Satellite and Space Projects Newsletter June 2025

While the details of the proposals have been kept under wraps, they are likely to include new requirements on EU-based space business and on non-EU businesses (not least from the US and UK) delivering space services into the EU. This territorial reach would reflect the principles in other recent EU digital services laws. One of the major objectives is to create a single market in space services across the EU – something which has been handled by each member state separately up to date. So we can expect the tide to move much more towards harmonisation across Europe. 

The new law is also likely to bring forward more definitive legal controls in the key areas of space sustainability, safety, resilience and security. This would be a substantial change from the recent international emphasis on voluntary codes of practice and similar measures. It would contrast with the approaches of the US and the UN Committee on the Peaceful Uses of Outer Space (COPUOS), alongside other stakeholders, who have been favouring codes of good practice and similar mechanisms to promote sustainable uses of outer space. 

For space business, it should lead to a greater degree of regulatory consistency across the European single market and reduce the potential fragmentation of legal approaches across member states. However, one major question is what type of law the Space Act will be – this is a point which will be important to business, not just of interest to lawyers. 

If the new law is framed as a directive, which sets the overall principles but leaves member states to implement it locally, there will be more wriggle room for member states to apply the law in their own way, which will tend to leave ripples in the legal landscape. We have seen this occur with some recent EU laws such as the latest cyber security directive, known as NIS2, leaving businesses having to follow different compliance registration processes across the EU territories. Alternatively, if it is a regulation, which applies directly once adopted by the EU institutions, the result should be a consistent framework across the EU, offering more certainty to space business. 

This Space Act will also raise some important questions for the space industry, such as:

• How far will it lead to a need for non-EU business to meet two (possibly conflicting) standards, one in their home territory and another in the EU destination territory? Where the US or UK, for example, favour a voluntary code of practice on sustainability for operators based there, but the EU requires a defined set of compliance standards on sustainability for market access, a US or UK space business will need to work carefully to assess how to satisfy both sets of laws.
   
• Will it be sufficiently technology-neutral to address the rapidly changing landscape of space business? As so many fields of space technology are likely to evolve significantly over the coming years, it will be important to ensure, so far as possible, that the law covers future developments in the sector effectively.
   
• Will it create a risk of incentivising space business to migrate away from the EU?  Undoubtedly the European Commission will have been working hard to achieve an effective balance in the Space Act between the need for a competitive European space industry, especially innovative space companies, and the desire to set the legal bar suitably high to preserve the benefits of space for present (and future) generations. However, some are concerned that by setting a higher standard of mandatory compliance requirements, the EU will encourage some businesses to choose a location outside the EU, possibly in a low-regulation jurisdiction, even if this means ignoring the European market.
   
• How will defence and security-focused space activities be treated under the new requirements? Building on the EU Space Strategy for Security and Defence issued in March 2023, the EU has been striving to establish a coordinated space defence policy, not least due to the Ukraine war. With Andrius Kubilius having stepped up as the first EU commissioner for defence and space, space defence/security suppliers will be keen to understand how far the new laws will foster the expected boom in European procurement of space defence services, including from non-EU suppliers. And given the latest UK- EU deal announced on 19 May, including the objective of developing a space-related security policy, how far will the UK be encouraged to align its own procurement of space defence activities with that of the EU?

This new law will set the tone in Europe, and probably beyond, for many years to come. So, when it emerges, the space industry will be looking closely to assess how it impacts on their strategic direction and business opportunities.

A version of this commentary was published in Space News on 5 June.