Germany: Urgently Needed: Waiting For Germany's (new) Space Strategy And A Space Act

"Space and the new space sector are key technologies of the future. We aim to strengthen the national space programme and the European Space Agency (ESA) and preserve their autonomy. We are developing a new space strategy taking into account the avoidance and recovery of space debris.

We shall strengthen Germany as an aerospace production location. We support the research and market escalation of synthetic fuels that enable climate-neutral flying. The contracting procedures in connection with the aeronautics research programme for the development and use of digital tools, process development, materials research and lightweight construction are to be further accelerated and advance payments made possible. We are strengthening research into the use of sustainable fuels, quieter engines and a platform for the simulation and optimisation of the entire aviation system in terms of its impact on the climate."¹

Germany's Space Strategy and a Space Act

This section on aerospace taken from the Coalition Agreement between the SPD, The Greens and the FDP dated December 2021 is the only reference dedicated to the topic of aerospace in this 178-page document. Despite all the criticism however, the Coalition Agreement officially announced a "new space strategy" which will be confirmed again in autumn 2023 by the responsible federal government coordinator, Dr Anna Christmann. On the basis of this timetable, about 13 years will have ultimately passed since the Federal Government's old space strategy came into force in November 2010. The existing space strategy that has basically remained unchanged for 13 years, which forms the basis for German activities in space, requires comprehensive adaptation to substantially changed economic, (geo)political and social conditions, not least against the background of the huge importance of space programmes for mobile telephone networks, navigation systems, satellite data-based applications, air traffic, intelligent networks, banking and much more.

In addition to the not yet finalised space strategy, there is still no Space Act in Germany. In the absence of such national space legislation, the United Nations Outer Space Treaty (Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies) of 1967 applies, which in particular establishes a liability regime that makes it almost impossible for market players to pursue their business models in Germany from a risk point of view.

The area known as "New Space"

While a space strategy can set the course for future activities of German companies, not least within the meaning of the Coalition Agreement, the creation of a national space law is essential, especially for the area of "New Space" - a "central future technology" - which is also explicitly mentioned in the Coalition Agreement.

"New Space" is the term used to describe the progressive commercialisation of space and its increasing integration with the non-space economy, which is being driven in particular by private entities. Although space agencies are still the largest players, start-ups are increasingly developing new business models for applications in space and entering into direct competition with established companies. In this context, the development of small satellites and their launchers (so-called "micro-launchers") is a core theme of the new space age. The small satellites are supposed to be the key to future technologies such as autonomous driving and the Internet of Things on lower orbits. They are transported into space by means of micro-launchers either individually or via a ride-share programme. In Würzburg, the research institute Zentrum für Telematik (ZfT) is working on the fully automated, series production of small satellites. To date, Elon Musk's space company Space-X has deployed more than 1,800 small satellites in low earth orbits, which are intended in particular to contribute to better Internet provision.² The first commercial European microsatellite ESAIL, whose core components were produced in Germany, was launched from the European spaceport Kourou in French Guyana on 3 September 2020 on an Italian launch vehicle.³
The three German space companies Rocket Factory Augsburg, Hyimpulse and Isar Aerospace are currently in a neck-and-neck race to be able to offer the first low-cost, commercial space transport of small satellites using micro-launchers.⁴ Possible European launch sites for this exist in Great Britain, Norway and Sweden. The consortium "German Offshore Spaceport Alliance" is researching a floating launch platform in the North Sea to launch micro-launchers from a special ship.

As a key industry, space is of great strategic importance. Research, climate protection, communication and security are crucial space activities, while private investment, innovation and progress in Germany can give a new boost. Germany invests (as of 2020) 0.05% of its gross domestic product in space activities, lagging well behind the USA which is the largest investor in space with 0.22%. In 2020, the Federation of German Industries (BDI) outlined the opportunities for German industry in an article on a German micro-launcher site: "According to current estimates, the total global space market will grow more than sevenfold from 360 billion US dollars (2018) to up to 2,700 billion US dollars by 2040."⁵ The New Space sector is also becoming increasingly interesting for investors. According to a BDI study, the industry was able to raise around 308 million euros in capital in 2020, almost twice as much as in the previous year. In addition, the New Space sector is seen as an "enabler" for other business areas and technologies: around three quarters of the New Space companies featured in the BDI study generate business with customers who previously had no connection to the space sector.

Creation of a reliable legal framework

In order to effectively promote the commercialisation of space and thus the New Space sector, private market participants need a clear and reliable legal framework in the form of a national space law, in order to be able to make investment decisions. In particular, international and national liability regulations, regulations regarding planning procedures for runways/launch pads, for example, and the clarification of ownership (raw materials) in space are crucial for investors and companies. The urgency of creating a national space law results from the insufficient regulations in the current United Nations (UN) Outer Space Treaty. Countries such as the USA, Japan, Luxembourg and France have already enacted national space laws.
In France, for example, there is an upper liability limit of EUR 60 million, up to which the responsible company must be liable for damage caused by rockets or satellites on Earth. In Germany, as long as there is no national space liability regime, the state is fully liable for accidents and damage on Earth according to the UN Outer Space Treaty, without recourse to the responsible company. There are currently around 5,465 satellites in space (as of 2022)⁶, at least 1,800 of which are in low Earth orbits. In the face of this increasingly crowded space and increasingly diversified players, the absence of a national liability regime is a critical liability gap that hinders investment.

Planning procedures for the construction of runways or launch pads for satellites also have no legal basis without national law. Permits can therefore only be issued on a case-by-case basis. The bureaucratic effort involved in these case-by-case approvals makes Germany, for example, less attractive as a location for rocket launches compared to other countries with corresponding legislation. In this respect, too, the absence of a space law inhibits investment in Germany as a space location.

With regard to the question of ownership and use of raw materials in space, countries such as Luxembourg, Japan and the USA have stipulated in their national space laws that rare earth elements, metals and raw materials belong to the country that mines the raw materials. Although so-called space mining is in itself a legal grey area, experts suspect that billions of dollars of raw materials, which are important for many key technologies, can be found in the celestial bodies. A German space law in this respect, or at least the introduction of international regulations in this regard, could also secure Germany a place on a possible raw materials market in outer space.

Outlook

In the past, near-monopoly market conditions, especially in Western countries, led to high prices for both rocket and satellite systems and were only broken up by the change to New Space. Legal certainty and unbureaucratic planning procedures are now the key to the further successful economic development of the New Space sector in Germany. The general prospects for this on the business side are encouraging; Germany's prospects in the field of small satellites and their transport into space are also good. The innovative start-ups that have settled in Germany and are already successfully researching small satellites and their micro-launchers are internationally competitive. They all rely on the timely creation of a solid space strategy and a corresponding national law that enables them to carry out rocket launches in Germany and that creates legal certainty for the construction and planning of launch sites.
Once again, the German government is called upon to quickly remedy the legal framework conditions and create clear, reliable regulations in order to promote the competitiveness of new space companies and make Germany attractive to companies and investors as a space location.

Footnotes

¹ cf. page 28 of the Coalition Agreement 2021 - 2025 between the Social Democratic Party of Germany (SPD), Alliance 90/The Greens (BÜNDNIS 90 / DIE GRÜNEN) and the Free Democrats (FDP) "Mehr Fortschritt wagen Bündnis für Freiheit, Gerechtigkeit und Nachhaltigkeit" (available from all three coalition partners: SPD, Alliance 90/The Greens, FDP)

² Cf. SZ, 9 February 2022, Solar storm causes 40 Space-X satellites to crash

³ Cf. DLR, 3 September 2020, Microsatellite ESAIL launches into space with new satellite platform

⁴ Cf. SZ, 2 February 2021, Race into Space

⁵ Cf. MM 2 February 2021, Which start-ups are involved in the German race to space

⁶ Source: Statista 30 April 2022, number of satellites in space distributed by country

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