A new space race is well under way. The Artemis II, a mission that will take astronauts farther from our planet than any human being has ever been is intended to renew the US’s outer space ambitions. The programme aims to achieve lunar landing in 2028. At the same time, efforts to build data centres in orbit are intensifying. The proposed merger between Elon Musk’s SpaceX and Artificial Intelligence start up xAI has the declared goal to create space-based data centres, which, unlike their terrestrial counterparts, could continuously draw on solar power and potentially reduce the long-term costs associated with AI processing.
While the US is ramping up its space activities on multiple fronts, China is far from idle. In February, the China Manned Spaceflight Agency (CMSA) successfully completed tests of its Long March-10 rocket and of the Mengzhou capsule, two cutting-edge devices through which China aspires to outpace the US in the new moon race. The 2025 agreement between China and Russia to develop a nuclear power station on the moon by 2035 adds another dimension to the challenge facing the US.
These developments, alongside Russia’s invasion of Ukraine in 2022, which brought attention to the necessity of protecting critical infrastructures from outer space, are ringing alarm bells in Europe, where concerns are growing that the continent’s space sovereignty is being eroded by more powerful rivals.
The proposal for the EU Space Act should be assessed against this backdrop. Unveiled on 25 June 2025 by the European Commission, the proposal seeks to establish a common legal framework across EU countries. By introducing a set of rules centred on the pillars of safety, resilience and sustainability, it aims to increase the competitiveness of the European space industry in challenging times.
The proposal includes measures on space debris mitigation and collision-avoidance services, of paramount importance to ensuring Europe’s access to space, as well as enhanced cybersecurity obligations designed to support business continuity. The new regulations, which are expected to be applied to both EU and non-EU operators providing space services in Europe, also aim to relieve companies, especially SMEs, of administrative duties, giving a further boost to innovation.
In an attempt to overcome the constraints imposed by Article 189 of the Treaty on the Functioning of the European Union (TFEU) of 2009, which deliberately introduced explicit yet limited EU competence in the field of space, the EU Space Act proposal relies on Article 114 TFEU as its legal basis, invoking the need to ensure the proper functioning of the internal market. This approach is intended to justify and facilitate the adoption of harmonised rules governing space services and space-derived data, with a view to preventing divergent national regimes from creating undue complexity for operators, particularly in cross-border contexts.
Ambitious as it may be, the EU Space Act raises several significant legal questions. Effective coordination with the European Space Agency (ESA), and with existing national regulatory frameworks, will be essential to avoiding overlaps and jurisdictional friction. Moreover, reliance on Article 114 TFEU does not entirely resolve the underlying constitutional tension created by Article 189 TFEU. The substantial compliance burdens imposed on operators may also hamper a sector that has begun to show signs of dynamism in recent years.
The rapid emergence of national space legislation across Europe adds a further layer of complexity. Several member states have recently adopted or updated dedicated space laws – notably Italy’s Law No. 89 of 13 June 2025 – establishing for the first time a comprehensive national framework governing space activities, authorisation regimes and liability rules. While these initiatives serve legitimate national objectives, they also carry an inherent risk of regulatory fragmentation, if not properly coordinated. Divergent authorisation regimes or operational requirements may undermine legal predictability and increase compliance costs, particularly for operators active across multiple jurisdictions.
Ensuring coherence between national frameworks and any future EU-level regime will therefore be crucial to preserving the integrity of the single market and unlocking the full potential of space activities, a key requirement to safeguard Europe’s strategic autonomy.
Despite these challenges, the proposal for the EU Space Act could not have arrived at a better time, complementing the initiatives the European private sector is taking to address structural weaknesses in the regulatory environment.
Among several examples, the recently announced project involving Airbus, Leonardo and Thales stands out. At the end of last year, the companies, three of the largest aerospace players in Europe, signed a memorandum of understanding for a joint venture that will take many of their space activities, including satellites services, under one roof. The new entity will supposedly bring together about 25,000 employees across Europe, consolidating the region’s industrial and technological capabilities to create a truly pan-European champion capable of rivalling global giants from the US and China.
From this perspective, the EU Space Act represents a powerful and potentially decisive instrument for turning Europe’s legitimate ambition to emerge as a protagonist in the 21st-century space race into a reality.
By moving beyond national silos and creating a coherent and credible regulatory framework, Europe, which has been a pioneer in space exploration and remains home to some of the most advanced industrial organisations worldwide, can set the stage for authentic and lasting competitiveness.
Marco Galli is senior counsel at PedersoliGattai, Milan
No comments yet