Fail or succeed, SpaceX is a warning to Europe

On April 20, a prototype orbital rocket, Starship, built and operated by Elon Musk’s SpaceX, reached an altitude of 39 kilometers before exploding. While some in Brussels, Paris or Beijing may have taken some satisfaction from the frustrated test launch and the delays it will cause, the setback has only given competitors limited time to catch up. SpaceX’s next two test vehicles are ready, and modifications to the company’s ground infrastructure are underway. Europe cannot afford to sit idly by while SpaceX continues to innovate and improve.

If the Starship becomes operational, it will be one of the largest orbital rockets ever built, capable of launching its payloads into orbit for a fraction of current costs. It is designed to be fully reusable, a feat that has so far eluded every other rocket design, including the now-retired Space Shuttle. The project is the subject of division, with its design, economic feasibility and environmental impact criticized by some observers. The US Federal Aviation Administration suspended the Starship’s launch license after the April 20 explosion, pending a safety and environmental control review that could last months.

However, the European industry and policy makers should start planning for a new era in space. The main limitation is the cost. In the early 2010s, the cost of putting a kilogram of the space shuttle in its final years into low-Earth orbit ranged from $18,000, the European Ariane 5 to $9,000, and the Russian Proton to $5,000 (which already is not available for European operators due to the war in Ukraine).

SpaceX, with its strong long-term contracts, especially with NASA, has already cut the cost substantially. Their Falcon 9 allows access for as little as $2,700/kg, while the Falcon Heavy brings this down even further to around $1,400/kg.

Starship, with a payload of up to 150 tons, could drastically lower these figures. If SpaceX remains a dominant player, it would have a free hand to set prices and maximize profits.

The launch market is increasingly competitive, but most of the new entrants are not European. Blue Origin, a private company owned by Amazon founder Jeff Bezos, is developing a rocket called the New Glenn, which it claims will be one of the most affordable launch vehicles available. China’s space program also aims to compete on cost efficiencies and increase the frequency of launches from mobile and maritime platforms.

So regardless of SpaceX’s near-term setbacks, the European Union has to act now or assume it will be left behind. Brussels has several space projects and initiatives, such as the Galileo satellite navigation system and the observation program for Copernicus Earth. The Ariane 6 launcher is under development, offering an estimated price of $7,200/kg to reach low-Earth orbit, more expensive than existing SpaceX alternatives. Although European commercial cargo operators could benefit from access to a cheaper US space transport market, over-reliance on the US leaves the Union in a vulnerable position.

The implications go far beyond the commercial realm. Starship could potentially grant exclusive access to space to the US military for a fraction of today’s cost, revolutionizing the role space plays in defense. The new economics of the space industry means that, even for military power, the problem is no longer simply having the ability to put a satellite into orbit, or shoot down a hostile satellite. When a new satellite costs many times less to launch than the anti-satellite missile that ultimately shoots it down, those with the cheapest and most reliable launch capabilities will have a great strategic advantage.

Europe has no hope of matching that performance for now, and there are no quick fixes. First, in terms of research and development, Europe must prioritize investment in reuse and cost-competitive access to space. Second, the EU must be willing to take more risks and increase overall funding from the public and private sectors for space travel. Third, long-term contracts from EU and public space agencies should be increased, with separate streams for new and established players. Finally, Europe must continue to build on its strengths, including space components, instruments and satellite manufacturing.

The Starship mishap opens a narrow window of opportunity for Europe to start picking up the pace of the competition. Given the attention paid to strategic autonomy and economic security, it is time for the EU to reassess its objectives and approaches in space as well.

Entry originally published in English on the website of Bruegel.