Overview
The abrupt pause in US intelligence-sharing with Ukraine, accompanied by perceived threats to cut off Starlink’s satellite-based connectivity services to its military, sparked European worries around the US’ willingness to weaponize its space-based infrastructure and coerce allies into diplomatic alignment.
Europe increasingly finds itself between a rock and hard place with the US and China’s space technology dominance. Calls for an autonomous European space capability have grown, but this will require substantial public investment. If the Europeans fail to close the gap, they risk entrenching dependence on private US-made satellite and launch systems—undermining its push for strategic autonomy amid transatlantic nonalignment. If Europe embraces public steering of its space market, the world risks a multipolar space race engaged in strategic competition, unless leaders find a way to maintain familiar forms of international space governance and space market exchanges.
Can Europe Act Without the US?
Europe is scrambling to find alternatives to Starlink if its satellites go dark in Ukraine, but the alternatives are not up to par. Starlink’s mega-constellation of 7,000 satellites at low-earth orbit provides constant access from signals on the ground, while leading European contenders like Eutelsat’s OneWeb operate only 630 satellites at low-earth orbit, providing slightly slower service. A larger problem is that Ukraine has accumulated 40,000 ground-based terminals to operate Starlink services, while OneWeb would need monetary and logistical assistance to disperse its third-party terminals across the country, which could take months. Their terminals are less secure to cyberattacks and less portable—another reason why the Ukrainians prefer Starlink’s quality. European satellites are better than nothing, but certainly a downgrade.
The fear of Starlink dependency exposes Europe’s deeper strategic vulnerability in the modern space race. The US and China together comprise 70% of the global spacecraft market and 70% of the global launching market, with Starlink alone accounting for 95% of the launch market’s growth in 2023. The company has reached an economy of scale that remains unrivaled, responsible for 60% of all human-made satellites in orbit and an industry transition to low-mass small satellites, which accounted for 96% of all spacecraft launches in 2022. Simply put, the US is in a strong position to reap the returns of space commercialization, a sector predicted to triple in size by 2030. Europe is already lagging: while the global space sector grew 7.3% in 2023, Europe’s only grew about 2.4%.
However, given the sector’s significant growth potential, it’s far too early to count the Europeans out. The European Space Agency, which coordinates national space agencies in common projects, manages world-class systems that rival those of the US. Galileo gives more accurate timing and positioning information than GPS, and Copernicus is the preferred earth observation system globally.
While Europe has maintained parity in these “public good” systems, the question remains whether this edge can spill over to the private sector. To do so, Europe will have to overcome its aversion of market oligopolies and actively steer its space market to compete with global champions.
Europe’s Fragmented Space Sector Mirrors Defense Underinvestment
Much like its defense market, Europe’s space sector does not possess comparable champions to the US or China that can competitively withstand capital-intensive projects with long horizons. While the US has SpaceX and China has China Satellite Network Group, most European firms are constrained to working with their respective national space agencies, leading to an inefficient duplication of efforts and a lack of scalability. As such, the productivity of Europe’s largest four aerospace companies, which are not dedicated exclusively to space, is about a fourth of SpaceX.
This is not only due to a lack of European coordination but a lack of public spending, which mitigates most private risk in the industry. European member states and the European Space Agency spent a total of $13 billion in 2023, far from the US’ $73 billion and slightly behind China’s $14 billion, which goes further due to purchasing power. Europe’s space investments also abide by a “geographic returns” principle, whereby the distribution of industrial contracts must correspond to member state contributions to the European Space Agency, rather than competitive bids. This reinforces fragmentation in Europe’s space market and inefficient public spending. Moreover, Europe neglects to pool its buying power, which is vital for steering risky industries. For example, Europe comprised a total of 1% of global launch demand in 2023, sometimes contracting non-European companies like SpaceX for these launches.
Fragmentation requires the negotiation of inter-corporate consortia for transcontinental space ventures, but these often get bogged down in negotiations on workshare, IP, ownership, and inefficiencies. Europe’s current transcontinental public-private partnership, IRIS2, demonstrates this point. IRIS2intends to launch 264 satellites in low-earth orbit and 18 in medium orbit to secure communications between EU government institutions and militaries by 2030, but two aerospace contributors to the consortium withdrew due to contract disputes, timeline extensions, and cost overruns. If a consortium struggles with a system of this scale, it will be unable to field a mega-constellation competitive to Starlink.
Europeans are increasingly convinced that working beyond the national and intergovernmental level will be necessary to take on the final frontier. Europe’s big four aerospace companies are exploring a joint venture called “Project Bromo,” pooling their space capabilities together to form a dedicated European space champion, a model similar to the jointly owned MBDA missile company, that can compete with first movers like SpaceX. This reflects the necessity of scale, but Europe must do more to cultivate its success. For one thing, the EU will need to relax its merger enforcement rules to allow the joint venture to go through—something that Competitiveness Commissioner Teresa Ribera has hinted at approving.
Mario Draghi’s recent competitiveness report recommends greater coordination of public spending, dropping “geographic returns” rules, codifying a “buy European preference” to protect launch capacity from SpaceX, and creating a centralized EU Space Fund that acts as an “anchor customer” to procure European space services. Defense Commissioner Andrius Kubilius’ forthcoming defense white paper may push new defense funds to support space capabilities, thereby restoring a heavy public spending ratio to stimulate European space competitiveness.
The Risks
If Europe fails to re-invest in its space sector, it will likely lean upon the US to fulfill its connectivity and space launch contracts. Without an autonomous space launch capability, European security forces would become vulnerable to American privately-owned satellite infrastructure. This may go unnoticed in times of geopolitical alignment, but the Europeans no longer see the transatlantic alliance as infallible. Therefore, Europe will likely try to protect a separate space capability in some form.
Europe may build space investments into its €800 billion ReArm Europe plan, especially given the popular economic benefits of dual use space technology and the high growth potential of the commercial space sector, which could balance public investment over time. Europe could also implement a “buy European” preference in space technology, which may carry downside risks for American commercial space companies for future contracts. The concern generated from Starlink’s potential withdrawal from Ukraine has already put a $1.6 billion explored deal with the Italian government on the rocks, which other Europeans have criticized on the principle of procuring European equipment to protect an autonomous industrial base.
If the EU does develop an independent space capability, an upside political risk would be a stronger partner in global space governance. The US and EU would be like-minded on several issues, including in common solutions on managing space traffic, mitigating the danger of space debris, creating rules on commercial space exploration, and protecting norms on the non-militarization of space. Chinese and Russian experimentation with anti-satellite weapons will be a common concern to both.
However, if the US and EU fail to coordinate their space capabilities and engage as separate poles in a global space race, the final frontier risks de-commoning at the expense of international scientific cooperation. New security dilemmas and military demand will drive the pace of innovation, sapping public funds to maintain a balance of power.
