Germany wakes up to the call of space

World's fourth-largest economy had the world's seventh-largest national space budget in 2018 but plans are afoot to boost industry at home

An Ariane 5 rocket takes off in Kourou, French Guiana. . EPA

Facing tough competition from China, the US and even tiny Luxembourg, Germany is racing to draft 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 US companies stake out ground in an evolving segment that promises contracts for everything from exploration to mining of outer-space resources.

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

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 said.

The ministry's aerospace and space commissioner, Thomas Jarzombek, could submit the laws to parliament later this year, according to Reuters. The move comes as companies and trade groups press for German authorities to establish a regulatory framework for the lucrative 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," said Dirk Hoke, defence and space chief at Franco-German-led aerospace group Airbus. "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 the world's seventh-largest national space budget in 2018, an estimated $1.1 billion, only over half the amount generated by fifth-placed France, according to preliminary data from Paris research company Euroconsult.

The figure, which excludes contributions to pan-European programmes, is dwarfed by the US – by far the largest spender on space at almost $40bn.

Ironically, American space ambitions could offer a lifeline.

Mr Hoke said a new lunar Gateway programme backed by US 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 programme, which also involves US aerospace giant Lockheed Martin, 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 (Dh409.8m) 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, chief executive of German Orbital Systems, a Berlin 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.

But Germany is not standing still.

Mr Jarzombek is working with trade groups, companies and other experts to draft the space laws, and plans to submit it them parliament some time after September.

"We are aiming for a lean basic law that is open to the future," said a spokeswoman for Mr Jarzombek and the economy ministry. "A national space law should focus above all on incentives and make it possible for the German space industry to play a bigger role in global developments."

Berlin is also pressing the United Nations to set standards for mining of the Moon, asteroids and other objects in space.

The US passed a law in 2015 that encouraged private companies to undertake mining work beyond Earth, and gives its companies the right to claim resources they may one day be able to extract from celestial bodies.

Mr Jarzombek helped to secure a €269m increase in planned funding for the European Space Agency (ESA) in 2020-23. But Germany's total space funding, which includes ESA and national programmes, is not expected to rise in that period. It edged slightly lower to €1.57bn in 2019.

The 18-member ESA oversees cooperation on space exploration and launches, but individual countries have their own research and interests, funded outside the ESA budget.

Matthias Wachter, aerospace expert at the BDI German Federation of Industry, said advances in space were crucial for future technologies such as autonomous driving.

"Germany is limping behind," he said.

Any spending plans would have to contend with rising budget pressures and an economic slowdown. Germany is in its 10th year of expansion, but only narrowly avoided recession last year.

Senior executives from Deutsche Bank and Munich Re and others met in Berlin this month to brainstorm ways to fund and insure new space projects.

One problem is Germany's conservative approach to investment and financing as entrepreneurs seek capital, said Sebastian Straube, chief executive of investment company Interstellar Ventures.

Mr Straube is building a €100m investment fund that will fund projects. He is also working with companies like rail operator Deutsche Bahn to encourage them to support new ventures that build applications taking advantage of increased access to space through satellites in low-earth orbit.

Marco Fuchs, chief executive of satellite builder OHB, said Germany needed bigger increases in national space funding to pay for pioneering developments, citing growing competition worldwide.

The company carried out a privately funded commercial mission with China to orbit the moon in 2014, and teamed up this year with Israel Aerospace Industries to offer the commercial delivery of payloads to the lunar surface for ESA.

OHB is a key player in the battle between Europe's new Ariane 6 rocket and the Falcon 9 built by Elon Musk's SpaceX to launch the first of two new OHB spy satellites, called Georg, for Germany's foreign intelligence agency in 2022.

SpaceX is also developing a spacecraft for manned missions. Crew Dragon is designed to transport up to four astronauts for Nasa missions, along with critical cargo and supplies, to the International Space Station as part of Nasa's Commercial Crew Programme.

The contract, worth tens of millions of dollars, is drawing political attention after SpaceX and Ariane traded barbs about access to each other's markets, which could presage a transatlantic trade dispute in coming years.

OHB and the German government are expected to select the winner by late 2020, and Mr Fuchs said the decision would be based on many factors, including launch dates and available budgets. Blue Origin, another major US private space company, founded by Amazon.com chief executive Jeff Bezos, may be preparing to deliver some news next month, according to Bloomberg. It has scheduled an event for May 9 and posted a cryptic tweet on Friday with that date and a photo of what appears to be the schooner Endurance, which explorer Ernest Shackleton was forced to abandon in Antarctica in 1915.

There is an impact crater named Shackleton at the south pole of the moon, although there was no indication the tweet referred to the moon. Blue Origin didn't immediately reply to a request for comment. The company, based in Kent, Washington, has been performing test flights and landings of its New Shepard rocket in West Texas.