1. Key Trends in outer space investment and activities
Overview of civil space program
The German Federal government's space strategy is built on three pillars:
- Funding of the German Aerospace Centre (Deutsches Zentrum für Luft- und Raumfahrt e. V, or DLR);
- Germany's participation in the European Space Agency (ESA); and
- The National Programme for Space and Innovation (Nationales Programm für Weltraum und Innovation, or NPWI), which is managed by the DLR.
The DLR is Germany's national aeronautics and space research centre, engaging in a wide range of research and development projects in the fields of aeronautics, space, energy, transport, security and digitalization. Acting as the space agency of the Federal Republic of Germany, the DLR is responsible for the planning and implementation of German space activities on behalf of the German Federal government. It also develops and manages the NPWI (see below for more details) and represents the interests of the Federal Republic of Germany in space-related international bodies. The DLR also acts as an umbrella organization for the DLR Project Management Agency, which coordinates the technical and organizational implementation of projects funded by a number of German federal ministries and is also entrusted with sovereign tasks in the administration of funding.
As the pan-European space organization, the ESA deals with all aspects of space travel and pools the financial and scientific resources of its 22 member states, including Germany, which is one of its founding members.
Within the framework of the NPWI, the DLR supports companies, universities and other research projects providing funding centered on the following core areas: earth observation, satellite communications, space exploration, launch systems, digitalization of space transport, space technologies and space robotics. For 2023, the NPWI has been allocated a budget of €340m.
Generally speaking, two types of measures are implemented through the NPWI. Besides classic, grant-based funding through subsidies, new developments are also stimulated through the commissioning of certain projects. Among others, projects from companies, universities, colleges and foreign partners are funded. In order to receive a grant or subsidy, companies and research institutions must submit project applications for funding to the DLR – either following calls for proposals or on their own initiative. The DLR has discretion in awarding funds, in terms of both the recipient of the funds and the amount of the funds. The DLR is available as a contact for questions related to funding requirements. Micro, small and medium-sized enterprises are expressly encouraged to participate.
Funding is, inter alia, provided for projects related to basic space research (Grundlagenforschung) and industrial space research (industrielle Forschung), including the development of commercially viable prototypes and pilot projects. Funding is also provided for the experimental development of prototypes. The volume of funding depends on the project and amounts to a maximum of €40m. The subsidies granted do not have to be repaid.
Conditions for funding include:
- The recipient must be an entity based in the Federal Republic of Germany conducting activities in at least one of the abovementioned fields;
- The project to be funded must be thematically, temporally and financially definable and must not yet have started;
- Companies must have their own interest in the project to be funded and provide equity;
- The award of funding must encourage the recipient to engage in increased research and development activities;
- Sustainable project development (beyond the duration of the funding) must be recognizable; and
- The recipient must be able to prove that the funds have been used for the intended purpose.
The NPWI also serves to promote innovation and the transfer of technology and expertise between space and other sectors, on the one hand transferring the results of space research to other areas ("spin-off"), as well as opening up the developments of other areas relating to space initiatives ("spin-in").
As a member state of the ESA, Germany also benefits from ESA initiatives such as the General Support Technology Program (GSTP), as well as Advanced Research in Telecommunications Systems (ARTES) and Scale Up.
The GSTP is a long-term technology program package launched in the 1990s with the aim of converting promising engineering concepts and models into a broad spectrum of usable products and applications for space. The GSTP's activities cover all technologies, with the exception of telecommunications – which have their own program called ARTES, supporting the development of advanced satcom products and services.
ScaleUp was launched more recently, in November 2022, in order to support and accelerate space commercialization in Europe. The aim of the program is to encourage companies to take a risk based approach, attract private and institutional investors and introduce business innovation through the ESA Business Incubation Centres (BIC).
The BIC initiative was founded with the particular purpose of encouraging the commercialization of European space endeavours and supporting start-ups. In addition to being given access to space technologies, experts and technical facilities, eligible businesses can also receive financial support (€50,000 without equity capital). Germany has contributed €22m to this program. Applications are open to companies that are in the start-up stage or for which a maximum of three (or five) years have passed since they were set up, and which develop a product or deliver a service with a space connection. Further requirements, such as a legal work permit in Germany, may apply. There are three BICs in Germany.
In more recent funding developments, the DLR organized a Microlauncher contest, which ran from May 2020 until December 2022. The competition was open to German start-ups that had developed a launch system with the goal of commercially operating microlaunchers to offer transport services from Earth to orbit. Over the course of the two years, three start-ups were selected (HyImpulse Technologies GmbH, Isar Aerospace Technologies GmbH and Rocket Factory Augsburg AG), which will benefit from a total amount of €25m in funding.
Private sector developments
In the private sector, there is a growing New Space community in Germany, consisting of established companies, as well as an independent start-up scene working on new possibilities for using space technology economically. However, the lack of national space legislation (discussed further below) remains a major obstacle to the growth and competitiveness of the German space market.
National strengths in outer space capability
Historically, the strength and focus of the German space industry has been in research and the development and the manufacture of parts, components and systems. More recently, however, against the backdrop of a growing New Space community, a particular emphasis on small satellite technology and launch systems has emerged, with the German government supporting related university research projects, holding competitions for the development of new small satellite platforms and making funding available for start-ups.
2. Outer space regulatory framework
What agencies regulate commercial space activities?
As noted above, the DLR is Germany's space agency and is responsible for planning and implementing German space activities and representing Germany's space-related interests at international level, in particular at the ESA. In 1998, the German Government transferred all administrative responsibilities related to space to the DLR by law under the Space Task Transfer Act (Raumfahrtaufgabenübertragungsgesetz).
The ESA and the European Union Agency for the Space Program (EUSPA), which was established in its current form in 2021, carry out the implementation of the EU Space Policy. The EUSPA is responsible for market development, the operation of all EU space components and their safety accreditation. The ESA continues to be responsible for the technical design and development of the EU space programs.
International space treaties
Germany has only ratified the following four principal UN space treaties:
- The Outer Space Treaty;
- The Rescue Agreement;
- The Liability Convention; and
- The Registration Convention.
Germany is not a party to the Moon Agreement.
Germany has also ratified the following additional international agreements concerning outer space:
- The Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space and Under Water;
- The Convention Relating to the Distribution of Program-Carrying Signals Transmitted by Satellite;
- The Agreement Relating to the International Telecommunications Satellite Organization (ITSO);
- The Agreement on the Establishment of the INTERSPUTNIK International System and Organization of Space Communications;
- The Convention for the Establishment of a European Space Agency;
- The Convention on the International Mobile Satellite Organization;
- The Convention Establishing the European Telecommunications Satellite Organization (EUTELSAT);
- The Convention for the Establishment of a European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT); and
- The International Telecommunication Constitution and Convention.
In terms of international treaties, while Germany is a signatory to the Cape Town Convention and has also signed the Space Assets Protocol, it has not ratified the Cape Town Convention to date. The Space Assets Protocol has not yet entered into force as it has not been ratified by a sufficient number of countries.
Legislation and regulations dealing with outer space activities
With Germany's existing national space strategy having been published about 13 years ago, the German Government is currently drafting a new space strategy which will focus on the following six core areas:
- Limiting the climate crisis and protecting resources and the environment;
- High-tech and new space, looking at space as a growth market;
- International space research and exploration;
- Sustainability in space;
- Security, strategic capability and global stability; and
- Technologies and talents of the future.
A first draft of the new space strategy is expected in the first half of 2023.
For over two decades, there has been discussion about the adoption of a German Space Act, which was also identified as a principal goal for the space sector in 2010 when Germany published its current national space strategy. Despite it having been included in coalition agreements under previous governments, the current German government has not made any clear commitments regarding the adoption of national space legislation.
In the absence of any single, consolidated national space legislation, the regulatory landscape is patchy when it comes to space-related activities, and many issues relevant to space are yet to be regulated (including issues relating to insurance, liability and launching activities).
The main piece of national legislation which regulates air traffic in Germany is the Air Traffic Act (Luftverkehrsgesetz). Under the Air Traffic Act, spacecraft, rockets and similar missiles are considered "aircraft" – and therefore fall within the ambit of the Air Traffic Act while they are in airspace.
Further, the Telecoms Act (Telekommunikationsgesetz), first passed in 1996 and last amended in 2021, regulates the usage of orbit slots and frequencies.
Additionally, the Satellite Data Security Act (Satellitendatensicherheitsgesetz), as supplemented by the Satellite Data Security Regulations (Satellitendatensicherheitsverordnung), applies to the operation of highly capable space-based earth remote sensing satellites and the distribution of data generated by these satellites. It was passed in 2007 and last amended in 2021.
Are there any licensing or approval requirements for commercial space operators?
The Telecoms Act states that any person, natural or legal, wishing to use orbit slots and frequencies by means of satellites will be subject to the obligations imposed by the International Telecommunication Union Constitution and Convention. The Telecoms Act requires that, prior to operating a satellite, the operator must first obtain orbit and frequency usage rights from the applicable regulatory agency in Germany, the Federal Network Agency (Bundesnetzagentur).
Once the Federal Network Agency has received the application from the satellite operator, it will coordinate and notify the satellite system to the International Telecommunication Union and then grant the applicant the necessary orbit and frequency usage rights, provided the conditions set out in the Telecoms Act are fulfilled.
The conditions in the Telecoms Act are supplemented by an additional set of administrative rules published by the Federal Network Agency in 2018 under the title "Administrative Regulation for the Registration, Coordination and Notification of Satellite Systems in the German Name and for the Transfer of Orbit and Frequency Usage Rights" (Verwaltungsvorschrift für die Anmeldung, Koordinierung und Notifizierung von Satellitensystemen im deutschen Namen und für die Übertragung der Orbit- und Frequenznutzungsrechte (VVSatSys)).
Under the Satellite Data Security Act, supplemented by the Satellite Data Security Regulations, if a space-based Earth remote sensing system (normally a satellite equipped with remote sensors) is considered to be a high-grade system, the Satellite Data Security Act requires the satellite operator, as well as the data supplier, to each obtain a license from the German Government authorities. The details of the procedure are specified in the Satellite Data Security Regulations.
More generally, according to the Air Traffic Act, aircraft (subject to certain exceptions) are subject to the compulsory use of airfields, meaning aircraft may only take off and land at the airfields designated and approved for them. Airfields may only be established and operated with a permit. It follows that the take-off and landing of aircraft on German territory outside of authorized airfields will require the permission of the local aviation authority. In order for a space operator to launch a space object from German territory, the operator would therefore have to obtain approval for the establishment and operation of the space station, from a flight security perspective similar to approval for airfields but also from a land planning perspective.
There are no mandatory insurance requirements for commercial space operators.
Space objects register
In Germany, space objects can be registered with the German Aviation Authority (Luftfahrtbundesamt, or LBA), which maintains a register of space objects as part of the general aircraft register (Luftfahrzeugrolle der Bundesrepublik Deutschland – Band R Raumfahrzeuge). However, in the absence of national legislation, commercial space operators are neither obliged to register their space objects with the LBA nor to disclose any information regarding their space objects to the LBA.
However, a registration at the general aircraft register is advisable, as generally only registered aircraft (spacecraft within German airspace) are allowed to use the German airspace in accordance with the Air Traffic Act.
Property rights in outer space
There are no specific regulations dealing with property rights in outer space.
The UN Space Debris Coordination Committee Guidelines apply. However, without incorporation into national law, those Guidelines are not binding.
It is highly likely that the Federal Ministry for Economic Affairs and Energy would conduct an audit in case of a share acquisition regarding a German company by a non-EU buyer, if the German company develops or manufactures goods or technology intended for use in spaceflight or for use in space infrastructure systems (§55a I Nr. 18Außenwirtschaftsverordnung– AWV)
Additionally, authorization will be needed for non-EU exports or
brokering services of certain space flight-related products,
materials or technologies of "dual use", meaning that the
object can be used for both civil and military purposes (Art 2
Nr.1, 3 I Dual Use Regulation in connection with Part XI –
Category 9 Of Annex I to Dual Use Regulation).
Regarding carrier rockets, an authorization is required even for shipments within the EU (Art 11 I Dual Use Regulation in connection with Part I of Annex IV to Dual Use Regulation).
The competent authority is the Federal Office of Economics and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA), § 13 I Außenwirtschaftsgesetz – AWG).
Land planning permits
Generally, a construction permit would be required for any space industry-related building projects. Further, due to the required scale of buildings and stations to be used for the outer space industry, projects will usually be realized in outdoor areas under the building code. In outdoor areas, buildings are generally prohibited, except if public interests are not opposed and if sufficient development of that area is ensured. Public interests would be opposed if, inter alia, the project causes harmful effects on the environment, the landscape, water reservoirs or agriculture. Given that space industry-related projects would typically not comply with these requirements, these projects would only be feasible within the scope of a detailed land development plan to be issued by the relevant municipality.
Under the German Emission Control Act (Bundesimmissionsschutzgesetz – BImSchG), noise, air pollution, vibrations, light and heat caused by the launching of space objects by fuel-powered carrier rockets are defined as "emissions."
Stationary space stations would require a specific emission-related authorization, which would simultaneously constitute a general construction permit.
Authorization is required with regard to the War Weapons Control Act and the Explosives Act. In the more likely case that the Explosives Act applies, the operator is entitled to approval if the operator and its managers are reliable.
The Artemis Accords
Germany is not yet a party to the Artemis Accords.
Other relevant regulatory issues of note
In general, the lack of national space legislation is a constraint on the growth and competitiveness of the German space market, which lacks certainty and clarity both for companies developing products and technology as well as investors.
The lack of a national space law also poses other regulatory issues, for instance regarding liability for accidents and damage caused by outer space activities. In the absence of a German space liability regime, the state will be fully liable for such accidents and damage with no recourse to the responsible company in accordance with the Outer Space Treaty.
3. Major near-term challenges and opportunities
With long-standing expertise and focus in research and the development and the manufacture of parts, components and systems, the German space industry has significant progress in recent years with new companies settling which focus on small satellite technology and launch systems. Germany is one of the leaders in new space technologies, with only the United States and France issuing more space-related patent applications.
Despite the encouraging success in terms of innovation, Germany is lagging behind when it comes to the commercialization of its space industry. While the German government runs a range of programs aimed at supporting the space sector, including by financial subsidies, Germany invests only 0.05 percent (as of 2020) of its gross domestic product in space activities, ranking well behind the United States (which is the largest investor with 0.22 percent) and also other European countries (with France for instance investing more than double compared to Germany). The comparison with its European neighbours is particularly striking given that Germany is Europe's largest economy.
With the space industry forecast to grow rapidly over the next few years, this is a crucial time for the German space sector. In particular, the need for a national legal framework regulating commercial space activities is becoming more and more obvious. The space industry would benefit from clear and comprehensive legislation, establishing standards for commercial space operations, limiting financial and legal liability for German companies in the case of damage or accident, enabling affordable insurance coverage and incentivizing private investors.
Over a decade since publishing its current national space strategy "Making Germany's Space Sector Fit for the Future," which emphasized the adoption of a national space law as one of the principal goals for the space sector, it is unclear if Germany is any closer to achieving this goal. Although the current government has not made any clear commitments regarding the adoption of national space legislation, it recently reaffirmed its intention to enact national space legislation at the DLR's annual press conference in March 2023 which is a promising sign that Germany may be able to be able to capitalize on its recent innovations and technologies in the space sector and not fall behind other economies, in particular its European neighbours which have already adopted national space laws.
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