The long arm of a European space lawby Jeff Foust
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| “It targets the most important problems and growing dangers that can endanger our future in space, namely, that space is increasingly congested and contested,” said Kubilius. |
The friction between the US and EU exists, at a lower level (and lower temperature) when it comes to space. Central to that is a proposed EU law that its advocates say will make it easier for space companies to operate within the EU while addressing concerns about space safety and sustainability. Opponents, particularly but not exclusively in the United States, see the legislation as adding an unnecessary regulatory burden on companies in both Europe and the US, driving up their costs and reducing their competitiveness.
The EU Space Act had been discussed for a couple years, with little insight into its contents, before the European Commission released a draft of the act in June, kicking off a long process of reviews and votes.
“It targets the most important problems and growing dangers that can endanger our future in space, namely, that space is increasingly congested and contested,” said Andrius Kubilius, the EU commissioner for defense and space, in a speech announcing the act.
The law would set requirements on issues such as collision avoidance procedures and debris mitigation as well as cybersecurity of space systems. It would also establish a single regulatory system across EU member states, superseding a patchwork of national laws and regulations. “This fragmentation is bad for business, bad for competitiveness, bad for our future in space,” he said.
The act would apply to companies in the EU’s 27 countries, but also to any company seeking to do business in the EU. This is not unusual: in the US, the FCC applies many of its rules both to American companies and those seeking access to the US market. This included the FCC’s decision in 2022 to reduce the time licensees would have to deorbit their satellites after the end of their missions from 25 years to 5.
This meant that the EU Space Act was scrutinized not just by European companies but also by those elsewhere, including the US. For example, satellite megaconstellation operators noticed that the act required satellites to be no brighter than magnitude 7 when seen from the ground, to minimize their impact on astronomy.
This is similar, but not identical, to recommendations astronomers working with the International Astronomical Union made. The difference is that the IAU recommendation includes a factor to reduce the magnitude for satellites in orbits above 550 kilometers, requiring satellites to be dimmer at higher altitudes because they are visible for longer. The lack of an altitude factor in the EU act would favor satellites operating at higher orbits—like Eutelsat’s OneWeb—over those at lower altitudes, like Starlink and Project Kuiper (now Amazon Leo).
The European Commission held a formal comment period from mid-July until early November, requesting public feedback on the draft EU Space Act. The commission received more than 100 submissions, including many from American companies and organizations.
Among those commenting was the US State Department on behalf of the federal government. “As a general matter, the United States expresses deep concern regarding measures in the proposed Act that would impose unacceptable regulatory burdens on U.S. providers of space services to European customers,” the State Department stated.
| “We hear concerns from both US and European firms that certain proposed regulations stifle innovation, exclude US participation and place financial burdens on US companies,” said Woodard. |
It argued that the act’s provisions would create “non-tariff barriers” to cooperation between the US and EU in civil, commercial and security aspects of space that could extend to intergovernmental cooperation between US agencies and both ESA and Eumetsat, which operates weather satellites. “That is not acceptable, and we expect many EU member states will share our concerns about application of the Act to national sovereign activities.”
The 13-page submission from the State Department, which it said involved input from more than 70 companies as well as trade associations, went into details about various issues it had with the proposed act, from how it might affect launches by American companies of European satellites to questioning the rationale for the act to define “giga constellation”, a term not used in industry, for constellations of 1,000 or more satellites. Such systems are being developed primarily by American, not European, companies, and under the act “giga constellations” would face different regulatory burdens than smaller systems.
Others from the US weighed in on the EU Space Act as well, such as SpaceX, by far the world’s largest satellite operator and whose Starlink constellation offers services throughout Europe. “While SpaceX supports many of the goals of the Space Act, the proposed draft goes too far in imposing requirements that are incorrect, inflexible, or infeasible,” the company stated in its submission. It outlined its “significant concerns” with the act that included the “giga constellation” definition as well as the magnitude 7 brightness limit.
The U.S. Chamber of Commerce criticized the “excessive compliance costs” the act would impose on non-European companies, arguing that could “inadvertently slow investment and service deployment within Europe and to European customers.”
Not every American company commenting on the EU Space Act was strongly opposed to it. “The EU Space Act is a timely and necessary initiative to protect orbital and spectral capacity,” noted satellite operator Viasat in its comments, largely supporting the proposed legislation.
However, in large part American companies and organizations have objects to various aspects of the act as currently written. The State Department outlined its objections on European soil last month when Scott Woodard, consul general at the U.S. Consulate in Hamburg, spoke at the Space Tech Expo Europe conference in Bremen, Germany.
“We hear concerns from both US and European firms that certain proposed regulations stifle innovation, exclude US participation and place financial burdens on US companies,” he said, a reference to the act.
“Our view here is simple: No one can regulate their way to a technological lead,” he added, calling instead for an approach like that in the US, where an executive order in August outlined plans to streamline commercial space regulations. “We hope the final EU Space Act will take a similarly forward-leaning approach.”
It’s not just the United States expressing concerns about the act. Others outside the EU whose space companies do business there see similar issues about the proposed act and its burden on companies.
One example is the United Kingdom. Naomi Pryde, partner and global co-chair for space exploration and innovation at law firm DLA Piper in the UK, said during a later panel discussion at Space Tech Expo Europe about the act that companies have asked her what it would cost to comply.
“Everyone is going to have reasonably significant costs at the outset in order to comply,” she said, but that companies in the UK and elsewhere outside the EU might have “significantly more” costs that she did not quantify.
As assessment prepared by the European Commission along with the draft act attempted to estimate those additional costs. The commission projected that the act would increase the cost of manufacturing a satellite in Europe by 2% and a launch vehicle by 1%.
Those cost estimates were the starting point for an assessment performed recently by London-based European Economics, commissioned by the Progressive Policy Institute (PPI). That study, released last week, assessed the full economic impact of the regulations on companies in the United States and Europe.
The study found that American companies doing business in Europe would lose 85 million euros in annual revenue and 7 million euros in profits. That came from the assumption that companies would pass on costs associated with the act to customers through higher prices, depressing sales depending on the level of price elasticity in individual markets.
| “The EU Space Act burdens Europe’s own companies, hits American firms too, and leaves China with a free pass. That is not a formula for competitiveness or security,” Guenther said. |
The impact on European companies would be far worse, though: 245 million euros in revenue and 100 million euros in profit would be lost each year, the study concluded. The study also found that the higher costs would depress investment in European space companies by up to 3.45 billion euros over the long term.
“This approach harms both sides of the transatlantic partnership just as China is successfully moving toward dominance in space, which has far-reaching implications for broad swaths of modern society,” Mary Guenther, head of space policy at PPI, said in a statement. “The EU Space Act burdens Europe’s own companies, hits American firms too, and leaves China with a free pass. That is not a formula for competitiveness or security.” (China is largely unaffected by the EU Space Act because Chinese companies export very little in space products or services to EU nations.)
Catherine Doldirina, general counsel at D-Orbit, an Italian space transportation company, said on the Space Tech Expo Europe panel that her company was watching both the EU Space Act as well as an Italian space act passed just in June. “For Italy, it would be extremely important to streamline the development and adoption of its national legislation in parallel and in alignment with the EU framework,” she said, to avoid adopting rules only to change them to match the EU act.
“The ideal outcome would be this one-stop shop where operators will not need to go to different authorities” in different EU nations, she said. “That will enable industry growth.”
But, she added, “the devil is in the details.”
Next steps
The European Commission is examining the comments as it works on a new version of the act. Denmark, which holds the rotating presidency of the EU Council, aims to produce a revised draft before its term concludes at the end of the year, said Rodolphe Muñoz, team leader for space situational awareness and space traffic management in the European Commission’s directorate responsible for space, at the Space Tech Expo Europe panel.
He was the main defender of the EU Space Act on the panel. Regarding American criticism of the act, he noted there was a “very open, very transparent” discussion about the legislation in September during the 13th EU-US Space Dialogue. “The US is entitled to have the position they want, and we respect it,” he said.
While the US government’s formal comment submitted by the State Department was very critical of the act, he noted that most of the submission dealt with specific issues with the act that he felt could be addressed: “a piece of cake,” he said.
“I prefer a position where the first page is rather negative and 12 others are manageable than the contrary: a very good idea but not feasible,” he said.
Two days later at the conference, a member of the European Parliament expressed his support for the act. Christophe Grudler, a member of Parliament from France, said discussions among the various political groups there were underway about the act with widespread support.
“We have a shared view today with all the political groups,” he said, “that everybody understands that space is becoming dangerously close to a ‘far west’ scenario,” an apparent reference to concerns about a “Wild West” environment in orbit.
“You launch thousands of satellites and never mind what the others think. It’s clear we can’t continue like that,” he said.
| “I prefer a position where the first page is rather negative and 12 others are manageable than the contrary: a very good idea but not feasible,” Muñoz said. |
He lumped objections to the EU Space Act into two categories. One was from those who opposed changes to thew status quo, he said, despite those concerns about the orbital environment. A second came from European governments, trying to defend their own national rules that might conflict with those in the proposed act.
He didn’t identify the countries involved or the rules they were trying to protect, but argued such efforts conflicted with the act’s goal of harmonizing rules across the EU. “Fragmentation is the enemy of competitiveness,” he said. “Most of the member states agree with the principles of the Space Act.”
However, Grudler said there was room for improvement for the act. “There are some redundancies in the text. We’ll find a better way,” he said, but didn’t discuss what he considered to be redundancies.
The current path for the act, assuming an updated version is released in the coming weeks or months, would set up an initial vote by the European Parliament by May or June, he said. Final passage would follow some time in 2027, kicking off a transition period that would last a couple years.
“The idea is to be ready at the end of the decade for the application of this regulation,” Grudler said. “If companies start feeling the impact by the end of this decade, that would be great.”
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