financing rates may be increased by 10 percentage points above the co-financing rate referred to in point (b); (ii) actions are entitled to a pre-financing payment representing at least 20 % of the amount allocated in the grant agreement; (iii) actions shall be located on one or more of the four EU Priority Military Mobility Corridors identified by Member States in Annex II to the Military Requirements for Military Mobility within and beyond the EU, including logistic hubs and cross-border sections of those corridors, and shall comply with the infrastructure requirements as set out in Commission Implementing Regulation (EU) 2021/1328  ( *8 ) , and specific conditions for participation in the award procedure for such actions may be set in accordance with Article 136 of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council  ( *9 ) ; ( *6 )   Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund ( OJ L 231, 30.6.2021, p. 60 , ELI: http://data.europa.eu/eli/reg/2021/1058/oj )." ( *7 )   Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund ( OJ L 231, 30.6.2021, p. 1 , ELI: http://data.europa.eu/eli/reg/2021/1056/oj )." ( *8 )   Commission Implementing Regulation (EU) 2021/1328 of 10 August 2021 specifying the infrastructure requirements applicable to certain categories of dual-use infrastructure actions pursuant to Regulation (EU) 2021/1153 of the European Parliament and of the Council ( OJ L 288, 11.8.2021, p. 37 , ELI: http://data.europa.eu/eli/reg_impl/2021/1328/oj )." ( *9 )   Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union ( OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj ).’."

Article 5

Article 2 of Regulation (EU) 2024/795 is amended as follows: (1) in paragraph 1, point (a), the following point is added: ‘(iv) defence technologies.’ ; (2) paragraph 2, point (b), is replaced by the following: ‘(b) they contribute to reducing or preventing strategic dependencies and vulnerabilities of the Union.’ ; (3) paragraph 7 is replaced by the following: ‘7.   By 2 May 2024, the Commission shall issue guidance on how the technologies in the sectors referred to in paragraph 1, point (a), of this Article can be considered critical as well as on how to meet the conditions set out in paragraph 2 of this Article. In that guidance, the Commission shall clarify the notion of value chain and associated services critical for and specific to the development or manufacturing of the final products referred to in paragraph 3 of this Article. By 24 February 2026, the Commission shall update that guidance to cover the sector set out in Article 2(1), point (a)(iv). That guidance shall be reviewed, where appropriate, in light of the interim evaluation report referred to in Article 8.’.

Article 6

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union .