Thales, Leonardo, Airbus lead rankings in European Defence Fund grants, Science|Business finds

A new ranking compiled by Science|Business shows three big multinationals – Thales, Leonardo and Airbus – have been winning the lion’s share of research and technology development grants from the European Defence Fund.

Since 2021, Thales of France has been the biggest winner of the agency’s grants, collecting €121 million for its participation in 70 projects – including €30 million for its Thales SIX GTS France unit specialised in communications and transport security. Italian defence contractor Leonardo ranks second, with €114 million in EDF grants. Third is aerospace giant Airbus, with €95 million.

The Science|Business analysis of grant awards published on EDF’s website shows that, altogether, those three companies have won 21% of the agency’s awards since 2021 – a powerful demonstration of their position in the European defence marketplace.

Some public research organisations have also benefited, but Germany’s Fraunhofer is the only one that breaks into the top-ten ranking. Lower down the awardee list are France’s energy-research agency CEA, and Dutch research and technology organisation TNO. To create the ranking, Science|Business gathered public data released by EDF and analysed the project awards. When shown the results and asked for comment, a Commission spokseswoman said, “we have no further information available”.

Boosting defence R&D

EDF was launched in 2021, after an earlier pilot phase from 2017, to boost pan-European cooperation in defence research and technology development – and the agency’s political importance today is rising, with two wars underway in the European neighbourhood and geopolitical tensions mounting across the globe.

Out of its €8 billion budget for the 2021-2027 EU finance framework, €1.6 has been allocated to 93 projects so far. It has yet to announce winners of its most recent 2023 call for grant proposals. But this March it published its work programme for 2024, describing the kinds of projects on which it plans to spend €1.1 billion.

The EDF was created from the  merger of two smaller EU programmes intended to strengthen defence through greater EU-wide cooperation on military research and technology development. Its priorities reflect the national defence needs of the member states, and range from cybersecurity to command and control systems, and from space to underwater defence technologies. In most cases, to get funding a project has to involve at least three organisations from three EU member states, plus Norway. In all, 791 organisations have received EDF grants so far.

Industry leads

It’s no accident that multinational defence contractors are the biggest grant recipients, given that the bulk, €5.3 billion, of the agency’s budget through 2027 is aimed at relatively late-stage technology development and prototyping that usually require the scale of a big company. Further, for product prototypes to get funded, member states have to intend to purchase or collaborate on the finished product. And in defence contracting, big companies also often get an edge from the deep and long contractual histories they have with their national defence ministries.

Earlier-stage research is a more open game, including grants targeted at small companies and what the EDF calls “innovative disruptive technologies.” Research Actions have been budgeted at €2.7 billion of the €8 billion, seven-year budget.

Since 2021, the biggest EDF projects have been FAMOUS2 led by Patria Land of Finland, and ODINS EYE II led by OHB System of Germany, and are continuations of projects begun under the EDF’s predecessor programmes. FAMOUS2, with €87 million, is focused on maximising synergies, and standardisation and interoperability of armoured vehicles. ODINS EYE II at €86 million aims at improving sovereign solutions for early detection and tracking of ballistic missiles, hypersonic gliders and missiles.

Here’s a closer look at the top grant winners:

Thales (France) – Funding received: €121 million; Projects involved: 70

Thales’ biggest single project since 2021 is EuroHAPS, to develop a new air surveillance and communications plane – or, in the industry jargon, High Altitude Platform System. Of the €43 million Development Action funding, two Thales units were awarded €16.5 million; other major partners include ESG Electronic System and Logistics Group from Germany and Italian aerospace research centre CIRA. The project is being conducted with the support of six defence ministries: France, Italy, Spain, Germany, Hungary and the Czech Republic.

Leonardo (Italy) – Funding received: €114 million; Projects involved: 32

Leonardo’s biggest project, ENGRT, is focused on breakthroughs in on EU military helicopters. Airbus is the coordinator of the €35 million project, but Leonardo gets the biggest share of the money: €13.6 million. The project is a Research Action, and includes  the Politecnico di Milano and German aerospace centre DLR. Authorities of France, Germany, Greece, Italy, the Netherlands, Spain and Sweden are involved.

Airbus (France) – Funding received: €95 billion; Projects involved: 29

A big Airbus project is EICACS, a €70 million Development Action to ensure the interoperability of EU combat air systems. The coordinator is France’s Dassault Aviation, but two Airbus units in Germany and Spain get combined funding of €13.2 million. Other partners include Saab of Sweden, Leonardo and Thales.  

One could say Leonardo made the most of its EDF involvement, as it participated in fewer than half as many projects as Thales (32 against 70), but still ended up with total grants only €7 million less than Thales. In terms of making the most out of participation, Baltic Workboats of Estonia is the clear winner. By coordinating the EUROGUARD project, focused on naval vessel fleets, it managed to receive €18 million, putting the organisation in the top-15 grant receivers.

Industrial players are the main beneficiary of EDF projects so far, occupying nine of the top ten spots in the ranking for most money received. After Thales, Leonardo and Airbus, other companies in the top ten are Indra Sistemas of Spain, Saab of Sweden, Rheinmetall and Kongsberg of Germany, Safran of France and OHB of Germany.

Among public research organisations, Fraunhofer ranks highest with a total of €24 million awarded. Its biggest project, AGAMI_EURIGAMI, is developing gallium nitride semiconductor technology and components. France’s CEA comes next, with €18.4 million; then TNO of the Netherlands with €14 million. The first educational institution to appear in the ranking is Belgium’s von Karman Institute for Fluid Dynamics, receiving €5.3 million so far.

Looking at the funding awards by country, France, Germany, and Italy lead the pack with 50% of EDF funding directed towards organisations in those countries. Spain, Sweden and Greece follow.