Fly me to the moon: Germany eyes slice of lucrative space market

Facing tough competition from China, the United States and even tiny Luxembourg, Germany is racing to draft new laws and attract private investment to secure a slice of an emerging space market that could be worth $1 trillion a year by the 2040s.

The drive to give Germany a bigger role in space comes as European, Asian and U.S. companies stake out ground in an evolving segment that promises contracts for everything from exploration to mining of outer-space resources.

Firms likely to benefit from any future spending rise in Germany include Airbus, which co-owns the maker of Europe’s Ariane space rockets, and Bremen-based OHB.

The new legislation would limit financial and legal liabilities of private companies should accidents happen in orbit, set standards for space operations and offer incentives for new projects, the German economy ministry told Reuters.

The ministry’s aerospace and space commissioner, Thomas Jarzombek, could submit the laws to parliament later this year. The move comes as companies and trade groups press for German authorities to establish a regulatory framework for the lucrative new market to encourage private investment.

“We are sounding the alarm that Germany and Europe are falling behind in space vis-a-vis China and the United States,” Dirk Hoke, defense and space chief at Franco-German-led aerospace group Airbus, told Reuters. “We’re at a critical juncture to ensure we stay in the top league.”

Germany is Europe’s economic powerhouse and the world’s fourth-largest economy. However it had just the world’s seventh-largest national space budget in 2018, an estimated $1.1 billion, just over half the amount generated by fifth-placed France, according to preliminary data from Paris-based research firm Euroconsult.

The figure, which excludes contributions to pan-European programs, is dwarfed by the United States - by far the largest spender on space at almost $40 billion.

Ironically, American space ambitions could offer a lifeline.

Hoke said a new lunar Gateway program backed by U.S. space agency NASA offered a chance for Germany and others in Europe to stake a claim to a key role in the market.

“In my view, it is hugely important that we participate as equal partners so that we are primed to develop and build technologies for such a gateway,” he said.

The program involves designing and developing a small spaceship that will orbit the Moon and serve as a temporary home for astronauts and as a base for work on the moon’s surface and, later, missions to Mars. NASA had aimed to finish the Gateway by 2026, but Washington is now aiming to put humans back on the Moon by 2024, which could lead to an accelerated schedule.

Even before then, Germany is facing a brain-drain as companies worldwide ponder how to extract minerals from asteroids and water from the moon within a decade.

Some companies are already considering moving to Luxembourg, which has taken a lead in Europe by enacting laws to limit liabilities and ease restrictions on mining operations. It has also set up a 100-million-euro ($112 million)investment fund for projects.

“It’s a global market. We have our customers and we will keep them, even if we have to run the company from somewhere else,” said Walter Ballheimer, CEO of German Orbital Systems, a Berlin-based start-up that builds small satellites.

“Germany was overtaken a long time ago,” he said. “But it’s not too late. If they are courageous enough and adopt a clear space policy ... then we can still have a piece of the cake that we should have as a leading export nation.”

Two other heads of small German space companies told Reuters they were considering leaving the country.