Europe's first direct defence equity route opens as new EU funding pipelines take shape

20 July 2026 · Strategic Funding Partners

Published 20 July 2026 · SFP Pulse · Weekly Research

> The EU opens its first direct equity route for defence scale-ups, while ETS reform, the AGILE programme and a new cyber-AI plan reshape the autumn funding pipeline.

This week the direction of EU funding is unmistakably towards defence, clean industry and digital resilience. The European Innovation Council has opened Europe's first direct equity route for defence scale-ups, worth €10M to €30M per company, and the Commission has set out a wave of policy that will shape the next generation of calls, from a targeted ETS revision and an Electrification Action Plan to a new cyber and AI action plan. The recent EU and Ukraine agreements are increasing attention on credible European defence partnerships, and for organisations that need to build or join a consortium, Proposal Builder Plus is the natural SFP route to prepare. Here is what matters this week, and what you can do with it.

Top News

If you want a focused, strategically aligned shortlist of the most relevant calls for your organisation, SFP Analysis maps the EU funding landscape against your business strategy.

EIC opens Europe's first direct defence equity route, €10M to €30M per company

The EIC STEP Scale Up scheme provides growth-stage investment to European deep-tech companies, and it has now added a dedicated defence track. On 13 July 2026 the EIC published dedicated submission guidance for the STEP Defence Scale Up call, which opened on 1 July.

The call offers €10M to €30M in direct equity per company, the first time any EU programme has taken direct equity in defence firms, and is designed to catalyse private rounds of €50M to €150M and beyond. The 2026 budget is €100M, applications are open until 28 October 2026, and results are expected in early 2027. It covers air and missile defence, drones and counter-UAS, cyber, AI, electronic warfare and more.

For eligible defence and dual-use companies, the call creates a new route to the scale of investment needed to expand production, enter new markets and attract larger private funding rounds.

> 🛡️ Programme: EIC STEP Scale Up (Defence track) Budget: €100M for 2026; €10M to €30M direct equity per company Deadline: 28 October 2026 (call opened 1 July 2026) Next: results expected early 2027 Eligibility: SMEs and small mid-caps in the EU and Ukraine; equity eligibility is narrower than for grants and excludes some associated countries, including the UK

> Source: European Innovation Council

Interreg Euro-MED confirms a September window for its seventh sustainable tourism call

Interreg Euro-MED is the EU's Mediterranean cooperation programme, and its seventh call runs under the Mediterranean Multiprogramme Mechanism. The programme has now confirmed the structure and timetable for the call, which funds the transfer and uptake of sustainable-tourism outputs developed by other participating Interreg programmes.

The call opens on 1 September 2026 at 13:00 Brussels time and closes on 30 September 2026, with mandatory annexes due by 14 October and projects expected to start in spring 2027. Technical meetings support applicants along the way, including a recorded session from 8 July, a further meeting in early September and a Q&A on 23 September.

With only a one-month application window, prospective applicants should use the coming weeks to confirm their eligibility, partnerships and the project results they intend to transfer.

> 🏖️ Programme: Interreg Euro-MED (Mediterranean Multiprogramme Mechanism, Call 7) Focus: transfer and uptake of sustainable-tourism outputs Opens: 1 September 2026 (13:00 Brussels time) Deadline: 30 September 2026 (mandatory annexes by 14 October 2026) Next: projects expected to start in spring 2027

> Source: Interreg Euro-MED

Ukraine signs agreements opening the way to EDF participation and EDIP support

The European Defence Fund (EDF) supports collaborative defence research and development, and the European Defence Industry Programme (EDIP) is the EU's €1.5bn instrument for 2026 to 2027. On 15 July 2026, Ukraine and the EU signed two agreements at the EU and Ukraine Defence Industry Forum.

Once ratified by Ukraine's Verkhovna Rada and brought into force, the EDF accession agreement will allow Ukrainian state-owned and private defence companies to take part in joint research and development projects with European partners and to seek grant funding. A second financing agreement concerns EDIP and includes an approximately €300M Ukraine Support Instrument: €260M for manufacturing capacity and €35.3M for BraveTech EU innovation.

For European and Ukrainian defence businesses, the agreements could unlock new cross-border research, manufacturing and investment partnerships once the necessary ratification and implementation steps are complete.

> 🤝 Programmes: European Defence Fund (EDF), European Defence Industry Programme (EDIP) EDIP budget: €1.5bn for 2026 to 2027 Ukraine Support Instrument: approximately €300M (€260M manufacturing capacity, €35.3M BraveTech EU) Signed: 15 July 2026, EU and Ukraine Defence Industry Forum Status: pending ratification by Ukraine's Verkhovna Rada and entry into force

> Source: European Commission (EDIP)

Commission proposes a targeted ETS revision and launches an Electrification Action Plan

The EU Emissions Trading System (ETS) is the bloc's main carbon-pricing mechanism and the source of the Innovation Fund and Modernisation Fund. On 17 July 2026 the Commission proposed a targeted ETS revision for Phase 5 (2031 to 2040), aligned to the 90% net-2040 climate target.

Under the proposal, the Innovation Fund is updated for more predictable low and zero-carbon support, with anti-speculation measures and annual public reporting, and the Modernisation Fund is broadened to electrification, industrial decarbonisation and carbon capture. A proposed Industrial Decarbonisation Bank would aim to mobilise €100bn, while an ETS Investment Booster of around €30bn would become operational from 2028. Published alongside, the Electrification Action Plan sets an indicative target of 46% electrification of final energy by 2040, roughly double today's share, which the Commission estimates could cut EU fossil-fuel imports by around €260bn a year.

For organisations developing clean technologies or planning major electrification projects, the proposals offer an early indication of where future EU funding and investment support is likely to concentrate.

> ⚡ Programme: EU ETS revision (Phase 5, 2031 to 2040), Innovation Fund, Modernisation Fund Proposed instruments: Industrial Decarbonisation Bank (aiming to mobilise €100bn), ETS Investment Booster (around €30bn from 2028) Target: 46% electrification of final energy by 2040 Published: 17 July 2026 Status: legislative proposals, not yet open funding instruments

> Source: European Commission

Parliament and Council agree AGILE, a €115M defence innovation programme for SMEs

AGILE, the Programme for agile and rapid defence innovation, was proposed in March 2026 to give SMEs faster routes into disruptive defence technology. The European Parliament and Council reached political agreement on 15 July 2026, which the Commission welcomed on 16 July.

The programme provides €115M for fast-track grants awarded within four months, access to testing and certification, and simplified procurement for SMEs, start-ups and scale-ups in disruptive defence tech. It is expected to become operational in early 2027, pending formal adoption.

If adopted as planned, AGILE should give smaller defence innovators a faster route from development to testing, certification and procurement when the programme launches in 2027.

> 🚀 Programme: AGILE (Programme for agile and rapid defence innovation) Budget: €115M Features: grants awarded within four months, testing and certification access, simplified procurement Status: political agreement reached 15 July 2026; expected operational in early 2027 pending formal adoption

> Source: Council of the EU

Council proposes a €231.466M reduction to Horizon Europe's 2027 budget

Horizon Europe is the EU's main research and innovation programme, and the Council has now agreed its negotiating position on the 2027 EU budget. It proposes reducing Horizon Europe commitment appropriations by €231.466M, from the Commission's proposed €12.838bn to €12.607bn, alongside a €159M commitment reduction for Erasmus+.

The Commission proposal was already €155.059M below Horizon Europe's 2026 commitment budget of €12.994bn. The Council position would therefore leave the programme around €386.525M, or 3%, below 2026. Its technical annex allocates the proposed Horizon cuts across Clean Aviation JU (€87M), Health (€74.5M), Climate, Energy and Mobility (€20M), support expenditure (€12.666M), EuroHPC (€11M), research infrastructures (€10.4M), Culture, Creativity and Inclusive Society (€10.4M) and the ERC (€5.5M).

Applicants should not expect immediate changes to current calls, but organisations planning for 2027 should follow the negotiations closely, particularly in the areas facing the largest proposed reductions.

> 📉 Programme: Horizon Europe (2027 annual budget), Erasmus+ Horizon commitment proposal: €12.607bn, down €231.466M from the Commission draft Compared with 2026: approximately €386.525M lower, a reduction of around 3% Largest proposed reductions: Clean Aviation JU €87M; Health €74.5M Status: Council negotiating position; formal adoption and Parliament negotiations still required

> Source: Council of the EU

EU sets out a Cybersecurity and AI Action Plan with a Grand Challenge on the way

The EU Action Plan on Cybersecurity and Artificial Intelligence, published on 7 July 2026, sets out how the Commission intends to strengthen Europe's defences at the intersection of AI and cyber. It signals a pipeline of future funding rather than an open call today.

The Commission will launch an EU Grand Challenge on AI for cybersecurity, specifically an AI-assisted vulnerability-remediation challenge run with ENISA and the European Cybersecurity Competence Centre (ECCC), alongside an EU capacity for third-party evaluation of advanced AI models and a secure testing platform.

For organisations working in AI security, model evaluation or critical infrastructure, the plan is an early signal to build partnerships and position projects ahead of future calls.

> 🔐 Programme: EU Action Plan on Cybersecurity and Artificial Intelligence Planned: EU Grand Challenge on AI for cybersecurity, third-party AI model evaluation capacity, secure testing platform Partners: ENISA, European Cybersecurity Competence Centre (ECCC) Published: 7 July 2026 Status: policy plan; call identifiers, budgets and dates not yet published

> Source: European Commission

Featured Calls

These are the most popular calls on Discovery this week. Get in touch if you'd like to find out whether you could be a fit. Interested in pursuing any of these calls? Request a free concept note to find out how your organisation fits and what a winning proposal could look like.

Health

> 🩺 HORIZON-MISS-2026-02-CANCER-04: Earlier and more precise palliative care Budget: €15M total, around 3 grants of about €5M | Deadline: 15 September 2026 Programme: Horizon Europe (Mission on Cancer) | Status: Open Thematic Areas: Health, cancer care, palliative care, clinical research Summary: This call funds earlier, evidence-based palliative-care pathways, with around 3 grants of about €5M each. Fit signal: Hospitals, oncology centres, universities, patient organisations and clinical research consortia developing earlier, evidence-based palliative-care pathways.

Culture & Society

> 🎨 HORIZON-CL2-2026-01-HERITAGE-04: A fair and transparent market for cultural and creative content in the era of generative AI Budget: €12M total, around 3 grants of €3M to €4M | Deadline: 23 September 2026 Programme: Horizon Europe (Cluster 2) | Status: Open Thematic Areas: Culture, creative industries, generative AI, rights and content markets Summary: This call funds work towards a fairer, more transparent market for cultural and creative content in the era of generative AI, with around 3 grants of €3M to €4M each. Fit signal: Creative-industry bodies, media organisations, rights holders, AI researchers, universities and cultural-policy consortia.

Security

> 🛡️ EDF-2026-LS-DA-SME-NT: Non-thematic development actions by SMEs Budget: €30M total (see the official EDF call documents for the expected project count and per-project contribution) | Deadline: 29 September 2026 Programme: European Defence Fund | Status: Open Thematic Areas: Defence, dual-use technology, SME innovation, product development Summary: This call funds SME-led development of defence and dual-use technologies; see the official EDF call documents for the expected project count and per-project contribution. Fit signal: Defence and dual-use SMEs with development-stage technologies and the partnerships needed to meet EDF eligibility and consortium rules.

New Calls This Week

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Calls Opening This Week

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Three EIC Pathfinder Challenges 2026 topics move from Forthcoming to Open on Wednesday 22 July. The three challenges share a combined indicative budget of €96M, each expecting around eight projects with EU contributions of €0.5M to €4M per project, and all close on Wednesday 28 October 2026.

HORIZON-EIC-2026-PATHFINDERCHALLENGES-01-01 ⇢ Advanced Materials for Miniaturised Energy Harvesting Systems Opens: Wednesday 22 July 2026 · Budget: €0.5M to €4M per project · Deadline: Wednesday 28 October 2026

HORIZON-EIC-2026-PATHFINDERCHALLENGES-01-02 ⇢ Biotechnology for Healthy Ageing Opens: Wednesday 22 July 2026 · Budget: €0.5M to €4M per project · Deadline: Wednesday 28 October 2026

HORIZON-EIC-2026-PATHFINDERCHALLENGES-01-03 ⇢ DeepRAP: Deep Reasoning, Abstraction and Planning towards trustworthy Cognitive AI Systems Opens: Wednesday 22 July 2026 · Budget: €0.5M to €4M per project · Deadline: Wednesday 28 October 2026

Calls to Prioritise

These deadlines are approaching, but there's still enough runway to prepare a competitive proposal. Proposal Builder gives you senior co-authoring and expert EU funding support through to submission.

HORIZON-CL3-2026-02-CS-ECCC-02 ⇢ SecureAI: Security, Privacy and Robustness of AI Models and Systems (€21.2M) Tuesday 15 September 2026

HORIZON-CID-2026-01-02 ⇢ Clean Industrial Deal: Clean Technologies for Climate Action (€150M) Tuesday 15 September 2026

HORIZON-EIC-2026-TRANSITIONOPEN ⇢ EIC Transition Open (€100M) Wednesday 16 September 2026

LIFE-2026-SAP-ENV-ENVIRONMENT ⇢ Circular Economy and Zero Pollution (€79M) Tuesday 22 September 2026

HORIZON-MISS-2026-03-OCEAN-02 ⇢ Aquatic pollution and biodiversity (€31M) Wednesday 23 September 2026

HORIZON-WIDERA-2026-03-WIDENING-01 ⇢ Hop-On Facility (€30M) Thursday 24 September 2026

Upcoming Events

Upcoming events relevant to EU funding and innovation.

EIC Multi-Corporate Days at The Impact Circle ⇢ Invitation-only pitching and networking for EIC-backed start-ups and scale-ups with corporates and investors Date: Wednesday 22 July to Friday 24 July 2026 | Location: Boom, Belgium

From Lab to Market: Technology Transfer and Knowledge Valorisation ⇢ A workshop on evaluator expectations, IP, business models and routes to market for Horizon Europe topics Date: Wednesday 22 July 2026 | Location: Istanbul

European Funding Opportunities for Energy Communities ⇢ An ECHO webinar on Horizon Cluster 5 and CETPartnership funding for energy communities, 10:00 to 12:30 CET Date: Thursday 23 July 2026 | Location: Online

Q&A Session for ERC 2026 Advanced Grant Applicants ⇢ An interactive session on forms, evaluation criteria, budgets and the lump-sum model for ERC Advanced Grant applicants Date: Friday 24 July 2026 | Location: Online

EIC VentureMatch e-pitch: biotech and pharma ⇢ An online matchmaking event connecting EIC-backed biotech and pharma innovators with investors Date: Tuesday 28 July 2026 | Location: Online

From Idea to Impact: Horizon Europe National Info Day in Edirne ⇢ A national info day on programme structure, participation rules, budgeting and project management Date: Tuesday 28 July 2026 | Location: Edirne

Info Session: Digital Europe call for youth-driven social media platforms ⇢ An applicant briefing on the Digital Europe call to shape safer, more inclusive social media platforms Date: Thursday 30 July 2026 | Location: Online

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