Faced with increasingly aggressive international competition and soaring energy costs, the European launcher industry is under severe strain. The budgetary ambition of the European Space Agency (ESA) and the European Union is therefore a key issue for André-Hubert Roussel, Chief Executive Officer of ArianeGroupand Eurospace, who spoke to EUROPE on Wednesday 26 October.
The budgetary issue and, more generally, the future of the European launcher sector (in particular the development of reusable launchers), will be at the heart of the European Space Agency’s Ministerial Council to be held on 22 and 23 November. This EU Council will decide on the budgetary subscriptions of the Member States and Associate Member States for the next three years.
“ESA Director General Josef Aschbacher would like to see €3 billion in funding for launchers. It is important to sustain the effort on autonomous access to space, at least a budget similar to that of Seville (the last Ministerial EU Council of 2019), taking inflation into account, commented Mr Roussel. ArianeGroup had suggested a higher budget, he said.
For ArianeGroup, which is proposing a new family of reusable European launchers (supported in particular by the Salto and Enlighten projects under the Horizon Europe framework programme), the forthcoming decisions will be crucial in securing Europe's sovereign access to space, he stressed.
The other major event for the future of the European launcher sector will be the Space Summit in March 2023, which could confirm Europe’s ambition for human spaceflight. “It would be unbelievable if Europe did not have a manned flight programme, when all the other major space powers in the world are investing heavily in this capacity”, he added.
The mid-term review of the Multiannual Financial Framework
Energy inflation is another crucial issue for Mr Roussel. “Inflation of industrial costs must be taken into account! And I really hope that the mid-term review of the Multiannual Financial Framework will take this into account, because the European economic model is characterised by two major specificities: the profitability of our industry is linked to the level of public commitment to finance its upstream developments, and these projects are contracted over the long term”, said the CEO.
“At the moment, with the war in Ukraine, we are experiencing an explosion in our industrial costs which is absolutely considerable, because we have extremely energy-intensive activities, such as producing ceramic composite materials. However, the budgets voted by the Parliament and steered by the European Commission are at fixed-price, without keeping up with inflation”, he continued. In his view, it would be necessary to make “redeployments of appropriations” in the framework of the forthcoming negotiations in a non-extendable European budget.
The situation has become so untenable, he continued, “that it would not be impossible for some manufacturers to refuse institutional orders because of a lack of flexibility”. And to compare with negotiations between private actors: the contractual commitments are shorter term and contain ‘rendez-vous’ clauses, if necessary.
Institutional under-investment and the issue of geographical return
The European industry is not on a level playing field with international competition, especially from the US, he said. Europe’s historical under-investment in space compared to the United States is indeed obvious: “the United States spends 70 dollars per capita per year on space, while Europe spends only 10 euros”.
Furthermore, he recalled that the US industry had a Buy American Act (a law that requires the purchase of goods produced on American territory for direct purchases made by the American government) that was particularly protective of the space sector.
He pointed out that New Space, notably SpaceX, was driven, among other things, by massive public orders, unlike the European sector, whose order book is largely driven by private orders.
However, for the time being, according to him, “Europe has not yet put in place a complete and coherent European preference. However, we are on the right track”, he added, noting a growing awareness among political actors of the importance of the space sector for European sovereignty.
Even if this is not entirely new. “Don't forget that Ariane 62 (a two-booster launcher, lighter than the four-booster Ariane 64 variant) was developed at the time of the annexation of Crimea with a view to developing a European solution to replace our dependence on Russian Soyuz launchers”, he stressed. “The Russian decision to suspend the Soyuz (see EUROPE 12900/13) launch simply came too soon”.
Finally, Mr Roussel insisted on the “re-evaluation of the principle of geographical return”, of ESA for access to space. In his view, this principle, which was originally virtuous, now generates constraints that hamper the sector’s competitiveness.
Ariane 6 delay
Mr Roussel returned to the delay of the Ariane 6 inaugural launch, which is now scheduled for the last quarter of 2023, according to the latest ESA announcement (see EUROPE 13038/26). However, the executive director said that his group and all the participants in the programme are mobilised for an inaugural launch in the second half of the year at the earliest, he assured. (Original version in French by Pascal Hansens)