European Union flags outside of the EU headquarters Berlaymont building in Brussels, Belgium. Photo: Kyle Wagaman via Flickr, Creative Commons license

As a ground-breaking initiative, the new EU Space Act aims to create a new framework for space safety, sustainability and resilience, and promote investment in the sector. The result will be a whole new regime for space in Europe.

Against this background, Fieldfisher’s space law team highlights some of the most important implications for space businesses in the EU, and non-EU businesses trading with the EU in the coming years.

How will space services be authorized? EU space services providers will need authorization from national authorities, aiming to create a single European market in space. 13 member states already have legislation regulating space activities. It will be interesting to see how the Commission’s ambition of “one market, one rulebook” plays out in practice, as the Act allows Member States to impose their own stricter requirements where “objectively necessary.”

How will non-EU space services be covered? Third country operators, such as those from the U.K., U.S. and Asia, wishing to deliver services in the EU will need to secure registration via the Commission. Thus, non-EU satellite operators will be assessing how this impacts their future business strategy.

Significantly, the Act restricts EU-based space operators from engaging with third country launch operators unless they are registered with the Commission, or the third country has an equivalent regime, or there is a specific derogation. In the current launch market, this would require U.S. launch providers to become approved for EU launches. As the European launch capability matures, the Commission presumably anticipates that there will be less need to rely on U.S. launch in future.

How far will the EU recognize non-EU operators’ authorizations? In addition to requiring registration of third country operators, the Commission may issue equivalence certificates where it finds that a third country regulatory regime is at least as protective. This echoes the approach used in other cases, such as GDPR adequacy opinions, which aims to encourage other states to align their laws with the EU standards.

How will non-EU space businesses manage their potentially dual track compliance requirements? For cross border space businesses (which will be most companies), there will almost inevitably be a doubling up of compliance obligations, both in their home state for the primary licenses and in the target markets for market access, unless an equivalence certificate is in force. For U.S. players, this will present challenges especially in areas such as sustainability, where the U.S. authorities have applied a set of voluntary mechanisms.

How are the sustainability requirements set? Operators will need to calculate their environmental footprint and comply with new requirements for trackability, collision avoidance, maneuverability, orbital traffic rules, orbit selection and debris mitigation. Where these issues have been addressed to date, it has typically been through guidelines and codes of practice. So adapting to mandatory rules will present a new challenge for operators.

What cyber security requirements will apply? The EU policy is to align all space service providers with existing EU cyber security laws (NIS2) which industry has been grappling with over recent months. Under NIS2, some states have recognized the main establishment of an operator for registration purposes, while others have not, leading to some confusion for business.

What are the penalties for non-compliance? In cases of breach, the Commission can levy fines of up to twice the level of the profit resulting from the breach, twice the losses avoided or 2% of global turnover. So there could be significant penalties for the most severe cases.

Will the new law help investment in EU space companies? The Act underpins the EU’s ambition of showcasing European space businesses as attractive for private investment. By removing current fragmentation across the EU market and providing greater legal clarity, it aims to create a more predictable environment for investors to navigate.

What will businesses need to do and by when? There will be a period (possibly a couple of years) for lobbying and consultation before the Act is finally passed. The Act will apply from January 1, 2030, aside from certain new requirements being deferred for SMEs.

However, there will be a lot to do for companies to be ready. Given the breadth of the new laws, industry will need to look at the top priority impacts on issues such as regulatory licensing, compliance requirements, contractual approaches, supply chains and risk management to assess how to plan for the adjustments needed over the coming years.

John Worthy is a partner at Fieldfisher and head of Satellite and Space Projects. Natasha Scanes is director of Fieldfisher, Satellite and Space Projects. International law firm Fieldfisher offers a market leading space practice, built on over 30 years’ top-flight experience across the space sector in the UK, Europe and round the world.