Europe is currently grappling with a critical deficit in a foundational component of its defense industrial base: trinitrotoluene (TNT). Decades of underinvestment, compounded by surging demand driven by the conflict in Ukraine, have exposed a significant vulnerability in the continent’s military supply chain, posing a strategic challenge to its collective security ambitions.
- Europe faces a critical deficit in trinitrotoluene (TNT), a foundational defense component for ammunition.
- Russia’s annual ammunition production capacity significantly surpasses Europe’s, estimated at a 4:1 to 6:1 ratio.
- Europe currently relies on a single significant TNT producer, Poland-based Nitro-Chem, with substantial output committed to the U.S. military.
- Sweden Ballistics (SWEBAL) is spearheading efforts to re-establish TNT manufacturing in Sweden, targeting 4,500 tonnes annually by 2027.
- Over 60% of Europe’s €200 billion annual defense material expenditure is currently procured from U.S. producers.
- EU initiatives like ReArm Europe 2030 are in place, but slow procurement orders hinder the scaling of domestic defense production.
The geopolitical landscape has starkly illuminated the disparity in defense production capabilities across the continent. Estimates suggest Russia’s annual ammunition production significantly outstrips Europe’s, with ratios cited between 4:1 and 6:1. While prominent European defense manufacturers such as Rheinmetall, BAE, and KNDS are leaders in ammunition production, they do not produce their own TNT. Presently, Europe’s reliance rests on a solitary significant TNT producer, Poland-based Nitro-Chem, much of whose output is already committed elsewhere. Notably, a $310 million (approximately €269 million) deal signed in April 2025 will supply 18,000 tonnes of TNT over three years to the U.S. military. This limited domestic capacity stands in sharp contrast to Russia’s estimated annual resource of 4.5-5 million artillery shells, approximately 2 million of which originate from North Korea. Europe’s 2023 output was around 600,000 shells, projected to reach 1.2 million in 2024 with U.S. collaboration. Given that a typical artillery shell contains about 10kg of TNT, achieving production parity with Russia would necessitate a European supply of roughly 50,000 tonnes annually.
This reliance on a solitary regional producer and external suppliers, particularly from Asia, presents substantial strategic risks. Joakim Sjöblom, CEO and co-founder of Sweden Ballistics (SWEBAL), highlights the inherent fragility of such supply chains. Drawing parallels to the COVID-19 pandemic, during which nations imposed export bans on critical goods like vaccines, Sjöblom warns that a conflict near an external TNT supplier or even in Poland could trigger similar restrictions, severely impacting European defense capabilities. Despite China being one of the world’s largest TNT producers, NATO countries generally exclude it from their sensitive supply chains, further limiting procurement options.
In response to this critical shortage, initiatives are emerging to revitalize European TNT production. SWEBAL is spearheading efforts to re-establish TNT manufacturing in Sweden, aiming for an annual capacity of 4,500 tonnes by 2027—sufficient for 400,000-450,000 shells. This marks a significant return for Sweden, which ceased TNT manufacturing in 1998 during a period of extensive demilitarization. At that time, commercial incentives for production dwindled as refurbished TNT from decommissioned shells became readily available, often at minimal cost to the mining industry. The current investment reflects a recognition of the long-term consequences of that earlier industrial decline.
Economic and Strategic Imperatives of Local Production
Beyond bolstering security, increasing domestic TNT production offers substantial economic benefits. European member states collectively spend approximately €200 billion annually on defense material, with over 60% currently procured from American producers. Redirecting these expenditures to internal European manufacturing could generate more than 10 million jobs within the bloc. SWEBAL exemplifies this localized approach, targeting a supply chain where all machinery, materials, and production are sourced within a 550km radius. This not only strengthens local economies but also drastically reduces lead times, circumventing current logistical challenges such as the two-month transit times for Asian imports, exacerbated by shipping re-routes around the Horn of Africa to avoid the Suez Canal.
The European Union is attempting to facilitate this industrial revival through initiatives like the ReArm Europe 2030 plan, which could release up to €800 billion over four years, including a €150 billion loan instrument named SAFE (Security Action for Europe). This funding aims to empower member states to prioritize homegrown defense companies. However, industry leaders like Sjöblom point to persistent challenges. Procurement orders from armed forces and member states are not materializing at the pace required for companies to scale production effectively. This creates an “suboptimal risk profile” for the industry, where private entities are expected to absorb significant financial risks without commensurate, timely demand signals.
Towards a Harmonized European Defense Industry
A fundamental hurdle for the European military industrial complex remains the lack of harmonization and interoperability among member states. Sjöblom emphasizes that tanks from one country should be seamlessly compatible with ammunition from another. This necessitates a more unified market approach to defense procurement and standards. While individual nations often focus on short-term gains, a broader, integrated strategy is critical. The long-term objective, as articulated by Sjöblom, transcends immediate profitability, prioritizing the prevention of future conflicts through robust, self-sufficient defense capabilities. The cost of failing to build a cohesive and capable European defense industry, he suggests, will ultimately be far greater than the investment required.
Oliver brings 12 years of experience turning intimidating financial figures into crystal-clear insights. He once identified a market swing by tracking a company’s suspiciously high stapler orders. When he’s off the clock, Oliver perfects his origami… because folding paper helps him spot market folds before they happen.