Luigi Scazzieri and Ondrej Ditrych / Oct 2026
Image: Shutterstock
The strategic case for closer EU-Ukraine defence industrial cooperation is very strong. In its struggle with Russia, Ukraine has developed unique technologies and know, and extensive experience. Harnessing these capabilities will strengthen Europe’s own defences. At the same time, Ukraine needs European financing, and access to European technology and markets. The latter will be especially important if there is a ceasefire.
EU-Ukraine defence industrial cooperation is already moving from a logic of support to one of partnership. Following Russia’s full-scale invasion in 2022, European support initially took the form of arms deliveries. Later, Europe’s focus broadened to financing production in Ukraine. Over the past year, the relationship has increasingly evolved towards one centred on industrial cooperation and integration. However, the transition is not complete. Crucially, much existing cooperation consists of maintenance and production of existing systems rather than joint development.
The partnership is driven both by governments and by an emerging network of industrial partnerships linking Ukrainian defence companies to their European counterparts. Many European firms have established maintenance or production in Ukraine, such as the ammunition production operation set up by the Czech company CSG with Ukrainian partners. Industrial integration is also proceeding in the opposite direction. For example, Ukraine’s Fire Point is establishing production for rocket propellant in Denmark. European governments and companies have been reluctant to localise advanced production in Ukraine, but that position is beginning to shift. In July 2026, France authorised licensed production of SCALP missiles in Ukraine, while France and Italy authorised licensed production of Aster 30 air-defence interceptors1.
Joint capability development is gaining momentum, with Europeans increasingly seeing Ukraine as a contributor of technology and know-how. Several European governments, including Germany, France and Denmark have concluded agreements with Ukraine focusing on joint development and production of capabilities such as drones and air defence systems. Perhaps the most ambitious example of this new trend is Project Freya, which emerged in July 2026 as a potential flagship project for a ten-country anti-ballistic missile coalition including Ukraine.
Nevertheless, significant obstacles could prevent these initiatives from developing into a durable partnership. First, physical risks are real: production facilities in Ukraine are exposed to Russian attack, while sabotage is a risk for companies operating in Europe. Second, both European and Ukrainian companies and governments are often cautious about transferring sensitive technology, and export controls can complicate the movement of technology and components.
Third, there are big differences in terms of regulation and permitting: Ukraine is at war and its companies are able to develop, test and modify products at exceptional speed with limited regulation. Conversely, European firms have to work with demanding safety, environmental and permitting requirements. These differences can generate delays and frustration. Fire Point’s difficulties in establishing its Danish facility demonstrate how costs and regulatory requirements can slow high profile projects.
Finally, deeper cooperation requires substantial investment. Ukrainian companies with combat-proven products may still lack the certification and relationships needed to sell to European armed forces. At the same time, European companies considering production in Ukraine can lack certainty about procurement, export permissions and the allocation of output during wartime.
Policy cannot eliminate all of these risks, but it can mitigate many of them. For example, the risk of damage to production facilities in Ukraine is equally real, but financial support in the form of insurance could help strengthen the case for investment. Export controls are a real challenge but there should be scope to find win solutions that blend European and Ukrainian technology. In terms of regulation and permitting, Europe will never be able to match Ukraine’s wartime speed of permitting and setting up production, but it can move faster.
In most of these cases, the levers lie within governments, in Ukraine and in the EU. At the same time, companies also need to be able to reach agreement on issues like technology sharing, intellectual property. The EU can help address some of these challenges. The Union already has a substantial toolbox to support Ukraine’s integration. For example, Ukrainian companies can participate in EU instruments such as the European Defence Fund (EDF) and the European Defence Industrial Programme (EDIP). By involving Ukrainian firms in its defence funding projects, the EU can help plug them into European networks and procurement systems. The EU is already taking on a major role in fostering cooperation by bringing companies together and facilitating partnerships, for example through the Defence Innovation Office in Kyiv.
More EU funding could help de-risk investment in production facilities in Europe or Ukraine. For example, the EU could provide dedicated funding to support joint development and production through the Ukraine Support Loan. The EU could also help design financing packages combining Member State support, EU funding and private capital.
The strategic momentum behind the EU-Ukraine defence industrial relationship is real. But ultimately it will be case-by-case decisions by governments and companies that determine its speed and depth.
This piece is based on the EUISS Brief Building together: How Europe and Ukraine should deepen their defence industrial partnership.
