Since Russia’s 2022 invasion of Ukraine, the need for Europe to increase its stockpiles of large-calibre ammunition, notably for 155 mm howitzers, has demanded greater manufacturing capacity, with the requirement for expanding and securing subcomponent supply chains. The recognition of a chokepoint around energetics has helped to drive commercial and political strategies in Europe, with the unlocking of investment capital from government organisations aiding in the expansion of existing capabilities.

The signing of a letter of intent between the UK’s BAE Systems and Poland’s Nitro-Chem on 27 July 2026 to develop production of energetic materials in the UK is the latest in a wider trend to diversify and expand the supply base for a key component of large-calibre ammunition. The signing of the deal between the two organisations is part of a wider technology sharing across Europe to support the large-calibre and complex weapons supply chain by increasing the energetics manufacturing base.

The agreement also signals a major shift for Nitro-Chem’s parent company, MESKO, as it expands its capabilities in the munitions sector, following on from deals with the Czech Republic’s CSG Group to transfer knowledge and technology for 155 mm modular propellant charges. Additionally, a joint venture with France’s Eurenco in October covered the expansion of the company’s production lines in Pienki and manufacturing Eurenco propellants. While these agreements are supporting Polish independence in artillery manufacturing, the ability to assist broader European initiatives and proliferate energetic technologies will help to increase security of supply across the continent.

Building supply chain resilience

Within Europe the number of energetic suppliers that can operate to NATO standards has been limited. Companies such as BAE Systems, Chemring, Rheinmetall, Eurenco and Nammo have been the traditional suppliers, while companies such as CSG Group and PGZ have begun to expand their capabilities in the sector. As market demands have rapidly increased since the 2022 invasion of Ukraine, the need to expand and expedite production has become pressing.

Collaboration has been a key characteristic of capacity building, particularly as firms like Eurenco have partnered with other energetics producers to enhance their manufacturing capabilities. Companies in the region have also worked to increase investment in their production facilities and geographic spread. Germany’s Rheinmetall announced plans in July 2026 to double the capacity of its Aschau powder plant and has also been building a site in Hungary, leveraging production knowledge from its joint venture with Denel in South Africa.

Regional initiatives

Political support for the ramping up of ammunition production has been notable, particularly for 155 mm howitzer shells. However, without the corresponding increase in energetics manufacturing, the delivery of ammunition that is ready to fire is limited.

The European Union has responded to the need for rearming Europe with munitions, announcing a raft of funded initiatives since 2023. The 2023 Act in Support of Ammunition Production (ASAP) was launched with an overall budget of more than EUR 500 million aimed at producing two million 155 mm artillery shells per year, with EUR 248 million earmarked for propellant powders and EUR 124 million for explosives production. Recipients, including Eurenco, Nammo, Rheinmetall and Nitro-Chem, have been granted funds to support technical development and expansion of their facilities covering propellants and explosives.

Other notable programmes include the 2025 European Defence Industry Programme, which dedicated EUR 166.4 million of a EUR 1.5 billion budget to energetics manufacture for work in 2026 and 2027. The 2025 Security Action for Europe (SAFE) funding mechanism, supporting the delivery of the EU’s EUR 800 billion Readiness 2030 plan (formerly the ReArm Europe Plan), is facilitating long-term loans, with a total value of EUR 110 billion aimed at supporting a range of technological capabilities from ammunition to cyber security and artificial intelligence. In order to improve European resilience and increase subsystem demand, a stipulation of the loans is that no more than 35% of component costs can come from outside the EU, EEA-EFTA or Ukraine.

Outlook

Continued collaboration to exchange manufacturing technology and best practices will be a fundamental requirement in supporting the need for more energetics and explosives supply in Europe. Funding mechanisms in place from the EU will enable this expansion, mitigating the fiscal demands associated with the expansion of manufacturing capability. Collaboration will help to remove stovepipes in manufacturing capacity while also ensuring that high standards can be achieved in the final product.