Sweden has earmarked 500 million kronor ($53 million) to co-finance projects seeking EU funding to expand production of critical ammunition inputs.
The funding is available under the 165-million-euro ($193 million) European Defence Industry Programme Energetic Components initiative, which aims to strengthen European production of gunpowder, explosives, and other key ammunition components.
Sweden has selected project applications from EURENCO Bofors, Sweden Ballistics (SWEBAL), Norma Precision, Nammo Sweden, and JUNGHANS Microtec.
The projects include efforts to expand production of propellant charges and fuzes for the Archer artillery system, as well as fine-caliber ammunition and explosives.
EURENCO Bofors and SWEBAL are involved in energetic materials, Norma Precision and Nammo Sweden in ammunition production, and JUNGHANS Microtec in artillery fuzes.
“If the EU invests 250 million kronor ($26.46 million) in a Swedish project, the state matches it with an equal amount, while industry covers the rest,” Swedish Defence Minister Pål Jonson said on social media.
“The funds will both boost capacity in existing factories and contribute to new production lines.”
To Unlock Critical Input Supply
At least 24 new explosives and propellant projects are now under way across the NATO alliance as countries seek to address bottlenecks in the supply of materials needed to expand ammunition production.
Increasing production of these inputs requires significant time and investment, with manufacturers needing specialist facilities, secure feedstocks, environmental permits, and qualified chemical engineers.
Rheinmetall is investing 650 million euros ($750 million) in propellant powder and precursors, including 350 million euros ($404 million) at Aschau, where output is expected to reach 4,200 tonnes annually by 2028. Poland’s Nitro-Chem plans to double TNT capacity to 20,000 tonnes annually, but the expansion will take three to four years to come online.
Critical ammunition inputs, or energetic materials, include explosives such as TNT and RDX, as well as propellants such as nitrocellulose, which can be produced from cotton linters.
“Europe has historically relied on imported supplies, including from China, which means a shortage several stages removed from an ammunition factory can constrain shell production,” SWEBAL CEO and co-founder Joakim Sjöblom told The Defense Post.
European manufacturers are therefore developing alternative sources, including wood-pulp-based inputs sourced from Nordic forests.
Before the latest government investment, SWEBAL had received 400 million kronor ($42 million) to complete its TNT plant in Nora, which is planned to produce around 4,500 tonnes annually by 2028.
Swedish Model
Sweden’s commitment illustrates how national governments can use EDIP to translate EU funding into industrial capacity. By matching European funding with national support, governments can reduce the financial risk of investments in costly upstream production.
“For areas such as explosives, propellants and other critical inputs, where new capacity requires significant upfront investment and long lead times, that is a necessity if Europe wants to build the industrial depth needed for sustained defence readiness,” Sjöblom said.
“Co-investment also gives industry greater confidence that demand will remain there long enough to justify those investments. Multi-year procurement contracts give suppliers the confidence to commit capital to new production, while faster permitting and better access to energy can shorten the time it takes to bring new capacity online.”