What direction will the European space sector take in 2025?
0
0
0
Article published in Space International no. 8 - January 2025
With the swearing in of President Trump, the 50th anniversary of the European Space Agency (ESA), and the first commercial flights of Ariane 6, all against the backdrop of the moribund economic situation in the European Union (EU), the year 2025 promises to be a pivotal one for Europeans in the space sector. It is in this context that the new European Commissioner for Defense and Space, Andrius Kubilius, has been tasked in his mission statement with implementing the main points of the Draghi Report and completing work on the European space law 1.
An idea for maneuver: the Draghi Report
Released on September 9, 2024, the Draghi report took stock of the challenges currently facing European industry: weak economic growth, flagging competitiveness, and threatened strategic autonomy in key sectors.
With regard to the space sector, the Draghi report makes three observations: difficult and insufficient access to public and private funding; a fragmented and overly complex European space governance model that leads to a lack of coordination between the various players; and legal uncertainty linked to the fragmentation of the European legal framework and the extraterritoriality of US regulations, which weaken the European space sector.
In light of these observations, the philosophy behind the proposals in the Draghi report could be summarized as: “Don't suffer”. It is clear that the report proposes a new trajectory for the European space industry, which involves changing the rules, both literally and figuratively.
Competition between the EU and the ESA for European space leadership
First of all, by pointing out that, at the regional level in Europe, it is the EU that has the legitimacy and competence to set these rules. However, because of its influence, the ESA is naturally also tempted to want to give regulatory scope to the initiatives it implements. This is particularly the case with its Zero Debris Charter, which it would like to establish as a standard for European industry ². As we have seen first-hand, the EU is therefore sometimes simply obliged to remind the ESA that it has no regulatory power and that this competence belongs to the EU ³.
Inevitably, these tensions between the ESA and the EU lead the states to have to take a position in turn, thus constituting a destabilizing factor that contributes to weakening the coordination capacities of the European states. It should be noted that France, due to its pro-European and “legalist” position, logically takes the EU's side, so that the National Center for Space Studies (CNES) is not a signatory to the Charter. Germany seems to have adopted a less clear-cut position for the moment, as the German Space Agency (DLR) is a signatory. In a spirit of neutrality and support for initiatives to preserve the space environment, wherever they come from, Cosmos for Humanity is also a signatory.
The EU's desire to consolidate and increase its position at the expense of the ESA
In return, the Draghi report responds to the ESA's entryism by proposing that the European Commission sit on the ESA Council. To defend the EU's positions there, of course, but also to remind the states that the future of the coordination of the European space sector will now be decided in Brussels.
The situation of Switzerland, a country aligned “pro-ESA” par excellence, is a very interesting illustration of this. Deprived of the financial support of the Horizon Europe framework program, in particular due to the non-renewal of the agreements with the EU 4, its space sector is currently surviving only thanks to the support of the State Secretariat for Education, Research and Innovation (SERI), which has taken over temporarily. However, if no agreement is reached with the EU, and if the ESA is forced to end the principle of geographical return (a principle that the agency will find very difficult to give up, and certainly not without compensation), the situation will become untenable for a Swiss space sector that is technically efficient but uncompetitive in the context of the large single European market.
Also, when the Draghi report suggests a redefinition of the roles of the Commission, the ESA and the European Union Agency for the Space Program (EUSPA), it is likely that this will be done in the interest of the European Union. The proposals to align ESA public procurement procedures with those of the EU and the abolition of the principle of geographical return also tend to reduce ESA's capacity for aggregation and coordination, so as to assert the pre-eminence of the EU.
Takeover and restructuring of the internal space market by the EU
This single European market for space is also the cornerstone of the Draghi report. While the modernization of procedures for access to public procurement and the end of the principle of geographical return seek to reduce the dispersion of resources and the fragmentation of the European industrial fabric, the creation of a common legal framework for space legislation and the introduction of European preference rules are clearly intended to preserve EU-based companies.
Such a strategy, if implemented, is bound to provoke discontent among the EU's economic partners. While “de jure European preference” may appear to be a protectionist measure, this is not the case if all players operating on the European market are subject to the same rules. By encouraging European companies to make an effort on the sustainability of their activity, while imposing a restrictive framework in terms of environmental performance, the European Commission could seek to create a “de facto European preference”.
By calling for the application of the same rules to all operators active in its single European market for space, the Draghi report encourages, in our view, the circumvention of the political trap of protectionism by conferring extraterritorial scope on European space regulations. The regulations in question remain to be determined, and the Draghi report refers to the ongoing work on the European Union Space Law (EUSL) project.
'Sustainable competitiveness' and extraterritoriality of European regulations
From 2022, Cosmos for Humanity proposed using the European market as a means of action to encourage non-European players to adopt new standards in terms of space sustainability, using the levers of the Corporate Sustainability Reporting Directive (CSRD) and the European Green Taxonomy 5. And it is precisely a path that the EU now has the means to take. The ongoing work on the Product Environmental Footprint Category Rules (PEFCR)6 as well as that on the EUSL could go in this direction, through their desire to give spatial sustainability an important place, as revealed by the details of its “Policy Options” 7. The difficulty lies in the implementation. For the moment, the choice between a binding system and an incentive system does not seem to have been made, nor has the desirability of a European label for spatial sustainability 8.
The general idea of this approach would then be bold. Since European companies do not have the same means and advantages to compete on equal terms with American companies in terms of financial performance, it would then be a question of changing the rules to bring the competition into the field of non-financial performance, where European companies are more competitive, and better prepared thanks to the EU's work on sustainable finance.
From our point of view, this solution has the advantage of enabling European space companies to transform themselves to offer sustainable space activities. And better still, it also encourages American companies to do the same. However, this strategy is a double-edged sword for Europeans. While pursuing an objective of general interest, it encourages all operators in the European single market to pivot towards more sustainable space activities, but there is nothing to say that American companies, renowned for their agility, will not be able to pivot faster than European companies.
Obviously, faced with this, the American authorities will not stand by and watch and will fight against the implementation of measures they consider protectionist. And this even though Donald Trump already promised during his campaign to establish protectionist measures against Europeans now perceived as economic rivals. It is interesting to note that the US administration considers as “protectionist” any measure or standard developed by Europeans in the field of space sustainability that would be binding. The NASA representative made this point forcefully at the Zero Debris Future symposium at ESA on April 4. With the re-election of President Trump, and Elon Musk probably in his government, we can expect a standoff between the US and the EU on space regulations.
Environmental issues are still not being adequately addressed
The unknown that continues to weigh on the real impact of space activities on the environment is a burden for the space sector. However, its weight is increasing as this issue gradually emerges from the “bubble” of the space sector. While space debris and the threat of orbit congestion are the subject of much attention and “Zero debris” approaches, the threat of the impact of re-entries on the atmosphere, on the ozone layer and on radiative forcing is still poorly understood 9, so that the hypothesis of a “negligible impact” of the space sector on global warming remains for the time being neither confirmed nor denied. This unknown factor is a sword of Damocles: the more we play for time, delaying tackling the problem head-on, the more the reputational impact risks being devastating for the whole sector. And all the arguments about the “importance of space” will be of no help to us if citizens feel they have been duped by industry.
Space remains in the blind spot of our sustainable development policies, which already have their hands full measuring and remedying the environmental damage caused to our planet. Space is, however, crucial, necessary and vital for implementing these policies. However, companies will not seek to participate in preserving access to space data if they are not made aware of their dependence on space. It is therefore urgent, on the one hand, to encourage them to eliminate this blind spot from their CSR approach. And on the other hand, to equip themselves with the means to study the particularities of the impact of space activities, to develop the tools to evaluate it and then to have it documented by the operators, particularly within the framework of the CSRD. The sooner we have an overview of this global impact, the sooner we will be able to face it collectively to ensure the sustainability of the space sector. Otherwise, the sector runs the risk of leaving it up to the banks to arbitrate the costs incurred by the lack of information, particularly in terms of ESG criteria, with the significant possibility that the space sector will share the fate of the arms sector in terms of access to finance.
At the same time, the efforts of operators who will play the game of voluntary documentation must absolutely be supported. By the public authorities, using the levers of European green taxonomy, taking environmental and societal aspects into account in public calls for tenders (SPASER 10 of the CNES) or encouraging the use of a European space label supervised by the EUSL. But also by civil society, which has one of the main financial levers in its choice of goods and services.
Putting citizens at the center of the European space sector's attention
The year 2025 must be a pivotal year for the European space sector in the way it views European citizens, no longer as mere users, but as decisive agents. Kept at a distance from public debate 11, the future of the space sector is tending to become a political issue 12, particularly with regard to its environmental and societal aspects. The influence of citizens on the development of space policies, which has been very weak until now, is highly likely to become decisive.
This influence should no longer be underestimated. At a time when France is struggling to balance its budget, it might be tempting to reduce the 3.2 billion euros of public subsidies dedicated to the space sector 13. Through the ballot box, their networks and their companies, citizens have the opportunity to defend a budget that they consider crucial for their security, their prosperity and the preservation of their environment. But they could just as easily be capable of the opposite when they are confronted with the first victims of falling space debris in inhabited areas, leading 14 public opinion to condemn the space sector more than is reasonable.
The CSR approach of companies, which is by nature transparent and collaborative, only makes sense when applied to an entire value chain and environment, and not in isolation. Therefore, to avoid a flawed approach, it is clearly important today to recognize the status of citizens as stakeholders, as they are users of, but also dependent on, space, and to include them in the space sector's CSR approach. Far from being a constraint, this recognition will constitute a competitive advantage for European space companies that, like Space X, know how to seize the opportunity to surround themselves with communities of citizens around their projects.
Our ability to propose a sustainable trajectory for the space sector, at the European level but also on a global scale, depends in part on how we approach this new reality, that of the need to extend the principles of the Aarhus Convention 15 to the space environment.
1. “You will lead the work on a future proposal for EU Space Law. In this context, as proposed in the Draghi report, you will work to introduce common EU standards and rules for space activities and harmonise licensing requirements.”
2. Without having the means or, it seems, the will to monitor its application. Our proposals to the ESA for a mechanism to monitor the criteria of the Charter have so far gone unanswered.
3 On the question of EU competence in space matters, see the article by Bas Jacobs, Understanding the EU's Competence to Harmonise Space Law Amid Publication Delays, Air and Space Law.
4 https://www.touteleurope.eu/l-ue-dans-le-monde/les-relations-entre-la-suisse-et-l-union-europeenne/
5. In particular by amending Article 9 of Regulation 2020/852, concerning the environmental objectives of the European Union, either by modifying its point “c): the sustainable use and protection of aquatic, marine [and space] resources”, or by adding a seventh environmental objective: “g): preserving access to space and Earth orbits”.
6. Cosmos for Humanity is one of the 23 member organizations of the technical secretariat (TS) in charge of carrying out the work on the development of the PEFCR for the space sector.
7. https://defence-industry-space.ec.europa.eu/policy-options_en
8. The European Commission has two alternative labels to choose from: the C4H label, which is managed by the NGO Cosmos for Humanity based in Strasbourg, and the SSR label, which is managed by the Space Sustainability Rating Association based in Lausanne, Switzerland.
10. https://cnes.fr/demarche-rse.
11. See the column by Alban Guyomarc'h and Clarisse Angelier: https://www.lesechos.fr/idees-debats/cercle/opinion-europeennes-ou-est-passe-le-spatial-2090257.
12 “L'Espace: un horizon en commun”, symposium organized in Toulouse on October 19, 2024 by the Institut La Boétie.
13 Senate, information report no. 697 “Financement de la recherche spatiale”, June 19, 2024.
14. The Federal Aviation Administration (FAA) envisages that by 2035, almost one person on Earth every two years will be hit by a falling satellite, and this is only for Starlink satellites. https://www.faa.gov/about/plansreports/congress/risk-associated-reentry-disposal-satellites-proposed-large
1.5 This convention, approved by the EU in 2005, is based on the idea that greater involvement and awareness of environmental issues by citizens leads to better environmental protection. It proposes action in three areas: 1) ensuring public access to information; 2) promoting public participation in decision-making; 3) extending the conditions for access to justice in environmental matters.
Related Posts
