Satellite Earth Observation (EO) is increasingly recognized as a strategic instrument for meeting Europe’s defense needs and for ensuring the green and digital transitions. From monitoring droughts and forest fires to supporting critical infrastructure and the insurance sector, satellite data has moved beyond a niche technical product to become a true enabler of public policy, business and societal resilience – contributing to the Sustainable Development Goals and Environmental, Societal and Governance (ESG) targets.
Several technological advances underpin this evolution: the miniaturization of satellites, advances in high-resolution and hyperspectral imaging, integration of cutting-edge technologies (such as AI and quantum) and the transformation of launchers, with greater payload capacity and reusable systems. Added to this are innovative data‑processing technologies (driven by cloud computing and also AI), as well as the diversification of data sources, which make it possible to transform raw data into customized information. Still, challenges remain, including standardization and interoperability, discoverability and accessibility.
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In this scope, value‑added services play an increasingly central role, responding to the demand for “tailor‑made” solutions. New business models are also becoming more common, such as data-as-a-service (DaaS). Again, challenges remain, including cost and economic barriers, as well as dispersion of data sources. Moreover, despite Europe’s strong EO market, the downstream sector remains highly concentrated among a few private actors.
Still, the EO market, both worldwide and in the EU, is predicted to grow steadily over the coming decade. It is estimated that global revenues from satellite data and services will reach around 6 billion euros ($7 billion) by 2033, with the EU accounting for almost 1 billion euros ($1.16 billion) of that market. In addition, over the next decade, global launches of EO satellites are expected to almost triple, in line with rising demand across all market segments.
The largest market for EO data remains defense and security, which is expected to reach more than 3 billion euros ($3.5 billion) 2035. In civil markets, key segments include climate, environment and biodiversity; land management, infrastructure and urban development; as well as agriculture and forestry, with the financial and insurance sector gaining increasing prominence.
In parallel, the importance of satellite data is ever more recognized at policy level: a growing number of EU policies and laws acknowledge satellite data as a relevant tool for meeting legal obligations and pursuing objectives of public interest (e.g., climate, agriculture, forestry, energy and critical raw materials, civil protection and disaster management, among others). Yet, different sectors demonstrate varied levels of uptake and integration of EO data in their policy and legal frameworks. And, even when the legislation acknowledges the role of EO data, it does not mandate its use. What is more, EU policy and legislation often emphasize public initiatives, such as the use of Copernicus, a point that merits careful consideration to maintain technology neutrality and encourage not only the use of a diverse range of EO data sources, but also a diverse competitive market.
Portugal, which for many years was mainly a user of space data, has been carving out a place in this market, particularly through the New Space Portugal Agenda, a consortium of more than 40 entities whose main objective is to develop and launch EO satellites.
One component of this agenda focuses on research studies that map opportunities and challenges along the entire value chain (from upstream satellites to downstream data, products and services). Their goal is to help organizations strengthen their market position and increase the use of data and value‑added services. The research studies address the economic, technical, social, policy, and legal dimensions of the EO sector, thus adopting an all-encompassing and synergetic approach that allows a broader view of the opportunities, obstacles and paths for EO development. Part of the studies is publicly available online.
A distinctive feature of this work is the central role of legal and regulatory analysis: instead of treating law as an obstacle, law is viewed as an essential building block for sustainable business models. This approach recognizes that legal certainty is as critical as technological performance.
Therefore, it is necessary to anticipate and manage legal risks. For instance, the use of satellite data for both civil and military purposes (dual use) raises challenges in armed‑conflict scenarios and the possibility of satellites being considered legitimate targets. It also brings stricter export‑control requirements. Increasing data resolution may enable the identification of individuals, triggering the application of demanding personal data rules. The use of artificial intelligence in data processing can affect the possibility of protecting data through intellectual property rights, with implications for commercial exploitation. The sale of data may also be subject to mandatory contractual requirements.
On top of this, several recent trends are emerging. The most significant is the EU’s new proposal for a space law, which will introduce demanding rules on safety, resilience and sustainability. This proposal has been heavily criticized for its impact on businesses, raising compliance costs. According to a recent study, these costs could translate into a loss for European companies of around 245 million euros ($285 million) in annual revenues and 100 million euros ($116 million) in profit. Another new development is the “Digital Omnibus” package, which will amend EU data and artificial intelligence laws, among others.
Beyond legal compliance, a responsible approach to EO – akin to Responsible AI – will be crucial to consolidating the private sector and the wider ecosystem, mitigating risks and strengthening the reputation of stakeholders. Principles such as data quality, transparency and trust, interoperability, privacy and respect for human rights, social well‑being, security, resilience, sustainability, responsible innovation, and sound governance practices will help make the sector more robust and better able to respond to future challenges.
By combining technical excellence with strong legal design and a forward‑looking approach to regulation and ethics, the European and global EO market will be better equipped to meet the world’s growing challenges. VS
