These days, Rheinmetall has unveiled an ambitious wave of industrial investments across Europe, spanning from synthetic fuel production in Germany to propellant powder manufacturing in Romania and artillery ammunition facilities in Lithuania. These developments, announced between 3rd and 4th November 2025, underscore the company's strategic commitment to strengthening European defence capabilities whilst addressing critical supply chain vulnerabilities across NATO's eastern flank.

Synthetic fuel production: the Giga PtX initiative

On 3rd November, Rheinmetall presented its groundbreaking 'Giga PtX' project, a strategic initiative to establish a Europe-wide network of modular production facilities for CO2-neutral synthetic fuels specifically designed for military applications. The concept, developed in partnership with German technology leaders Greenlyte Carbon Technologies, Sunfire, and INERATEC, aims to enable European armed forces to produce fuel locally, independent of global fossil fuel supply chains.

"War readiness requires a resilient energy infrastructure. Maintaining fossil fuel supply chains will be challenging for European countries in the event of a defence situation," stated Armin Papperger, CEO of Rheinmetall AG. The company envisions several hundred modular e-fuel production plants, each capable of producing 5,000 to 7,000 tonnes of diesel, marine diesel, or kerosene annually.

Rheinmetall will act as general contractor, handling system integration, design, construction, maintenance, and operation of these large-scale industrial facilities. Sunfire will provide pressurised alkaline electrolysers and highly efficient SOEC technology for green hydrogen production, whilst Greenlyte will capture carbon dioxide directly from the atmosphere. INERATEC, which recently commissioned Europe's largest power-to-liquid facility in Frankfurt am Main (producing up to 2,500 tonnes of sustainable fuel annually), will supply the critical Reverse Water Gas Shift and Fischer-Tropsch processes that convert hydrogen and carbon dioxide into synthetic fuels.

The first facilities could be realised at short notice once the necessary political and regulatory framework conditions have been established, offering armed forces the capability to maintain operational readiness even when conventional fuel supply chains become vulnerable.

Romania: addressing the propellant powder bottleneck

Also on 3rd November, Rheinmetall signed a joint venture agreement with Romanian company Pirochim Victoria, a subsidiary of Romarm, to establish Rheinmetall Victoria SA for propellant powder and modular propellant production. The ceremony in Bucharest was attended by Papperger and Romanian Prime Minister Ilie Bolojan, marking a strategic milestone in Romania's defence industrial development.

"Propellant powder remains a strategic bottleneck within the defence industry. The new production facility in Romania is another step towards our goal of achieving an annual production capacity of 20,000 tonnes of propellant powder by 2030," Papperger explained. The investment exceeds €500 million, with Rheinmetall holding a 51% stake and Pirochim Victoria the remaining 49%.

The production plant will be built in Victoria, Brasov County, creating approximately 700 jobs. Expected annual production capacity includes around 300,000 modular propellant charges (requiring approximately 750 tonnes of powder) plus 200 tonnes of propellant powder for local Romanian demand. Energy precursors such as nitrocellulose will also be produced locally. Production is scheduled to commence in 2028.

This facility represents Rheinmetall's continued expansion in Romania, complementing the company's acquisition of a majority stake in vehicle manufacturer Automecanica Medias earlier in 2024. As previously reported by Future Warfare Magazine, propellant powder shortages - alongside TNT and nitrocellulose availability - have become a critical challenge for ammunition production, with industry experts highlighting the need to double global production capacity to meet growing defence requirements.

Lithuania: fortifying NATO's Eastern Flank

On 4th November, Rheinmetall held a groundbreaking ceremony in Baisogala, Lithuania, for a new 155mm artillery ammunition plant. The event was attended by Lithuanian President Gitanas Nauseda, Prime Minister Inga Ruginiene, multiple government ministers, and German State Secretary for Defence Dr Nils Schmid, underlining the project's strategic significance.

The Ammunition Plant Lithuania, operated by joint venture Rheinmetall Defence Lithuania, will be a modern production facility covering approximately 340 hectares. The site will include a shell casing forge and filling plant, with production capacity expected to reach tens of thousands of projectiles per year. The investment totals up to €300 million, creating up to 150 jobs.

The Lithuanian plant is scheduled to begin operations as early as 2026, with line qualification continuing until the end of that year, followed by gradual ramp-up in 2027 depending on order volumes. During the ceremony, Rheinmetall also signed a Memorandum of Understanding with Lithuania's Ministry of Economy and Innovation to establish a Centre of Excellence for propellants, which will produce energetic components, combustible cartridge cases, and modular propellant charges with capacity for several hundred thousand propellant charge modules annually.

President Nauseda emphasised the plant's strategic importance: "For Lithuania, this state-of-the-art artillery ammunition production facility, the largest defence investment in country's history, is not merely an industrial project. It is a strategic step aimed at building deterrence as a precondition for peace".

This investment builds on Rheinmetall's existing presence in the Baltic States, including the Lithuania Defense Services joint venture in Jonava, which maintains combat vehicles for the German 45th Tank Brigade, other NATO armies, and Ukraine. The company has also announced plans to construct another artillery plant in neighbouring Latvia.

Rheinmetall's wider European expansion in 2025

These latest investments build upon an intensive year of European expansion for Rheinmetall. In September 2025, the company inaugurated Europe's largest ammunition production facility in Unterluess, Germany - a €500 million plant built in just 15 months capable of producing 350,000 rounds annually by 2027. That same month, Rheinmetall also announced a €275 million joint venture in Latvia to establish another artillery ammunition facility, scheduled to begin operations in spring 2027 and create at least 150 jobs. Perhaps most significantly, September also saw the announcement of Rheinmetall's acquisition of Naval Vessels Lürssen (NVL), transforming the German defence giant from a predominantly land-based systems provider into a comprehensive naval contractor operating four shipyards across northern Germany with approximately 2,100 employees globally.

Beyond manufacturing infrastructure, Rheinmetall has deepened its presence across multiple European countries. In Italy, the company has ramped up production of HERO loitering munitions at its RWM Italia facilities in Sardinia, fulfilling an order book exceeding €200 million for 8 European customers. The Leonardo Rheinmetall Military Vehicles joint venture continues advancing Italy's €23 billion A2CS programme, with LYNX infantry fighting vehicles undergoing testing. In Germany, Rheinmetall secured a €330 million contract in January for 568 logistics vehicles, part of a framework agreement potentially worth €3.5 billion over seven years. Collectively, these initiatives position Rheinmetall to achieve its target of 1.5 million artillery projectiles annually across its global network by 2027, whilst establishing the company as Europe's pre-eminent defence industrial integrator.

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