A question of fairness ESA finally has a commercial launch strategy, but will member states pay? Late this year, European governments will have the opportunity to pay up or shut up. Stephen Clark Mar 25, 2025 11:58 pm | 0 The entrance to the Guiana Space Center, Europe's primary spaceport in Kourou, French Guiana. Credit: Jody Amiet/AFP via Getty Images The entrance to the Guiana Space Center, Europe's primary spaceport in Kourou, French Guiana. Credit: Jody Amiet/AFP via Getty Images Story textSizeSmallStandardLargeWidth *StandardWideLinksStandardOrange* Subscribers only Learn moreThe European Space Agency is inviting proposals to inject competition into the European launch market, an important step toward fostering a dynamic multiplayer industry officials hope, one day, will mimic that of the United States.The near-term plan for the European Launcher Challenge is for ESA to select companies for service contracts to transport ESA and other European government payloads to orbit from 2026 through 2030. A second component of the challenge is for companies to perform at least one demonstration of an upgraded launch vehicle by 2028. The competition is open to any European company working in the launch business."What we expect is that these companies will make a step in improving and upgrading their capacity with respect to what theyre presently working," said Toni Tolker-Nielsen, ESA's acting director of space transportation."In terms of economics and physics, its better to have a bigger launcher than a smaller launcher in terms of price per kilogram to orbit.""The ultimate goal is we should be establishing privately-developed competitive launch services in Europe, which will allow us to procure launch services in open competition," Tolker-Nielsen said in an interview with Ars.From one to many?ESA and other European institutions currently have just one European provider, Arianespace, to award launch contracts for the continent's scientific, Earth observation, navigation, and military satellites. Arianespace operates the Ariane 6 and Vega C rockets. Vega C operations will soon be taken over by the Italian aerospace company Avio. Both rockets were developed with ESA funding.The launcher challenge is modeled on NASA's use of commercial contracting methods beginning nearly 20 years ago with the agency's commercial cargo program, which kickstarted the development of SpaceX's Dragon and Northrop Grumman's Cygnus resupply freighters for the International Space Station. NASA later applied the same model to commercial crew, and most recently for commercial lunar landers.Uncharacteristically for ESA, the agency is taking a hands-off approach for the launcher challenge. One of the few major requirements is that the winners should offer a "European launch service" that flies from European territory, which includes the French-run Guiana Space Center in South America. Europe's second Ariane 6 rocket lifted off March 6 with a French military spy satellite. Credit: European Space Agency "We are trying something different, where they are completely free to organize themselves," Tolker-Nielsen said. "We are not pushing anything. We are in a complete service-oriented model here. Thats the principal difference between the new approach and the old approach."ESA also isn't setting requirements on launcher performance, reusability, or the exact number of companies it will select in the challenge. But ESA would like to limit the number of challengers "to a minimum" to ensure the agency's support is meaningful, without spreading its funding too thin, Tolker-Nielsen said."For the ESA-developed launchers, which are Ariane 6 and Vega C, we own the launch system," Tolker-Nielsen said. "We finished the development, and the deliverables were the launch systems that we own at ESA, and we make it available to an operatorArianespace, and Avio soon for Vega Cto exploit."These ESA-led launcher projects were expensive. The development of Ariane 6 cost European governments more than $4 billion.Next stepsIt's taken a while to set up the European Launcher Challenge, which won preliminary approval from ESA's 23 member states at a ministerial-level meeting in 2023. ESA released an "invitation to tender" soliciting proposals from European launch companies Monday, with submissions due by May 5. This summer, ESA expects to select the top proposals and prepare a funding package for consideration by its member states at the next ministerial meeting in November.The top factors ESA will consider in this first phase of the challenge are each proposer's business plan, technical credibility, and financial credibility.In a statement, ESA said it has allotted up to 169 million euros ($182 million at today's exchange rates) per challenger. This is significant funding for Europe's crop of cash-hungry launch startups, each of which have raised no more than a few hundred million euros. But this allotment comes with a catch. ESA's leaders and the winners of the launch challenge must persuade their home governments to pay up.Let's take a moment to compare Europe's launch industry with the United States.There are multiple viable US commercial launch companies. In the United States, it's easier to attract venture capital, the government has been a more reliable proponent of commercial spaceflight, and billionaires are part of the launch landscape. SpaceX, led by Elon Musk, dominates the market. Jeff Bezos's space company, Blue Origin, and United Launch Alliance are also big players with heavy-lift rockets.Rocket Lab and Firefly Aerospace fly smaller privately-developed launchers. Northrop Grumman's medium-class launch division is currently in between rockets, although it still occasionally launches small US military satellites on Minotaur rockets derived from decommissioned ICBMs.Of course, it's not surprising the sum of US launch companies is higher than in Europe. According to the World Bank, the US economy is about 50 percent larger than that of the European Union. But six American companies with operational orbital rockets, compared to one in Europe today? That is woefully out of proportion.European officials would like to regain a leading position in the global commercial launch market. With SpaceX's dominance, that's a tall hill to climb. At the very least, European politicians don't want to rely on other countries for access to space. In the last three years, they've seen their access to Russian launchers dry up after Russia's invasion of Ukraine, and after signing a few launch contracts with SpaceX to bridge the gap before the first flight of Ariane 6, they now view the US government and Elon Musk as unreliable partners.Open your checkbook, pleaseESA's governance structure isn't favorable for taking quick action. On one hand, ESA member states approve the agency's budget in multiyear increments, giving its projects a sense of stability over time. However, it takes time to get new projects approved, and ESA's member states expect to receive benefitsjobs, investment, and infrastructurecommensurate with their spending on European space programs. This policy is known as geographical return, or geo-return.For example, France has placed a high strategic importance on fielding an independent European launch capability for more than 60 years. The administration of French President Charles de Gaulle made this determination during the Cold War, around the same time he decided France should have a nuclear deterrent fully independent of the United States and NATO.In order to match this policy, France has been more willing than other European nations to invest in launchers. This means the Ariane rocket family, developed and funded through ESA contracts, is largely a French enterprise.This model is becoming antiquated in the era of commercial spaceflight. Startups across Europe, primarily in France, Germany, the United Kingdom, and Spain, are developing small launchers designed to carry up to 1.5 metric tons of payload to low-Earth orbit. This is too small to directly compete with the Ariane 6 rocket, but eventually, these companies would like to develop larger launchers.Some European officials, including the former head of the French space agency, blamed geo-return as a reason the Ariane 6 rocket missed its price target.With the European Launcher Challenge, ESA will experiment with a new funding model for the first time. This new "fair contribution" approach will see ESA leadership put forward a plan to its member states at the next big ministerial conference in November. The space agency will ask the countries that benefit most from the winners of the launcher challenge to provide the bulk of the funding for the challengers' contracts.So, let's say Isar Aerospace, which is set to launch its first rocket as soon as this week, is one of the challenge winners. Isar is headquartered in Munich, and its current launch site is in Norway. In this case, expect ESA to ask the governments of Germany and Norway to contribute the most money to pay for Isar's contract.MaiaSpace, a French subsidiary of ArianeGroup, the parent company of Arianespace, is also a contender in the launcher challenge. MaiaSpace plans to launch from French Guiana. Therefore, if MaiaSpace gets a contract, France would be on the hook for the lion's share of the deal's funding.Tolker-Nielsen said he anticipates a "number" of the launch challengers will win the backing of their home countries in November, but "maybe not all.""So, first there is this criteria that they have to be eligible, and then they have to be funded as well," he said. "We dont want to propose funding for companies that we dont see as credible."Assuming the challengers' contracts get funded, ESA will then work with the European Commission to assign specific satellites to launch on the new commercial rockets."The way I look at this is we are not going to choose winners," Tolker-Nielsen said. "The challenge is not the competition we are doing right now. It is to deliver on the contract. Thats the challenge."Stephen ClarkSpace ReporterStephen ClarkSpace Reporter Stephen Clark is a space reporter at Ars Technica, covering private space companies and the worlds space agencies. Stephen writes about the nexus of technology, science, policy, and business on and off the planet. 0 Comments