Europe’s increased defence investment creates an opportunity to rebuild the industrial foundations on which those capabilities depend.
In 2025, defence spending by EU Member States reached €418 billion, a 20% increase on the previous year. The European Defence Agency projects that it will rise to €454 billion in 2026.
Europe is spending more on defence than ever before. But this cannot guarantee access to the components, materials and manufacturing capacity on which defence readiness depends. Increased budgets must translate into the industrial capacity needed to deliver, maintain and replenish the capabilities Europe’s armed forces require.
This means looking beyond procurement and considering how to secure the industrial foundations of the region’s defence capabilities. Europe should explore rebuilding selected manufacturing capabilities at home, strengthening industrial supply chains with trusted partners and making better use of materials and components that are already in circulation.
Defence readiness as industrial supply chain resilience
Modern defence systems depend on complex supply chains spanning batteries, electronics, semiconductors, specialized metals and advanced manufacturing. Even equipment assembled in Europe can rely on critical inputs produced or processed elsewhere.
The International Energy Agency’s (IEA) Global Critical Minerals Outlook 2026 highlights the risks created by concentrated supply chains and export controls that affect both critical minerals and the technologies used to process them. Such vulnerabilities extend beyond energy technologies to the broader industrial ecosystem, including advanced manufacturing and defence.
Recognizing this challenge, the European Commission’s Readiness Roadmap 2030 identifies securing defence supply chains and reducing critical dependencies in raw materials and other inputs as priorities.
The question is not simply whether Europe can afford to buy the equipment it needs. The industrial ecosystem must be able to deliver it at scale, maintain it over time and replenish supplies when demand rises or external supply chains are disrupted.
Strategic autonomy does not mean self-sufficiency
Europe cannot realistically produce every component or process every raw material it needs within its borders. Nor would complete self-sufficiency necessarily be economically sensible. The objective should instead be to distinguish between dependencies that must be reduced, those that can be diversified and those that can be managed through cooperation with trusted partners. This requires a more deliberate approach to industrial policy.
Some strategically critical capabilities may need to be developed or expanded within Europe. Others can be secured through partnerships with countries that share compatible security interests, supported by diversified sourcing, coordinated investment and reliable long-term supply arrangements.
Cooperation also matters within Europe itself. The Commission’s roadmap sets objectives for greater joint procurement and increased investment in the European defence technological and industrial base. NATO’s updated Defence Production Action Plan similarly emphasises demand aggregation, industrial capacity and the security of critical supply chains.
This is an opportunity to build networks of complementary industrial capabilities rather than simply reproduce every capability in every country. But there is another dimension to resilience that deserves greater attention: reducing the need for new materials and components in the first place.
Circularity across industrial supply chains
Industrial resilience is usually discussed in terms of where materials are extracted, components are manufactured and products are assembled. Less attention is given to what happens throughout subsequent lifecycles.
Repair and refurbishment can extend the useful life of equipment and reduce the need for replacement. Where technically and operationally appropriate, component recovery can preserve value and reduce demand for new parts. Recycling can return strategic materials from batteries, electronics and other products to productive use.
These approaches cannot eliminate Europe’s dependence on primary raw materials, and recovery is not always technically or economically feasible. Defence applications also require stringent standards for safety, reliability, traceability and information security.
Nevertheless, the potential is significant. The IEA identifies recycling as an increasingly important contributor to future mineral supply, while highlighting the need for investment in collection and processing infrastructure. For Europe, this suggests that resource recovery should be considered alongside mining, processing, manufacturing and procurement in strategic supply-chain planning.
The relevant infrastructure need not serve defence alone. Where requirements overlap, investment in materials processing, electronics recovery, battery recycling and specialized manufacturing can support a wider industrial ecosystem. This means identifying where shared civilian and military applications can strengthen resilience for both.
There are three priorities for policymakers:
1. Map strategic dependencies across entire supply chains
Governments should identify critical materials, components and processing capabilities, including upstream dependencies that may not be visible in direct supplier relationships.
This would help distinguish where domestic capacity is essential, where trusted partnerships offer greater resilience and where substitution or recovery could reduce exposure.
2. Make lifecycle resilience part of industrial and procurement policy
Procurement decisions should consider not only acquisition costs and delivery times, but also maintainability, repairability, component availability and access to replacement materials.
Predictable demand and coordinated procurement can help give industry the confidence to invest in the capabilities required.
3. Integrate circularity into strategic-material planning
Governments and industry should identify opportunities to extend equipment lifetimes, recover usable components and return valuable materials to supply chains.
This would require investment in appropriate infrastructure, technical standards and traceability, alongside security safeguards and realistic assessments of recovery potential.
Circularity cannot replace secure sourcing or new production capacity, just as domestic manufacturing cannot eliminate every external dependency. Their value lies in combining them into a coherent resilience strategy.
Industrial supply chain readiness in Europe
Europe’s increased defence investment creates an opportunity to strengthen more than its immediate military capabilities. It can also help rebuild the industrial foundations on which those capabilities depend.
That means deciding what Europe must produce itself, what it can secure through trusted partners and how it can retain and recover more of the materials and components already available.
And Europe does not have to manufacture everything within its borders. Strategic autonomy means taking a deliberate approach to managing industrial supply chain dependencies and sustaining critical capabilities when conditions change.
The measure of defence readiness is not simply what Europe can buy today, but what its industrial system can continue to deliver tomorrow.
