European Environmental Bureaucracy Is Hindering Defense Industry Development

Bureaucratic barriers of the European Union in the field of environmental regulation are hindering the development of the defense industry and preventing it from ramping up production.

Thierry Francou, CEO of the French gunpowder company Eurenco, stated this in an interview with Euractiv.

“We are operating under peacetime regulations,” he noted, adding that the current planning rules in the EU do not meet the needs of the defense sector amid rapidly growing demand.

Amid billions in investments in new production facilities across Europe and high demand for missiles and shells, the European defense industry is struggling to keep up with the volume of government orders.

Francou’s attempt to ease regulations only highlights the dilemma Europe faces: how to expand defense capabilities without compromising environmental standards developed over many years.

Eurenco recently reopened a gunpowder production plant in Bergerac, France, which had been mothballed since 2007. The decision was made to strengthen domestic arms production in France and streamline the company’s supply chains.

However, launching new production lines is proving to be a difficult task, not least because of the strict regulatory constraints imposed by the EU.

The current regulations aim to protect wildlife and prevent pollution and industrial accidents related to the use of explosive materials.

Eurenco is one of Europe’s leading gunpowder manufacturers, supplying products to companies such as Sweden’s Saab and France’s Thales. The company operates plants in France, Belgium, and Sweden, and has received €47 million in subsidies from the European Commission under the ASAP initiative (Act in Support of Ammunition Production).

According to Francou, Eurenco plans to increase gunpowder production at its Bergerac plant to 1,200 tons yearly, with a further ramp-up to 1,800 tons.

However, these ambitious plans are being slowed down by the need to comply with the SEVESO III directive, which regulates safety at sites with a high risk of industrial accidents.

The defense industry is critically dependent on chemicals, particularly nitric acid used in ammunition production. But Francou emphasizes that excessively strict regulations have already driven many chemical manufacturers out of Europe.

In March, Militarnyi reported that European politicians, defense industry representatives, and the banking sector are calling for an urgent review of rules and procedures to accelerate funding for arms manufacturers.

Deals are being blocked due to internal banking regulations that do not align with current political challenges.

The European banking system has traditionally viewed arms manufacturers as high-risk clients or failing to meet environmental, social, and governance standards.