NewSpace, Space Economy and the legal framework for space acteurs in Germany

"NewSpace isn't about spleeny billionaires and the colonisation of Mars, but about essential services for the Earth. Space travel is not an end in itself." (BDI President Siegfried Russwurm in his speech at the opening of the Space Congress 2023 in Berlin on 18 October 2023).

In quick succession over the past few weeks, the following was effected:

• the signing of the so-called "Artemis Accords" ("Accords") by the Federal Republic of Germany (14 September 2023),
• the publication of the Federal Government's "Space Strategy" (27 September 2023), and
• the publication of the study Weltraumbeflügeltes Deutschland by management consultants Roland Berger and the IDW ("RB/IDW Study"), in the course of BDI's Weltraumkongress 2023 on 18 October 2023.

Media attention on space topics has been considerable for some time now. This is well-deserved and an expression of the growing awareness regarding the strategic, technological and economic importance of the space sector and the rapidly growing space economy in Germany. In contrast, the legal framework within which the players in the space economy in Germany operate is patchy and, where it exists, is spread across a conglomerate of international agreements, international legal sources and individual specialised legal regulations.

NewSpace and Space Economy in Germany

The RB/IDW study, like a previous study by DELOITTE, describes the opportunities of NewSpace for Germany as a business and technology location.

NewSpace as a catch-phrase describes the commercialisation of space through the commercial services of both, the already established and young private companies/start-ups and their integration with government activities. As part of the BDI's NewSpace initiative, the activities of established companies, medium-sized providers, start-ups and stately institutions are brought together accordingly. The declared aim of the initiative is to support the digital transformation and, overall, to maintain and expand the technological leadership of German companies in the space sector. The DLR's Space SMEs working group pursues similar goals, especially in relation to small and medium-sized enterprises. Start-up hubs set up at universities and the various existing programmes and activities of DLR, ESA and other agencies support the rapid growth of a German startup scene in the space sector.

In addition to established companies, more than 200 start-ups can now be categorised as also belonging to NewSpace in Germany and are enjoying considerable interest from German and international investors, as evidenced by successful financing rounds. This interest is not surprising given the creativity and quality of the companies. The economic activity of private NewSpace players is not a closed shop. According to the BDI, more than 75 % of NewSpace players already have customers outside the space sector. The global market for space-based applications and services was estimated at around EUR 320 billion in 2021 and is expected to be worth around EUR 500 billion in 2023 (according to a British investment house). The RB/IDW study assumes a multiplication of these numbers by 2040.

Established German space economy players have had and continue to have their internationally recognised technological focus primarily on the development and manufacture of systems and components as well as the provision of satellite services. However, companies that develop new technologies and offer logistics services, including micro-launchers for small satellites, an entirely new generation of satellites and related components, as well as a variety of new solutions for collecting and transmitting data in and from space and analysing such data, are increasingly coming to the fore.

Studies assume that the space economy will grow in the short term, particularly in the area of logistics relating to the launch and operation of satellites and the data obtained from them (e. g. for applications in the fields of meteorology, agriculture, health, automotive, consumer goods and infrastructure) as well as tourism. A trend report focussing on the international start-up sector confirms a concentration of activities by NewSpace players in areas such as small satellites, space data, smart materials and advanced communication. The already existing and additionally planned large constellations (mega-constellations) of small satellites and the very diverse questions that arise in view of the considerable number and increasingly individualised use of these satellites are moving into focus. Currently, in view of the mergers of large satellite operators (Eutelsat/OneWeb; ViaSat/Inmarsat) that took place in 2023 alone, questions of competition, dominance and strategic control are also arising.

Other potential growth areas of the space economy, e. g. industrial production, solar energy and the area of resource extraction in space, often referred to as space mining, are expected to be relevant for players in the space economy in the future. However, a wide range of development activities by private companies can already be observed in this area too. Scientific investigations that could prepare the ground for later commercially motivated exploration have also been underway for years (e. g. NASA's Bennu and Psychi missions, Japan's Ryugu mission). However, the topic is already attracting professional commercial interest. In 2024, for example, the multi-day Space Resources Week will be held in Luxembourg for already the sixth time.

Legal framework applicable in Germany

Unlike the USA, UK, France, Japan, Luxembourg, Denmark, Austria, Belgium, Portugal and the Netherlands, Germany does not have a national space law yet.

The regulations under which players in the space economy operate in Germany are therefore currently largely the result of special regulations. Important use cases are, for example, the regulations on the registration of frequencies and orbits and on data transmission in the Satellite Data Security Act and the Telecommunications Act.

Various sources of international law are also directly applicable in Germany.

The national legislation of a number of countries is already more advanced (e .g. France, USA, Luxembourg), although some of the content has been criticised. The Schematic Overview of National Regulatory Frameworks for Space Activities by the Legal Sub-Committee of COPUOS (UN Committee on the Peaceful Uses of Outer Space) provides a comparative overview of the status of national legislation.

At EU level, not only was the EU space strategy announced, which primarily focuses on aspects of safety, security and sustainability, but work on an EU space law was also announced. The aim is to harmonise the standards applicable in the EU, at least in the areas mentioned. It will be interesting to see which areas the EU space law will address and how a future EU space law will "fit" between the principles of international law and the existing national space laws in the EU.

Legal topics to be attended

As planning in the space sector regularly has to take place over longer periods of time, the lack of a German space law should tend to be particularly noticeable in the rapidly developing space economy. There is a fundamental risk that players in the space economy will move to legally regulated and therefore "safer" or more attractively regulated countries for this reason alone. However, NewSpace players are waiting with mixed feelings for a national space law; although supportive measures and clarity are expected in areas that are unclear, there are also fears of restrictive overregulation. Legislation in certain countries is already targeting companies that are fleeing regulation deemed to be to harsh in their homecountry.

The regulatory topics (not always the solutions) in the national space laws of different countries are very similar. The following topics are considered to be particularly relevant for a German space law:

• Registration and prerequisites for activities in space;
• Liability, recourse and limitation of liability for damages and their insurance;
• IP protection for inventions or know-how acquired in space;
• Environmental protection and sustainability requirements and the relationship to related national regulations;
• Ownership and registration of space objects;
• Data protection and cybersecurity in coordination with the existing Satellite Data Security Act and other specialised laws;
• Questions on foreign investments, export control and sanctions regulations;
• Ownership and utilisation rights to materials and in relation to space bodies as well as related extraction and transfer rights;
• Law enforcement.

Not all relevant problems can be solved at national level. A standardised international solution is required for many issues in order to avoid a state of convenience effect – which can already be observed today in some cases – or simply to establish a regulation that is appropriate to the circumstances. Topics such as registration requirements, resource utilisation, sustainability, safety and liability, traffic management and space debris are particularly worthy of mention. By definition, space law cannot be thought of solely in national terms.

Particularly in the area of the use of orbits and frequencies by satellites, internationally harmonised and partially national German legal structures already exist. However, in view of the sharp increase in "registrations" (...reservations...) of orbits and frequencies, these are already reaching the limits of feasibility and expediency, at least international. In the coming years, the many issues relating tolarge constellations (mega-constellations) of satellites will (have to) be the main subject of legal development and further development at national and international legal level.

Significance of the signing of the Artemis Accords

The Artemis Accords ("Accords") signed by the Federal Republic of Germany on 14 September 2023 describe themselves as a political declaration of intent. The name is derived from NASA's Artemis programme, a manned moon mission now probably planned for 2025 to 2028. The Accords were first signed by participants in the Artemis programme on 13 October 2020 at the initiative of the USA/NASA. The Accords have since been signed by more than 25 countries. In September 2023 also by the Federal Republic of Germany.

The Accords provide for basic principles that will become important for the cooperation between the programme partners during the implementation of the Artemis moon mission, but are not limited to the upcoming Artemis mission. The principles include peaceful utilisation and transparency with regard to the respective national space strategy and the use of resources. The Accords also include regulations on the registration of space objects, the accessibility of scientific data, the utilisation of space resources and the avoidance of space debris. The Accords expressly recognise the primacy of binding international law regulations, both on specific topics and in general.

The Accords were criticised from the outset, in some cases severely. Criticism was inter alia levelled at the wording on the use of resources. According to the Accords (...not inherently...), the extraction and utilisation of resources by private parties should not be regarded as appropriation prohibited under international law. The issues associated with the utilisation of resources in outer space (utilisation for the benefit of all, prohibition of appropriation, etc.) have been the subject of an "intensive competition of ideas" between political actors and experts for years. At international level, the struggle for a binding solution regarding the use of ressources under international law is officially taking place in the UN Committee on the Peaceful Uses of Outer Space (COPUOS) and the corresponding Legal Sub-Committee.

On the occasion of the signing of the Accords, the Federal Republic of Germany published an additional declaration in which it expressly places the signing of the Accords within the framework of current and future international law, which propagate the principle of resource utilisation for the benefit of all. The mere existence of the supplementary declaration shows that Germany is aware of the discussions associated with the existence and certain contents of the Accords.

Space strategy of the Federal Republic of Germany

The German government's space strategy highlights key projects in each of the nine fields of action described, including a small satellite initiative, a Space Innovation Hubbased at DLR and the adoption of a German Space Act.

Critics complain that there is a great deal of generalisation, in particular that no concrete measures have been announced to establish German government agencies as institutional "anchor customers" of a space economy in Germany. The RB/IDW study emphasises the advantages of an anchor customer system in comparative countries in detail. However, statements in the space strategy that deal with easier access for young companies to participate in award and procurement processes give rise to hope that the importance of the topic has been recognised. This would be in line with the objectives of the EU Space Strategy, which was published in January 2023 and describes "flexibility, agility and real innovation" as one of the four pillars of the EU Space Strategy.

The declaration of intent to participate in international institutions and the presentation of political goals with regard to security and sustainability are given a lot of space in the report. The establishment of a Space Innovation Hub based at DLR was announced. The clarity with which the goal of greater involvement of SMEs, young companies and start-ups is emphasised is also to be welcomed.

Details on the future German Space Act, which is also emphasised as a key project in the space strategy, are hardly discernible. The funding announced via various institutions, at least thematically, should be emphasised positively. However, mentoring, knowledge exchange and financial support should also be accompanied by procedural structures, e. g. actually with regard to awarding and procurement and with a view to planning regulations for testing, production and application of developments. A timetable for a German Space Act has not yet been officially announced.

Concluding remarks

The development of the space economy in Germany has long since overtaken legislative developments in Germany as a result of technical expertise and entrepreneurial creativity, investors' willingness to take risks and thanks to specific government funding programmes and support from DLR and specialised hubs around universities, companies and regions.

It is to be hoped that a future German Space Act will not only be presented in the short term, but above all will provide for clear and well thought-out regulations in terms of content that will enable the players to act in a competitive manner and support the further development of this technology sector rather than hinder it. Not everything may be transferable, but in view of the experiences of other EU countries with the effects of their national legislation on the respective space economy, there should be a good basis to learn from for a national German space law, at least in certain areas.