Filling in the 1.5 Percent
6 July 2026
Co-authored by Alberic Mongrenier, EIES Executive Director, and Peter Flory, Senior Fellow
Download the document here.
At this week’s NATO Summit in Ankara, says Secretary General Mark Rutte, “[t]he task before us is clear: to translate allied commitments into concrete results.”
While the spotlight will be on the topline defence spending target of 5 percent of GDP, ramping up defence industrial production, and supporting Ukraine, keep an eye too on the 1.5 percent target for vital defence-related projects to support NATO’s deterrence and military plans.
The 2025 Hague Summit agreement to spend 1.5 percent of GDP on non-core defence investments marked a qualitative and quantitative shift in how NATO approaches today’s security challenges. In the Turkish capital, the 32 Allies will report where they stand on their commitments. But while NATO has an established process and metrics for core defence spending, overseeing the 1.5 percent to “inter alia protect our critical infrastructure, defend our networks, ensure our civil preparedness and resilience, unleash innovation, and strengthen our defence industrial base” is a new and more complicated task.
The first formal review is not due until 2029. But Ankara is an opportunity, as the Secretary General urged, for NATO to demonstrate results to date – and fill in details and guidance to ensure this substantial investment (estimated at over $800 billion, and almost $ 400 billion for NATO’s non-US allies) yields the maximum contribution to NATO’s deterrence and defence.
The European Initiative for Energy Security (EIES) was launched in the wake of Russia’s 2022 invasion of Ukraine to advance policies that support diverse supply chains, resilient energy systems, and a strong industrial base to ensure Europe’s long-term security and freedom of action. We have spent the last few years looking at Europe’s energy crisis, Russian hybrid attacks on European infrastructure, unabated dependence on China for materials and components, and rising energy demand, including technologies such as AI and quantum computing. The following are some of our key insights on energy and critical raw materials that can help guide NATO’s work in identifying and prioritising key lines of effort.
1. First, Energy
To ensure resilience and civil preparedness, Article 3 of NATO’s founding Washington Treaty commits Allies to “maintain and develop their individual and collective capacity to resist armed attack.” And “resilient energy supplies” rank second in NATO’s Resilience Baseline Requirements, right after “continuity of government.”
NATO Deputy Secretary General Radmila Shekerinska underscored this point in June when she “highlighted that defence depends on secure access to fuel and energy, and emphasised… the need to reduce strategic vulnerabilities and strengthen the protection of critical energy infrastructure.”[1]
Defending Energy Infrastructure
Given the EU’s role in the European energy sphere, NATO-EU coordination will be imperative to obtain the full benefit of Allies’ increased investment. This means, in particular, aligning EU critical energy infrastructure funding with NATO defence and resilience objectives and the upcoming EU energy security framework; clarifying NATO, EU, and national roles; and ensuring internal coordination in capitals between national ministries.
Recent hybrid attacks on European energy facilities have underscored the importance of improved information-sharing between governments and industry to facilitate timely and effective response. European governments, industry, NATO, and the EU need secure, real-time information-sharing platforms modelled on Allied best practices. This will require security clearances for key private-sector actors and protection for company-proprietary data, so there will be no excuses for not sharing data even on sensitive facilities like offshore platforms and undersea infrastructure.
To harden grids, European governments should prioritise rapid repair and recovery by building strategic stockpiles of key grid components and drawing lessons from Ukraine’s response to Russia’s brutal attack on Kyiv’s energy infrastructure. Boosting Europe’s capacity to manufacture its own transformers and other large components is a critical long-term priority. The EU should facilitate standardisation and interoperability of key components such as transformers while vetting suppliers to avoid creating systemic vulnerabilities.
Batteries for Defence
Batteries and storage are another key element of energy infrastructure - they are also critical for defence supply chains. In a recent RUSI article, Wanted: More Batteries for Defence, NATO expert Lukas Trakimavičius laid out military battery needs, which go well beyond the now-ubiquitous aerial drones and form a vital element of Europe’s future defence posture, from soldier systems and microgrids to submarines, torpedoes, missiles, fighter jets, and military satellites. See also Open Letter - Wanted: European Batteries for Defence.
But in defence too, batteries present a massive vulnerability given both Beijing’s ability to shut down supply chains, and its cyber access into Chinese batteries and components embedded in Europe’s core infrastructure systems that support NATO bases, logistics and systems. (This is the same Beijing that is an unapologetic “no limits” partner of Russian President Vladimir Putin and provides the industrial base for much of Russia’s war on Ukraine.)
The ball is in the court of the EU and its Member States to restrict and eventually end procurement for defence components from Chinese suppliers (the US has a head start here). To get there, a strong European battery industry is a precondition for the resilience and defence capacity that Allies are trying to build through their Hague commitments. This will take time, but until then, Europe's militaries will remain dependent on a strategic rival.
In the meantime, Allies’ investment should not further supercharge Europe’s existing infrastructure dependence on Beijing. In the same vein – though this too is not in NATO’s in-box – the EU should strengthen its flagship initiative, the Industrial Accelerator Act (IAA). Designed to build demand for European-made products, including batteries, the current IAA draft contains cost exemptions, broad origin rules, and loopholes that could hand the market straight back to China.
2. Critical Raw Materials – For Energy and Defence
By now, China’s dominant position in critical raw materials needed for defence and energy systems alike is well known, with Beijing controlling over 90 percent of global processing capacity. As important, Beijing has demonstrated its willingness to leverage its dominance for foreign policy and trade goals, and its (suspended) 2025 restrictions remain a “sword of Damocles” over Allied defence supply chains.
Ankara is the occasion for NATO to ramp up its commitment on CRMs. It can build on impressive work identifying 12 defence-critical raw materials, creating a road-map, and incorporating access to critical minerals, friend-shoring strategies, and multinational stockpiling discussions into its updated Defence Production Action Plan. At the Hague Summit last year, 12 Allies agreed to pursue a High Visibility Project for the joint acquisition, storage, transportation, and management of stockpiles of defence-critical raw materials, including recycling. But the heaviest lifting is yet to come to rebuild secure defence-relevant supply chains, so a strong commitment in Ankara is needed.
Going forward, global coordination is key - no single alliance or nation will break China's dominance. NATO's CRM work and 1.5% commitment form one of a series of national, bilateral, and multilateral initiatives, most recently from the G7, to rebuild secure CRM supply chains. Without coherent alignment among Allies and partners, NATO, the EU, and the G7, these efforts risk fragmentation, duplication, and missed opportunities. NATO’s Indo-Pacific Four (IP4) partners – Japan, South Korea, Australia and New Zealand – bring expertise, market power and actual mineral resources and processing capacity.
To achieve non-linear results, Allies should first target CRM bottlenecks. Early, targeted investments in critical bottlenecks (processing capacity, refining infrastructure, and stockpiling) can deliver disproportionate security dividends before the full spending ramp materialises. Frontloading high-impact projects will be essential to closing the vulnerability gap and maintaining deterrence.
3. Expand the Box - Energy Innovation for Defence
Last but not least - one path out of the current box of dependence and vulnerability is greater energy innovation. In 2021, NATO Defence Ministers endorsed “Foster and Protect: NATO’s Coherent Implementation Strategy on Emerging and Disruptive Technologies [EDT]” – an approach to developing NATO’s own dual-use technologies and ensuring Allies are not surprised by adversaries or competitors. In 2023, Allies launched the Defence Innovation Accelerator for the North Atlantic (DIANA). Events from Ukraine to trade frictions with China to the Strait of Hormuz have only heightened the urgency of new energy solutions.
Energy and propulsion is one area Allies identified as a priority as it plays a fundamental role in warfighting capabilities and NATO’s deterrence and defence posture. To take EDT forward, NATO is developing a strategic approach to energy technologies for defence to accelerate innovation, ensure interoperability, manage risks, and build NATO’s warfighting capabilities. In Ankara, Allies should use the Summit to provide renewed impetus and direction.
A Last Point: Transparency and credibility are essential.
The 1.5% pledge offers a historic opportunity to rebuild Europe’s security and autonomy if resources are deployed for credible priorities. In some cases, there may be attempts to “cammo-wash” nice-to-have local projects as urgent Alliance requirements. To maximise real-world security impacts and ensure political solidarity among Allies, NATO should agree on clear definitions of what qualifies as defence-related spending and rigorous criteria for project selection and outputs.