The EU Space Act: Internal Harmonisation and External Influence

On 25 June 2025, the European Commission unveiled its long-anticipated proposal for an EU Space Act. This draft Regulation arrives after years of preparatory work, discussions, and multiple delays. Its objective is to address growing legal and practical fragmentation across national space frameworks at a time when commercial activity in orbit is increasing exponentially. Space is no longer a domain reserved to large public actors and military agencies; it is becoming a competitive commercial environment driven by NewSpace companies. In this setting, diverging national licensing regimes and safety obligations within the European Union (EU) were seen as an impediment to the smooth functioning of the internal market, preventing European industry and actors from achieving the scale and predictability they need.

That is the core rationale behind the proposal. This fragmentation was evidently the very impetus that drove the Commission. The proposal reflects a broader political strategy, whereby Europe cannot afford fragmentation or over-reliance on third countries when its civil and military infrastructures increasingly depend on space (see, for example, the Draghi report). This is also emphasised in the ‘Vision for the European Space Economy’, which was published together with the proposal. A coherent European industrial policy requires that operators are able to scale across the single market under a common ‘rulebook’.

Upon this background, this blog post examines how the EU Space Act, in addition to being a regulatory and policy consolidator across the diverse legal landscapes of the Member States (MSs), can also exert an influence beyond the EU’s borders, shaping global regulatory expectations through indirect policy influence and market gravity.

Legal Basis and Competence Issues (Again)

The legal basis chosen by the Commission is telling. Rather than relying on Article 189 of the Treaty on the Functioning of the EU (TFEU), which governs the Union’s space policy but expressly excludes harmonisation of national laws, it opted for Article 114 TFEU. This move was anticipated (including on this blog – see here and here): the harmonisation prohibition under Article 189(2) left few other options. Conversely, Article 114 TFEU enables harmonisation where national rules obstruct the functioning of the internal market. Divergences in authorisation requirements, the need for uniform or approximate debris mitigation obligations, and various cybersecurity protocols across MSs could easily be framed as such obstacles. By choosing the Regulation pathway, the Commission further aims to establish direct applicability, delivering uniformity across the EU.

Even so, there are unresolved questions about the legal coherence of such an approach, such as whether Article 189 TFEU can be circumvented entirely. Another looming issue is that the use of internal market competences to regulate commercial space risks stretching the scope of Article 114 too far into a policy area that is only partially commercial. Harmonisation of safety or sustainability requirements, for example, look very similar to the sort of action that Article 189 might have permitted if not for its harmonisation restriction. This tension may well provoke future legal challenges and may ultimately require the CJEU to draw the line.

Moreover, it is emerging shortly after the Directive 2022/2555 (NIS2) and the Critical Entities Resilience (CER) Directive enter into force, bringing new obligations for operators of critical infrastructure. The proposal puts emphasis on the Regulation filling a legal gap vis-à-vis these instruments, designating it as lex specialis (Article 75). However, without careful coordination and despite this declaration of complementarity in the proposal, overlapping compliance obligations could introduce administrative burdens just when the sector hoped for legal predictability.

What the Act Actually Provides

The EU Space Act proposal is extensive. Its operational provisions span seven Titles. Title I defines the scope, applying to all operators providing space-based data and services in the EU (including third-country entities operating in the EU) and asserts free movement of data and services across the Union with carve‑outs for national security. Title II sets up a licensing and registration regime under which EU-based operators must obtain authorisation from their national competent authority (notified to EU Agency for the Space Programme (EUSPA)), and third-country operators must register directly with EUSPA after demonstrating compliance and designating an EU representative, with simplified licensing for satellite constellations; Union-owned assets are authorised by the Commission under EUSPA supervision. Title III establishes a governance structure that requires MSs to designate a competent authority with supervisory, investigatory and sanctioning powers. It also allows the MS to appoint accredited technical bodies to check compliance, while EUSPA takes on new roles for registration, certification, incident monitoring, and dispute resolution. Title IV contains detailed technical obligations on launch and re-entry safety, debris mitigation, collision-avoidance, pollution control, cybersecurity and resilience under NIS2 and CER, as well as sustainability requirements (including life-cycle assessments and Environmental Footprint Declarations) along with provisions for in-orbit servicing and orbital traffic management. Finally, Titles V and VI cover international cooperation and support, empowering the Commission to recognize equivalent third-country regimes and conclude international agreements under Article 218 TFEU, and introducing capacity-building measures, guidance materials, and a ‘Union Space Label’ to highlight operators exceeding the baseline requirements.

Impact on Existing National Frameworks and Operators

Despite its breadth, the Regulation deliberately leaves untouched areas that the Treaties reserve to national competence or where Union action might provoke political sensitivities. Military and dual-use operations, national security, and other State functions remain an MS preserve. Intellectual property rights, spectrum allocation, and industrial policy similarly remain national or international matters. Even sustainability obligations allow room for stricter national measures under Article 114(4) TFEU.

Harmonisation will nonetheless require extensive adjustments across the EU. Thirteen MSs have enacted national space laws to date. National lawmakers and industry alike invested substantial capital in these frameworks, often under the impression that domestic authority would prevail. The advent of an overarching Regulation, especially one introduced without a long preparatory transition, may feel both abrupt and destabilising. As the future EU Regulation takes hold, incompatible or substandard national rules will have to be scrapped or changed. This could provoke resistance, as some actors may perceive the Regulation as too complex or too disruptive just as national regimes are bedding in. In Luxembourg, for example, the 2020 Law on Space Activities has no requirements pertaining to environmental impact or sustainability. The Regulation would change that entirely. Italy’s new law, with its sustainability-focused requirements, is mostly in sync with the proposal. Germany, which has yet to pass a dedicated space law, may use the Regulation as a blueprint for its future domestic framework. Then there is the question of MSs having to adjust to this regulatory jolt with limited expertise or infrastructure on space law and policy.

This means more stringent licensing requirements for space companies such as those in Luxembourg. Authorization, manufacturing, and operational costs will go up – the Commission estimates that this is about 300 million Euros for start-ups, and around 1,5 million Euros for larger operators as they scramble to adapt to newer authorisation requirements (Proposal, pg. 7). This might receive backlash from space companies, some of which may have chosen specific European countries for their present legal and policy framework perceived to be stable and predictable.

The ‘Brussels Effect’ in Space?

Despite all these reservations, a unified legal (and political) baseline addresses long-standing inefficiencies in Europe’s space sector, which are also pervasive issues globally. European unity and autonomy are crucial for the continent to emerge as a true contender in outer space activities. Baseline obligations reduce the risk of a regulatory race to the bottom, ensuring that companies cannot shop for the most permissive jurisdiction within the EU at the expense of safety or sustainability.

More strategically, by extending its obligations to third-country operators active in the Union, the Regulation asserts Europe’s normative power in a domain historically governed by soft law and bears the potential to capture outer space activities within the so-called ‘Brussels Effect’. The framework proposed can thus foster the adoption of safety and resilience requirements across all actors that access the internal market. Beyond third-country operators within the EU, this effort could also encourage international harmonisation. Much like the General Data Protection Regulation (GDPR) reshaped expectations of data privacy through the gravitational pull of the EU market beyond its borders, the EU Space Act could serve as a concrete example of how regulatory ambition can catalyse broader international change. Fora such as the UN Committee on the Peaceful Uses of Outer Space (COPUOS) have spent years recognising the urgency of issues such as space traffic management and environmental sustainability. Despite important sets of principles such as the UN Long-Term Sustainability Guidelines, the focus is often on soft law outputs rather than binding regulatory frameworks. By setting enforceable rules with real market consequences, the EU is positioning itself to fill this normative and policy vacuum. Even if other major jurisdictions, such as the United States or China, pursue their own regulatory philosophies, the EU’s approach may still shape global standards indirectly, especially for operators that cannot afford to forgo access to Europe’s market. In this sense, the Regulation does not merely harmonise national frameworks within the EU; it potentially offers the first robust, regional regulatory template for sustainable commercial space activities worldwide.

Conclusion

The EU Space Act proposal asserts that the EU’s fragmented national frameworks cannot endure in an increasingly commercial and congested orbital environment. Its success will ultimately depend on political commitment and institutional capacity. Yet, there is a strong rationale for moving forward. Baseline obligations and common procedures on safety, sustainability, and resilience may help establish a level playing field for European operators and promote investment and innovation across the EU. They also align with Europe’s broader strategic ambitions, ensuring that as commercial space grows, it remains safe and sustainable. In this light, the EU Space Act is a significant, pragmatic, coordinated legal framework that lays a foundation for deeper integration – one that future legislators and policymakers can build on as Europe’s space sector continues to evolve.