ESA launches competition for new space rockets

The European Launcher Challenge aims to select and fund up to 150 million euros for future commercial launch vehicles. New private players are entering a context where companies complain about the lack of demand for orbital services.

BY EMILIO COZZI

2025 could be remembered as the year Europe redesigned its autonomy in accessing orbit, overcoming the ArianeGroup/Avio duopoly in favor of a market that prioritizes competition. ESA, the European Space Agency, has launched a competition for new space rockets. Named the “European Launcher Challenge,” its goal is to select and fund up to 150 million euros for future commercial launch systems. It starts these days with a preparatory phase aimed at gathering information before the application and allocation of funds for the winning projects.

ESA’s Director General, Joseph Aschbacher, has long referred to this as the “launcher crisis,” pointing to Europe which, since July 2023, while awaiting the debut of Ariane 6 (scheduled for July 9) and the return of Vega-C, lacks a rocket to reach orbit. Now, the agency has followed up on the announcement made last November at the ESA Council in Seville, with the publication of the first “Request for Information” addressed to companies, inviting launch service providers (or aspirants) to present their ideas.

Collection of ideas and tender

This first stage, specifies ESA, will not be a selection but a collection of ideas, a way to “better assess the state, ambitions, and perspectives of European launch service providers.” These ideas will also be discussed with the proposers to then understand how to proceed with evaluating the actual proposals. The main requirement a commercial launcher provider must meet is territoriality, meaning everything must take place in an EU or ESA member state. This applies to the headquarters and legal seat, the location of the launcher’s development and construction, and the launch site. Participation in this phase will close on June 30, 2024.

The second stage will be the tender, where companies will submit proposals for the new launchers. This competition should conclude in November 2025, with the Ministerial Council, where ESA’s 22 member states discuss and fund the programs for the next three years. During these discussions, the issue of launchers has always been central, especially among representatives from Germany, France, and Italy. Next year, however, the cast of protagonists could be broader and lead to unexpected contract signings.

Germans, French, and Spaniards

The companies winning the tender will be invited to negotiation meetings from which ESA support, up to 150 million euros each, could emerge to demonstrate their ability to develop vehicles capable of meeting “institutional mission needs”; from there, the path to service contracts will be more or less paved. The intent is to move away from the logic that has so far entrusted only two companies with the responsibility of launch service for European institutions, thus positioning them in the market.

These are interesting intersections of destinies: at the same 2023 Seville Council, ESA member states decided to cover, through additional funding, part of the extra production costs mainly due to the super-inflationary pressures in the Euro area, specifically up to 340 million euros annually for Ariane 6 and up to 21 million euros annually for Vega C. At the same time, Germany pushed to inaugurate the “European Launcher Challenge,” a new competitive phase in the market for new launcher tenders. It is no coincidence that two of the emerging companies in this sector are German: Rocket Factory Augsburg (RFA) concluded an agreement with the French space agency, CNES, in 2020 to use the Diamant launch site within the Guiana Space Center, and also use the launch pad on the Norwegian island of Andøya. Another German company, Isar Aerospace, has made the same choice.

RFA and Isar, along with Spain’s PLD Space and Scotland’s Orbex, have already been selected to provide launchers to the European Flight Ticket Initiative, another idea conceived in early 2024 with the European Commission to give startups in the sector the opportunity to fly through public funding participation in launch costs. Integrated into the European program called “Boost!” – with the exclamation point – this is what many large companies expect.

A small market for many

The launcher challenge is open to any economic operator meeting the aforementioned geographical requirements, which could involve already established companies like Avio and ArianeGroup, or MaiaSpace, a company born from ArianeGroup outside the ESA context and 100% French. Therefore, it is not excluded that, starting in 2025, the landscape will become crowded with new actors potentially competing with each other, a scenario that also includes the two historical protagonists, who already today have a rich order portfolio and have received billions of euros in public funds. In other words, it is evident that the balances – with significant consequences on international politics – will become increasingly difficult.

To highlight the complexity, one should also remember the strong stance of ASD Eurospace, the association of the most important European space companies: in reaction to the conclusions of the recent Space Council between ESA and the European Union, Eurospace wrote, in black and white, that not enough has been done to stimulate a market that today intercepts a demand for space services smaller than that of the United States. All while an international market confrontation is complicated by the fierce competition from SpaceX.

In America, there are two giants in the space launch ecosystem: SpaceX and United Launch Alliance (ULA), plus the smaller RocketLab. Although the comparison between the two sides of the Atlantic is somewhat daring, it still highlights how the challenge facing Europe is primarily to put space at the center of the interests of governments and institutions to stimulate demand for services.

“The current pace of global transformation requires more than disjointed supranational, intergovernmental, and national industrial strategies,” writes Eurospace. “Other space powers like the United States have launched adequate programs to support the innovation and sustainability of their industrial base. It is time to take decisive action to equip Europe with the necessary tools to become a true ‘space power,’ commensurate with its imagined global stature […] it is necessary and urgent that Europe develops and implements a coherent European-level industrial strategy for space.” A first step, without which it will be difficult to understand how to make other significant ones.