Committee on Industry, Research and Energy Extraordinary meeting
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ITRE European Parliament
Follow its sittings
Andrius Kubilius
The answer is very simple. We need to develop and build them or procure them without delay. That is why our space programs are becoming crucially important. To start with, we need to move forward on the European Space Act, where, again, your committee is playing the most important strategic role, you are doing a great job to protect our space assets. What is this European Space Act?
To protect our space assets from the exponential increase in space debris, and also to create the right conditions for a single market for space. That is why I would like to thank Elena Donazan, the member of the committee and the entire committee for your draft report. You are all strong supporters of our competitive, innovative, and resilient space ecosystem. I look forward to continuing our excellent cooperation on this file to improve and streamline the text. You have strong foundations for the upcoming legislative procedure with accounts.
Looking into the longer-term future of our defense and space policies, our most significant outstanding proposal, of course, is our European competitiveness fund for the next MFF, the most important financial instrument till 2035. So I'm very much looking forward to your draft report, which is also coming. In the upcoming negotiations, I urge you to stand fast on space and defense, because of the challenges we are facing. Accept no dilution, no compromise. 125,000,000,000 is the absolute bottom line.
So it's great that the European Parliament Budget Committee proposed an increase of the ECB European Competition Fund budget by €30,000,000,000. A bigger budget for defense, which is massive financial firepower, is needed to incentivize member states to spend better together and in Europe. Otherwise, there is a clear risk that increased national defense investment will not address the shortcomings of our European defense sector, but instead will risk aggravating fragmentation along national lines. And we need to use our EU budget to help the defense industry to adapt to the new environment and to accelerate its transformation. For space, the European Competitiveness Fund is also the legal text outlining the scope of our space systems, their services, their governance, security, and industrial policy.
In space, our number one goal is to maintain, expand, and improve our space flagships: Galileo for navigation, Copernicus for earth observation, and Naira Square for secure connectivity. Our European Union Space Services need to adapt to new realities, and we are preparing new systems for dual civil defense use, such as a dedicated earth observation governmental service, Zaleo PNT, and a new service to monitor radio frequency interference. We also proposed a more ambitious approach to accelerate access to space, to underpin technological leadership and space commercialization. Both for space and defense, we have in the European Competitiveness Fund proposal a special focus on SMEs and startups, so crucial for innovation. The European Parliament has always insisted on supporting smaller players because they are a crucial part of supply chains.
If they will not be able to scale up, big primes also will not scale up. That is why we have designed the ECP to offer them better access to financing and support services. And finally, our flexible ECP proposal or prudently flexible ECP proposal allows to expect than expected, and read immediately and react immediately and more forcefully to sudden challenges. And now let me announce our new proposals. First, Agile.
We present Agile to fill a very special gap, supporting SMEs and startups for super-fast delivery of innovation defense technologies and bringing products to market, responding to the most pressing needs identified by our armed forces. At the moment, these delays are a massive problem for our defense and deterrence. Agile is fast through simplified processes and governance, delivering funding support in four months. Mission-driven, to answer operational urgent needs of the armed forces. Affordable, focusing on low-cost products that can be produced at scale.
Agile's budget is limited to what's left in this MFF, €115000000. But with Agile, we have a full palette of defense funding instruments, so we can build on lessons learned for the next MFF. But to do that, we need a quick agreement to pilot Agile. It needs to be operational by the start of 2027. I count on you and the council to make it happen.
Time is of the essence. In my view, this file would qualify for a fast-track procedure. And a second new proposal, the AUSPA regulation adopted by the commission on seventh of April. It is a self-standing founding act for the agency, independent of MFF cycles as it is the case for other EU agencies. As you know, this change is necessary because AUSPA at the moment has led to the current is tied to the current MFF.
So the clock is ticking. The acronym AUSPA remains, but it has a new meaning. It now stands for European Union Space Services Agency to clearly focus agency on the operational aspects of space systems. AUSPA will continue to do its work, and we may assign AUSPA new tasks. Subject to its readiness, tasks could be connected to earth observation, secure connectivity, and space situational awareness, but also to future space activities.
For example, access to space, space commercialization and space economy, and technological sovereignty, research, and innovation. The proposal also makes it possible to entrust the USPA with tasks related to radio frequency monitoring and support in cybersecurity matters. Most importantly, USPA will continue to ensure the security accreditation through the Security Accreditation Board. In short, the proposal provides a clear legal basis and equips the agency with the tools needed to deliver on our ambitious vision for space. Finally, let me conclude on the European Space Shield.
This year, we will present our communication on the European Space Shield, an umbrella of space capabilities for defense and governmental use. We are now discussing the details with member states and industry. Dear friends, in this mandate, we managed to achieve quite a lot, altogether. Somebody said that during the first year, we did more for European defense than was done in the previous ten years. Maybe.
But the challenges ahead are much bigger than those we managed to overcome until now, and we cannot wait. So let us deliver together. Thanks a lot.
Giorgio Gori
Thank you, dear commissioner. Now we go with the intervention of the coordinators of the group representatives. You will have 96 seconds each with immediate 90 seconds answer from the commissioner and possible follow-up 30 seconds and 30 seconds. We start with Mr. Beckett for the EPP. The floor is yours.
Wouter Beke
Thank you, dear commissioner. I want to thank you for your presence here in the ITRE committee last week. We heard you in the city committee. I would like to ask you some questions in light of the recent developments in the war in Iran. We've not only seen an internal dialogue starting on the implications of Article 42.7 of our treaties, but we've also noticed that the United States are using a lot of their capacities, for example, Patriots and other missiles, that will need to be replenished in the near future, meaning that potential orders from the EU or Ukraine will be deprioritized and might have a heavy delay.
Rudi Kennes
The main lesson learned is, again, like you also mentioned, that we will need to build a stronger Europe that can rely on its own defense technological industrial base for its needs regarding our protection. And in that light, I have two questions for you. As E3 representative for the defense security of supply board, I was wondering whether the mapping as foreseen in Egypt has already started and what the first conclusions are? And second question, in an overheated defense market, we see that the national budgets on defense are not always spent in the most efficient way possible. Joint procurement is one of the key elements to more efficiently use taxpayers' money and more effective efficacy and interoperability.
The EDIP work program has two dedicated calls on common procurement, which is welcomed. But what other actions will you bring to the table to speed up joint procurement? How will the upcoming revision of the defense and sensitive security procurement directive serve the need for better and more transparent joint procurement? Thank you.
Andrius Kubilius
Yep. Okay. Thanks a lot for the very good question. Definitely, as I said, the geopolitical environment is changing quite rapidly. And the war in Iran is also changing, let's say, material, or what we can call the supply environment.
I would remind that till now, according to last statistical data, our governments were procuring around 40% of weapons from United States. Now, at least, what we can see from publicly available data during this war, United States spent around two sets of missiles and interceptors which they had in their stockpiles. I met recently with General Grinchavych, and also I was visiting Washington and met in the Pentagon in the war department with undersecretaries. It's easy to make a conclusion that really for the next several years, majority of what American industry will produce, especially in some of those areas, will go to replenish American stockpiles and Gulf Country stockpiles. So that's why we can make a very simple conclusion: on both sides of the Transatlantic, of both sides of the Atlantic Ocean, there is a shortage of production capabilities.
And we need to speed up what we need to do. And I said at the very beginning about how it looks like we are still behind what Russia is able to produce. So we need to outproduce Russia, first of all. Now, on supply chains, definitely, this is an issue. We look, you know, very carefully during our missile tour.
And joint procurement definitely has, you know, we are supporting both by regulatory measures and financial measures, but most important is, of course, political will on national governments' level. We need to work with that.
Do you have a reply?
Wouter Beke
Well, I think that there is a big responsibility for the member states, and by the member states for the protection of Europe as a whole. So I fully agree with the commissioner.
Okay. Agree with that one.
Giorgio Gori
You agree with each other. Yeah. Now I give the floor to Mr. Maniates for S and D.
Yannis Maniatis
Thank you very much, Mr. Chairman. I will speak in Greek.
Thank you. And I'd like to thank you on behalf of the Socialist and Democrats group for joining us today in the committee and to propose this new legislative proposal, AGILE. Now looking at the recent changes to the EDP program and its budget, could you explain how these programs may link up with the program that we're discussing today? Will there be a preference for companies that have already received financing from the defense fund? A further question.
What kind of safety valve do you have in place with regard to how money is spent, be this amongst the various businesses and then in terms of the geographical distribution of funds? In any event, this proposal is moving in the right direction, and I can say that I fully support the strict eligibility criteria that you have set, ensuring that the funding will solely go to European businesses. Nonetheless, I do not believe that the safeguards you've introduced are enough to make up for the investments that the EU is funneling into third countries. It's not just low prices that will guarantee the success of a program, and that's something we need to look at as swiftly as possible. Thank you.
Andrius Kubilius
Well, thanks a lot, really. A very good question. Well, first of all, I can repeat why we think that this agile is very much needed. It's, you know, we shall have with the whole palette, you know, for how to finance small and medium sized business. And especially agile here means what is, you know, in its title, agile.
To do, you know, funding with very quick procedures. We can learn a lot from Ukraine how they are doing that and really, now to give grants which would allow some of those small and medium sized enterprises to scale up to the level of, becoming, you know, really successful, successful companies providing what is very much needed for the frontline. So that is, you know, again, very much related with the demands of our militaries. So on why we think that it's enough of safety inside of regulation on protecting money, you know, according to the eligibility criteria. First of all, definitely, have very clear criteria to know those companies should be established in European Union territory, Norway or Ukraine.
Ownership and control assessments performed randomly will also be. That is why now we shall see, what the companies if you will hear us no mistakes. And for companies established outside of eligibility countries like EU, Norway, Ukraine, but owned by eligible country nationals to relocate those companies to European Union again, it's very easy to control that, you know, development. But, of course, members of European parliament can add, you know, to that regulation some kind of better provisions.
Yannis Maniatis
Yes. Few seconds.
Commissioner, I understand that this program is intended to operate on a pilot basis. Given that negotiations on the European Competitiveness Fund will take place in parallel until there is a first evaluation of the program that we're discussing, the European Competitiveness Fund, that will already have been implemented. So my question is, how do you intend to ensure the effective integration and coherence between these two instruments in the European Competitiveness Fund and the Defense Fund as well? Well,
Andrius Kubilius
Definitely, we are creating here a pilot project, very important. And, of course, that will also influence our, you know, preparation for the next MFF. I think that we shall find a way to combine those two things with your assistance, of course.
Giorgio Gori
We don't have speakers for PFE, ECR, and the renewal groups. So I give the floor to Mister Stefan Uta for the Greens.
Nicolae Ștefănuță
Commissioner Kubilius, I'm here. As we know, wars are not only fought with guns, and we might have all the guns in the world and be starved out via energy. And my question is about that, because all of our citizens are very affected. Our economies are disrupted, are very undermined by what is happening in the Strait of Hormuz. And I come from Istanbul, and I would like to hear your opinion about the middle corridor, the so-called middle corridor, and to raise that attention of a good relation with the state of Turkey so that alternatives can be found so that we unlock the energy situation in Europe.
As you know, as Greens, we consider that for the long term security of Europe, we need to keep investing in renewables because if we make ourselves always dependent on foreign powers, on dictators, on third regimes, etcetera, we will always come back to this situation. And then regardless of what we do with the guns, the energy will kill us first. Thank you.
Andrius Kubilius
Well, definitely, you know, all of us, we understand what is a challenge and what are the problems with energy and supplies. European Union is maybe less dependent on supplies from, you know, the Gulf Region if to compare with other continents. But, of course, we are very much dependent on global energy prices. That's what we are facing. Also, as we hear now, for example, there is an issue with supply of jet fuel.
So, at least, that is what was publicly said by the International Energy Agency. We need to look into that. We are in college permanently working on, you know, and studying what is the situation. And next college, again, will have issues related with energy. Energy is also very much directly related with energy supplies, directly related with defense because definitely no different sorts of weapons, tanks, IPVs, and so on without, you know, or the same jets, you know, without fuel will not move.
That is why we put a lot of emphasis on that, when we presented military mobility package where all the logistics also is part of that. And, of course, we need to work even more deeply, you know, to build besides network of roads and railroads, network of logistical supply. So I cannot tell you directly about Middle Corridor or, yeah, don't know how it's called. This is not my direct responsibility. But definitely, we need to strengthen our security of supply.
And I agree with you that we need to become less dependent on our supplies from outside. And exactly, we shall look into the possibility of how to increase production of sustainable aviation fuels. Today, I have very good exchange with the community, which is working on that, so called zero zero emission aviation. So that's what we're doing permanently.
Nicolae Ștefănuță
Any follow-up? Yes.
I really would appreciate, commissioner, if I can have a follow-up in writing about this topic from somebody from your cabinet because I think it's really, really urgent. And as you said, we might develop drones, air capacity, etcetera, and then we will not be able to fuel them.
Andrius Kubilius
Absolutely agree. We can, you know, continue that very important discussion. And, Isaiah, you know, we can look for somebody to write to or we can meet, you know, and discuss. That's, you know, let's agree on some next steps.
Now Mark Bottenga.
Marc Botenga
Thank you very much indeed, Chairman. Thank you, Commissioner. I will be speaking French. Now you are the commissioner for industry and defense. And at other times, you've also explained that your role entails looking at the transfer of public money to the military industry, which is a very controversial one, not just because of the prices, but also because of the practices.
We have seen artificial price hikes so that public money can get into the coffers of that industry. We have heard the accusations with regard to shares and dividends where money is paid out to shareholders. And then there are all the corruption scandals as well, a big scandal at NATO on procurement, the scandal around the multinational Talis, which might indeed have infiltrated the UN in their favor. Then there's Leonardo, Ryanmetall as well. So my question to you is, in this framework, with billions being poured into that industry, into these multinational companies, and with all these controversial practices, you said that there is a very specific audit process and that it's very effective at EU level within the commission.
But my question is, how many audits have you carried out? And have you found instances of malpractice or any kind of dubious behavior around this? Thank you.
Andrius Kubilius
Well, thanks a lot for the very good question. I am now openly speaking with the industries. And last week, while I was speaking in said, I said that I see, you know, when we're traveling through all this missile tour, we see that problem that our financial investment into defense is scaling up more rapidly than production is scaling. And that is the reason why prices are increasing, waiting times are increasing, and in some cases, the value of shares is increased. And then definitely, our society, our citizens also have the right to ask, so what's the outcome of our investment?
And that is what I am concerned, and I'm speaking directly to the industries about that. So I hope that we can find, you know, an industry is raising, from their side some, you know, issues to us as politicians, as regulators that we are not, you know, doing everything what they need, long term visibility, long term contracts, joint procurement, you know, in order for them to have much more clear vision what they can do. So I hope that we shall find, you know, proper cooperation with the industries and national governments. Now on, definitely, you know, corruption needs to be fought with all the power of our legal instruments. All of this is one of those institutions which, you know, is doing a proper job.
And second, we have for court of auditors, which is ready to do their job. I had one of my first meetings when I became commissioner. I was invited to the court of auditors because they understood that, you know, bigger money is coming, and they will need to be properly ready to do their job. So I hope that really all of us together, we shall guarantee that transparency in the implementation of our very important programs will be also established. We need to invest in defense, that's for sure, but we need to do that in a proper way, in a transparent way with clear goals of what we need to achieve.
Marc Botenga
Thank you, commissioner, for that response. So there has been no formal audit, if I understand correctly, because you say you're going to put that on the agenda when you meet the business leaders. But if you ask them if they've been good, I'm sure they will say yes, it would be good to have a formal audit. I understand that there has been none so far. And secondly, coming back to what Mr.
Maniates said about eligibility of businesses like Antrim Defence in Greece that are owned by Israeli Aerospace Industries. Officially, they're Greek. They got money from the European Defence Fund. So would they be eligible according to the new eligibility criteria?
Andrius Kubilius
Yes. Look, we have regular audits on the grant management for our EU programs, and we shall continue. That is an established practice. The same with eligibility, definitely, that is no regulation that needs to be implemented. And whatever now is the case or story, we are investigating in a proper way.
All of those event, all of those possible mismanagement.
Giorgio Gori
Okay. Now we go with the second round. The speakers have one minute each, and we start with Mister Paolios Soudargas for EPP. Thank.
Paulius Saudargas
You, chair. Let me start by thanking Commissioner Andros Kobilius for his presentation and for his efforts in helping to wake the European Union up to the scale of today's geopolitical challenges. The challenge is enormous. It's not an adjustment. We're rather rebuilding Europe's defense industrial base.
Regarding the agile program, if we are serious about boosting Europe's defense innovation and keeping it up to date, then cooperation with Ukraine is essential, where innovation is battlefield-tested in real time. As far as I understand, the agile program is outlined in article 10 paragraphs one c and two and other places, effectively opens the door to this kind of synergy, supporting the development of products in Ukraine with their subsequent integration and production within the European Union. My second point is about space policy. World has entered the so-called new space era, where the sector is rapidly evolving due to private, commercially driven initiatives. Unfortunately, Europe is still lagging behind, particularly when it comes to launch capabilities.
The problem is that the EU is still operating in an old space era approach, a state-led model. How should we encourage this necessary transition to a market-driven space economy? Thank you.
Giorgio Gori
Now, it's up to me. I will speak in Italian, commissioner.
Commissioner, as you're aware, our work on the Space Act is underway. Now this is an ambitious and complex proposal, and our aim is to enhance the European aspect of this industry, making life easier for businesses, creating a level playing field with non-EU actors. But this exercise requires the involvement of those who will be dealing with these rules. So I'd like to hear from you your opinion on the possibility of setting up an industry board. This would actively cooperate with EU SPA with the aim of enhancing the regulatory framework before the Space Act comes into effect, making use of the existing parameters.
Now on the Competitiveness Fund, article 65 touches on access to space, and this is understood as launch capability. For we Europeans, this is an area which urgently needs to be improved. And so, in order to promote EU launchers, where in the value chain do you think we ought to focus our financial support?
Now I give the floor to Mister Michael Serba for APP.
Michał Szczerba
Good afternoon, dear commissioner. I'm coming back to the military mobility.
Our legislative package. I'm working as a reporter for the SADA.
Committee, Commissioner, especially Article 14 on the digital information system.
Michał Szczerba
Highlights the role of spatial data and related services, alongside interoperability and cybersecurity. As military mobility will increasingly rely on real time information, geospatial awareness and secure cloud solutions, this raises an important question. How critical do you see the integration of spatial data and cloud-based solutions for the effectiveness and resilience of the system, and for ensuring fast and secure mobility across Europe? Is the commission working on strengthening Europe's capacity to develop its own cloud infrastructure, including server technologies, as well as to expand the use of satellite technologies to support military operations? And finally, how will the commission make sure that these capabilities are developed within the EU as a strategic asset rather than depending on external providers?
Thank you very much.
Andrius Kubilius
Well, thanks a lot. Dear, Polish, it's good to speak English in between two or three. Yeah. Good. So agile really is very important in our, you know, I would say, in learning from Ukraine and doing a lot together with Ukraine.
And we are looking for new possibilities. Last year, we created Brave Tech EU in order for our startups to work together and to learn from Ukrainian Brave One cluster. Now agile is also, you know, some kind of Ukrainian type of how to support the industry for the needs of the frontline, I would say so. What armies are needed? So we shall really are looking into that as really something very important.
New space policy, absolutely agree. And we are preparing, what we call, space defense shield, communication of the space defense shield. I think that we shall also touch the importance of launching with new space players. Because what we need to understand is that besides, let's say, Kuru launching type, you know, what we have in Peru for big Ariana, six vehicles. We need to look also for microlaunching, especially when we're talking about space operations and defense of our space assets when we need to react in a very quick way.
So that I see as the field where really, you know, some kind of new things will need to come, but definitely also, let's say, traditional launching with reusable launches. It's in our agenda together with the ESA. European Space Act and Industry Board, well, I'm always very much in favor of having, you know, partners working together, whatever, you know, forms that can be done. We have regular industry dialogues. Now as I said, we are going with missile tour in order to understand better what is now for in the industry in the practical terms.
So for SpaceX, well, it's up to us to see, but, really, dialogue never, I never saw that dialogue can be controversial. We can look into that. In launching, where to focus? Very good question in an easy way. I would say, really, in, I would look into launching sites.
Kuru is one thing, which we need to look at how we can, you know, expand or to have more possibilities in Kuru. But second, definitely, to have also in EU territory developed launching sites for what I call micro launch. But also, I would look very much into development of European launching vehicles, new type of vehicles which are coming, and I hope that we shall be really good with that. Now on the solar and cloud, agree absolutely. And while I am talking with some militaries from our member states, some of them, chief of staff, you know, high ranking militaries, I think server and cloud now is the biggest issue and biggest challenge for them.
Where to put the data? And nobody wants to put the data into somewhere where, you know, some dependencies can appear, where you cannot guarantee that you are really owning that sovereign cloud. So, parliament did a very good job with the report on ADPCIs. And I remember that in that report was not report, but analytical study. And in that study, here was a very clear message that, for example, Surin Cloud could be one of those ADPCIs, which we are now working on.
So I am absolutely on the same page. How shall we do that? Who you know, that's next stage, but let's see, you know, for that as our goal.
Giorgio Gori
Thank you very much. Now we go with the third round, starting with Sofia Eriksson from SMB.
Sofie Eriksson
Thank you, chair. Thank you, commissioner. I will speak Swedish.
Well, first of all, thank you very much to the Commissioner for visiting Sweden last year. I know that you went to Karskoger, and you are aware that this is the biggest armament development in Europe in recent times. So thank you for that visit. So I'm wondering, how are we going to proceed? Because I think it's important, if we're going to invest throughout Europe, then the whole of Europe's defense industry needs to be involved.
We don't want the investments to land just in the biggest countries or the countries where the lobbyists are strongest because the money needs to be distributed at EU level. And sometimes, it ends up gravitating towards the biggest countries or those that have the longest corridors to Brussels. So how will you and we make sure that the defense industry is developed throughout Europe and not just in a small handful of countries? Thank you.
Matej Tonin
Thank you very much, dear commissioner. I think it's a good opportunity to thank you for your committed work. We are glad to have you. I would like to return to the strategic compass, which the European Union accepted and confirmed in March 2022. It's a long time ago, but at that time, the key pillar, the main achievement was so-called EU rapid deployment capacity for ready response forces in numbers of 5,000.
There were some timelines when this should be fulfilled. We all know how this is strategically important. Can you at least brief us on what is the state of play currently with the strategic compass, especially on your rapid deployment capacity?
Rudi Kennes
Thank you. I will speak in Flemish. Jakobi Saris at the Agile Programme. Thank.
thank you very much. The Agile programme provides for four months between the end of the call and the allocation of funds. This is about weapons systems, and there is an evaluation procedure for national parliaments of eight weeks, which is forgotten just to see whether the ethical standards have been complied with. And we've seen that there's often abuse of drones without there being any liability. So what guarantees has the commission provided for the technologies in this program respecting international standards and ethics?
And how will you ensure that responsibility is borne? And secondly, why is the innovation cycle in Ukraine being used for military goals in Europe? Ukraine is at war, but as far as I know, the EU is not. So why would we drop control processes? There's no reason for that.
How is the commission trying to satisfy that and avoid these controls on military programs?
Yes.
Eero Heinäluoma
Thank you, mister chair, and thank you, commissioner, for being here. Two questions from my side. Due to the proximity of Russia, we know that border regions and border countries, eastern border countries, are really having a crucial role in defense production and activities. Investing in deterrence, defense, and security in these countries is really crucial for all of us. I would like to ask you, how do you plan to prioritize the needs of the Eastern border countries in your upcoming proposals this year?
And the second question, Berzyn Zelenskyy said yesterday that Europe needs its own European defense system against ballistic missiles. Can you give any information on this item to us? And what are the production possibilities for creating this kind of defense system against ballistic missiles?
Andrius Kubilius
So how to, yeah. It's the first question, really. It was well, first of all, I was very happy to visit Sweden and very much impressed by what Sweden is doing in defense and the defense industry. A lot of new things, automatization, and then things like that. So that was really a perfect evidence that, well, Sweden is a big country, but not the biggest.
But really, we're able to develop the defense industry and that can be inspiration for everybody else. On our practice, on our experience, really, we can see clear evidence that there is already strong geographical spread in new defense programs. And for example, in the EDF, SMEs represent 43% of participants and are present across all member states. And, you know, if you look into other programs, we see also quite equal, you know, distribution. So, what is important now for the countries really is to be active in the development of their defense industry.
We cannot, you know, develop industries if governments are not very active. But we can support with joint procurement. SMEs can be included into real chains of supply for big primes. That is again activity, which can be very much encouraged by SMEs. So there are a lot of things which can be done, but always we are looking clearly that there would be not some kind of monetization of financial assistance, and that's our task.
Now the rapid deployment capacities. Of course, this is not my direct portfolio. It's for years, for Kayakalas. But what I see as really important for us to understand is that this is a bigger question besides what was decided in strategic compass. Because if we are seriously taking into account, so called NATO three zero strategy, which is proposed by United States, then we need to understand that perhaps we shall face a disable diminish both material strategic enablers, but also the, you know, military personnel presence on European continent, which is playing very important role.
What some experts are saying, you know, they're playing the role of rapid reaction force, which in our European continent is one of, you know, specific capacities what Americans, you know, cohesive military force is able to do. So we shall need to find the way and to answer the question, how shall we replace it? And that's, you know, for us, for politicians, to find the proper answer. Now, on ethical standards, I would say very clearly, you know, we have very clear regulation, prohibition to support the development of products and technologies prohibited by international law. So it's so-called prohibition prohibited to no weapons.
That is everywhere written down and implemented. But in general, I would, you know, when you are comparing us with Ukraine, I would again remind the old Latin saying, if you want peace, prepare for war. The numbers which I named to know, as a very beginning, how much Russia is outproducing us. In my view, such a situation when we are allowing Russia to outproduce us is, you know, we are creating temptation for Russia, for Putin regime to test us. So that's what we need to understand, and that is why I am calling everybody to look at how we can outproduce Russia.
Border countries, definitely, this is, you know, a very, very special case. Council not once said that though the region, the countries of this region, deserve, you know, to have a special treatment both from a military point of view and from economic and social support. I know that the ministers of that region, finance ministers, are gathering exactly in Vilnius on Friday. I will be talk with them together. We need to see that as our common task.
And, for example, very important is one of the APCIs proposed by regional countries, Eastern Flank Watch, which I think really is one of those instruments where we can show strong solidarity.
Giorgio Gori
Thank you. Thank you, commissioner. Now we go with the KHDI. The first intervention is for Thomas Pellerin, S and D.
Thomas Pellerin-Carlin
Dear mister commissioner, Kobilius, dear colleagues, I just want first to underline that there is not a single PFE member in this room. And so when those people who come, they've who call themselves patriots and tell us that they care about defense, we see today how much they care about defense. There is none, not a single one of them here, even if there are 100 of them in this parliament. I've got a very specific question on aviation fuel. The illegal war that Trump started with Iran reminds us of how easy it is to disrupt the jet fuel supply chain.
Today in Europe, we import 97% of our oil, and also a lot of jet fuel that is manufactured from oil. We know that in case of a direct military confrontation with Russia, Russia may attack the oil tankers that are set to go to Europe at a moment where our military, but especially our air forces, will actually need much more liquid fuel to be able to defend our freedom. So the solution for European sovereignty is clear. We need to manufacture jet fuel in Europe. And to do that, the only way we can do that is through sustainable aviation fuel, so we can manufacture them using European agricultural products to manufacture biofuels or use European electricity that we have in abundance for electrofuels, like what Inneratec is doing in Frankfurt with the financial support from Heinemann for the benefit of the Bundeswehr.
Last week, with a coating of mine from DPP, the general Pekka Toveri, we organized an event on this very topic of e-fuels for the military. So commissioner Kobelios, I've got two precise questions. First, can you confirm that DG DEFIS is working with Digimove, DG Klima, DG Grow, DG Ener to ensure that we have a domestic biofuel and a domestic e-fuel manufacturing base for aviation, not for cars, but for strategic military aviation? And second question, I was wondering if you had already started to ask defense ministers to act more proactively and become either the off taker or the buyer of last resort of the biofuel and if fuel we can manufacture in the EU. Thank you.
Niels Flemming Hansen
Thank you very much. My question is along the same line here. The first F-35s were tested last year, flying on 100% SAF, and that shows that the technology is available, and that the defense sector can also play an important role in the green transition. My question is, therefore, will the Commissioner use your significant purchasing power and strategic leverage of the defense sector to actively support the scaling up of SAF production in Europe so that the cost can come down not only for military aviation, but also for the benefit of civil aviation? And secondly, is the commission in dialogue with NATO and allied partners on how defense demand for SF SAF could help accelerate production, strengthening energy resilience, and support Europe's wider climate ambition.
Thank you.
Thomas Geisel
Geisse. Finland, I've been
Thank you. I'm a member of the budget committee. Commissioner, you pointed out that considerable funds.
Thomas Geisel
Provided for in the MFF and the budgets in order to encourage the European defense industry to cooperate better together. And from an organizational point of view, there are these larger companies in Europe. And you also said that the defense industry is very profitable because the demand is increasing. Remember the 5% goal that NATO partners agreed on. So I'm wondering, is it really necessary to financially support the European defense industry to this extent, because the industry is working within a well-functioning market.
And if competition rules are weakened to benefit the interests of the European defense industry, we could see defense champions developing. So, is it really necessary? Given that the industry is so profitable anyway, does it really need to be supported in addition to that with the money of the European taxpayer?
Giorgio Gori
Thank you. And now, Commissioner, you have the last three minutes for your answer and concluding remarks.
Andrius Kubilius
Well, thanks a lot for our first questions, two questions on aviation fuels, jet fuels, you know, because I understood that both questions are on the similar topic. So I will try very briefly to answer. Exactly, you know, before coming here, I was in an interesting event, important event organized by our control and where so-called special group as air, if you know which mission aviation.
Zero emission aviation,
Andrius Kubilius
You know, network. That's let's say, called so, you know, which was, as I understand, established by deficit by our, you know, team presented a special report exactly about development of zero emission fuels and aviation with long term vision, but nevertheless, you know, exactly answering the question, how we can become much less dependent on, you know, the fuels, which we are importing from other countries. And definitely, biofuels, electricity, hydrogen, is that what is, you know, what we need to push forward. Now, in the college, as I said, forthcoming college on Wednesday, we shall have again big package about energy because that is, of course, very important, very important topic. I know you mentioned our purchasing power, big one.
I do not feel that we have such a big power in remaining, you know, funds for the European defense industry program, what we have. But definitely, we need to look and we shall look, you know, how we shall definitely how we shall solve some of those problems, which now are becoming urgent. And definitely, we shall work together with other DGs and also consult with NATO in order to avoid any kind of real crisis. Now, defense industries and, what we are supporting, I would say, let's not forget that our biggest support, and at the moment, for example, is for the governments, not for the industries. Safe loans are for the governments to procure weapons, which are needed for their capabilities.
Now forthcoming, I hope that it's forthcoming clearly, 60,000,000,000 Ukraine support loan also is for the Ukrainian government to procure weapons. So, definitely, contracts are coming. And, for the industries, they are, you know, producing what is needed. But, again and again, I will repeat that our funds are used, first of all, to support cooperation between member states in, you know, for joint procurement, but also in between industries, for big projects, for derisking investments. Because in some cases, we need to see that for the time being, we are not producing at all some weapons.
And that is what, you know, we need to take into account. And we need to ask, because there is a risk that, you know, in some cases, our incentivizing, like it was done, for example, with the SAP program. When, you know, back in 2023, it appears that we are producing, the whole European Union is producing only 300,000 artillery shells per year. And we were going to support Ukraine, but we have nothing to provide to Ukraine. We used a sub program, which everybody, governments and industries are considering that was very successful.
And now we have production of 2,000,000, and a subprogram was very limited. It was several €100,000,000. So it means that, really, we can bring added value, and we shall continue to do that. Because again, if we shall not do our job, if we shall not find a way how to incentivize both member states to spend their money in a prudent way, and also if we shall not incentivize industries to produce what is very much needed, we shall face bigger problems.
Giorgio Gori
Okay. So we have concluded our structured dialogue. I want to thank all colleagues that have done the contribution, and especially you, commissioner, for your kind availability to be here with us. You are always welcome, so come back very soon. Thank you very much.
Thanks a lot. Ready to come.
Giorgio Gori
We don't have any other business, and I want to confirm to you that the next meetings will be taken in Brussels, in May. Thank you very much, and have a good day.
Day. Okay.
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