Disclaimer: The views expressed in this work represent the personal views and conclusions of the authors writing in their personal capacity and do not reflect the official position of the Stanford Space Law Society.

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Since the 1967 Outer Space Treaty, space has repeatedly been subject to international regulation. On June 25, 2025, the European Commission (the Commission) published its proposal for a “Regulation of the European Parliament and of the Council on the safety, resilience and sustainability of space activities in the Union” (the “EU Space Act”).[1] This article introduces the proposal and then focuses on a central issue of the legislative act: the exemption for military use of “space objects” contained in the National Security Clause.

This broadly defined sectoral exemption for security purposes undermines the harmonization of the European space market and facilitates regulatory fragmentation. This article demonstrates that while a non-differentiated National Security Clause addresses the need for state sovereignty, it also weakens the binding effect and effectiveness of the regulation.

Significance and Structure of the EU Space Act

1)    Significance

According to the European Union Agency for the Space Programme (EUSPA), the market for GNSS (Global Navigation Satellite Systems, such as GPS or Galileo) and EO (Earth Observation, e.g., satellite monitoring for climate and agriculture) alone is expected to grow from €260 billion in 2023 to around €590 billion by 2033.[2] According to the Space Foundation, the total value of the global space economy reached $570 billion in 2023.[3]

Given the high costs of goods and services in this sector and the massive industrial investments from actors such as the United States (U.S.) and China, no single European nation-state can compete internationally on its own.[4] Therefore, a coordinated European legal framework is consistent with the European aim of enlarging its commitment to the space sector. The Commission aims to harmonize the rules for space activities through this regulation, with the intention for it to enter into force on January 1, 2030.[5]

2)    No European SpaceX?

The criticism that such regulation would prevent the emergence of a “European SpaceX” must be refuted.[6] Unlike the U.S., the EU traditionally relies on a rule-based and predictable market environment that creates legal certainty and encourages investment.[7] A clear legal framework also ensures comparability among Member States and reduces inefficiencies.

Companies such as SpaceX have employed risky testing strategies that have led to serious launch failures, environmental damage, and a loss of trust in space technology. On the other hand, the EU pursues a different approach. Priority is given to safety, sustainability, and long-term competitiveness.[8] The goal is to achieve controlled market leadership in key areas, such as Earth observation, GNSS infrastructure, and satellite communications.[9] Focusing on these few capital-intensive sectors enables the aggregation of investment volumes realistically attainable by the EU. Due to their systemic importance, these sectors constitute long-term projects where the development of reliable technology is more promising than in other investments focused on rapid market capture. It is highly doubtful that European capital has any serious interest in entering into a race for speed with American, Russian, or Chinese space missions.[10]

3)    Structure of the EU Space Act

Article 1(2) EU Space Act identifies “safety, resilience, and environmental sustainability” as the regulatory objectives.[11] In practice, these vague targets are unlikely to significantly influence the interpretation of individual provisions.

The proposed regulation is divided into seven titles:

1. Title I contains general provisions.
2. Title II regulates authorization and registration of space activities, setting conditions under which operators in the EU may obtain permission to conduct space activities.
3. Title III stipulates that each member state must designate or establish one or more national competent authorities tasked with monitoring compliance with the EU Space Act. These national authorities are required to transmit information to EUSPA, which records it in the Union Register of Space Objects (URSO).
4. Title IV regulates the specific requirements that space activities must comply with.
5. Title V authorizes the Commission to adopt equivalence decisions, allowing permits from third countries to be recognized and setting rules for international organizations.
6. Title VI (“Supporting Measures”) aims to ensure that companies are not overwhelmed by the new legal obligations.
7. Title VII contains final provisions.

Title IV governs safety and sustainability requirements. Since space activities frequently produce significant emissions, they conflict with the EU’s climate neutrality efforts.[12] Articles 96 to 100 therefore require operators to calculate the ecological footprint of their missions over the entire life cycle of a space mission.[13] This obligation covers design, manufacturing, operation, and the end-of-life phase unless an exemption applies. It would also be advisable to establish concrete, sanctionable requirements for reducing environmental impacts and emissions. Informational obligations alone will increase administrative burden without delivering real ecological benefits.

The National Security Clause

1)    Background

Member States traditionally view the exercise of military activities as an expression of their national sovereignty. Modern space technologies play a central role: for example, GPS systems provide positioning, navigation, and timing data not only for civilian navigation but also for precision-guided missiles and drones.[14]

As an expression of respect for state sovereignty interests, the EU Space Act contains a National Security Clause in Article 4: “This Regulation shall be without prejudice to the responsibilities of Member States for safeguarding national security and other essential State functions.”[15] This clause permits Member States to exempt activities from the regulation’s scope if they serve national security interests, especially in a military context. The provision aims to distinguish Union competences under the Treaty on the Functioning of the European Union (TFEU) from the sovereignty protected under the Treaty of the European Union (TEU).[16] On one hand, TFEU Article 189 and Article 114 give the EU competences to legislate on space policy and certain military matters under the internal market, respectively. On the other hand, in the field of security and defense, the TFEU articles are often interpreted in the light of the third sentence of Article 4(2) of TEU, which states: “In particular, national security remains the sole responsibility of each Member State.”[17]

At the same time, Article 4 of the EU Space Act contains no limitations and leaves open the criteria by which Member States may consider a threat to national security. The core problem lies in this unrestricted exemption: a blanket exception jeopardizes regulatory coherence.

2)    The Dual-Use Issue

Space technologies are almost always dual-use technologies. This means that infrastructures like Earth observation satellites, launch vehicles, global navigation systems, and satellite-based data transmission systems can be used for both civilian and military purposes.[18]

A clear technical separation is virtually impossible, regardless of regulation or political will, and is often institutionally breached.[19] Space projects are regularly conducted through public-private partnerships, in which private actors participate in security-related programs, while militarily motivated systems often build on civilian developments.[20] This structural entanglement makes a provision like Article 4 of the EU Space Act, which entails a blanket exemption for military-use technologies, practically unenforceable with clear distinctions.

The National Security Clause allows Member States to exempt entire projects from the regulation’s scope once they declare them to be a military project, even if civil benefits predominate. Without sufficient oversight, a military declaration can result in the civil-use results of a project escaping effective regulation. This would undermine the regulation’s purpose and amount to national self-empowerment to circumvent EU legal standards. Furthermore, it creates the risk of regulatory competition among Member States, in which projects are intentionally excluded from the EU framework for industrial policy reasons. Such a development would inevitably fragment the European space market, which the regulation seeks to harmonize.

The problem is worsened by the fact that Article 4 of the EU Space Act refers not only to national security interests (encompassing military, intelligence, and police activities) but also to “other essential State functions.”[21] This wording appears to reference the second and third sentences of Article 4(2) of TEU, which, due to their vague and rather declaratory nature, are unsuitable for enhancing understanding of the National Security Clause.[22]

3)    The Commission’s Inadequate Approach

In Recital 36, the EU Space Act proposal acknowledges the dual-use issue but does not provide a legally secure solution. Specifically, it states:

“Space objects that are only partially used for defence purposes should be excluded from the scope of this Regulation when they need to be placed under a Member State operation and control … only for the duration of the … space mission …. In such cases, it is for each Member State to determine … whether such space object would fall under the above mentioned [sic] exclusion.”[23]

It is thus proposed that Article 4 of the EU Space Act does not automatically apply in cases of dual‑use, but Member States have discretion wherever they assume control and command over a space object. However, this limitation is insufficient because it remains unclear what precisely constitutes “operation and control” and to what extent this status must be objectively justified.  Consider a scenario where Company A operates the satellite bus (propulsion, altitude) while Company B independently controls the payload (sensors, lasers) via software. Here, the legal definition becomes blurred since operation may refer to maintaining the orbital slot or to the execution of the mission objectives. Given the considerable discretion allowed to Member States, it is unlikely the National Security Clause will be applied uniformly or effectively across the EU.

4)    Reformulation of the Clause

In my view, the solution lies in a precise delimitation of exemptions by the EU:

• The exemption should generally apply only if space objects are used exclusively for military or police purposes.
• The terms “military use” and “police use” must be explicitly and narrowly defined.
• Outside of sufficiently concrete threats, the exemption should not cover the entire regulation but only those provisions that regularly conflict with significant military or police interests.[24]
• For civilian projects, temporary military or police use should be exempt only if national security interests are genuinely and sufficiently threatened. After any temporary use ends, the rules of the EU Space Act should automatically apply again. If Member States want to permanently exclude certain rules, they must designate the space object for permanent exclusive military or police use.
• Member States should report and justify exemptions to the Commission through the notification mechanism currently regulated in Article 33 of the EU Space Act.[25]
• To prevent baseless claims of purely military or police use, time-limited bans should be established on repurposing space objects and their outputs from military or police use into civilian use.
• Where European national-level authorities other than military or police, due to national security interests or essential state functions, request exemptions from parts of the space regulation outside immediate concrete threats, such exemptions should be granted within a narrowly circumscribed discretionary framework. The wide variety of conceivable cases argues against rigid rules here; also, such applications are likely to be marginal in practice, so a more detailed discretion exercised by an approving EU authority is appropriate.

These proposals would strengthen the internal market without unduly restricting national security interests.

5)    Limits from Article 4(2), Third Sentence TEU and Article 346 TFEU

One might argue that primary law requires a National Security Clause in the form proposed by the Commission. This is not the case. Article 4(2), third sentence TEU was included primarily to address Member States’ concerns that using the flexibility clause of Article 352 TFEU or the simplified amendment procedure of Article 48(6) TEU may lead to further EU competences that erode member state sovereignty over national security.[26] However, insofar as existing primary law balances EU competences with Member States’ competence in national security, this provision itself has no independent legal effect.[27] Article 4(2) has a proclaiming character and was not intended to change more differentiated provisions.

Here, Article 346 TFEU is decisive.[28] It permits Member States, contrary to inconsistent secondary law, to withhold information for national security protection and permits the production and trade of arms, munitions, and war material. However, this provision must be interpreted in the context of primary law, which pursues a free and unified internal market.[29] Thus, its conditions must be interpreted narrowly. Moreover, it is a discretionary rule favoring Member States, whose invocation must be subject to a proportionality test.[30]

The Court of Justice of the European Union clarified this in a case where Italy intended to award contracts for helicopters that could be used both civilly and militarily.[31] Italy invoked the predecessor to Article 346 TFEU but lost.[32] The Court held that the exemption applies only if military use is unquestionably established.[33]

At the subsequent level of discretionary application, a particularly strict proportionality test[34] is required for dual-use goods that are to be placed on the list pursuant to Article 346(2) TFEU.[35] For the same reasons and to ensure legal certainty, it is appropriate to assume that the EU legislator may also predefine this proportionality test abstractly in certain subject areas, as long as national security interests are not overly restricted.

In any event, a regulation like the one proposed here, which imposes a strict burden of justification for military exemptions under the EU Space Act and at least temporarily binds Member States to their military and not civil declarations, is not contrary to Article 346(2) TFEU.

Conclusion

The EU Space Act proposal subjects certain defined space activities in the EU to an authorization requirement. This is intended to institutionally secure the safety and sustainability of these activities and their preparatory phases. However, the exception for national security interests provided in the regulation threatens to undermine its regulatory purpose. The National Security Clause, as proposed by the Commission, is neither necessary for legal purposes nor compatible with the regulation’s objectives. Article 4(2), third sentence TEU, and Article 346 TFEU’s mandatory limits on space regulation can be preserved by more differentiated and controllable mechanisms. As in many areas of law, a flawless delimitation will not be achievable, but the Commission should fulfill its responsibility to ensure differentiation to the greatest extent possible.

* Jasper Tretow is a judicial clerk (Rechtsreferendar) at the Saarland Higher Regional Court (Oberlandesgericht). He studied at Bucerius Law School, Stanford Law School, and the University of Speyer. This article was originally published on Verfassungsblog under a Creative Commons Attribution-ShareAlike 4.0 International License (CC BY-SA 4.0, https://creativecommons.org/licenses/by-sa/4.0/). Republished under the same license in a translated and modified version. For the original German version, see Jasper Tretow, “Der EU Space Act: Warum die National Security Clause gestrichen werden sollte,” VerfBlog, September 16, 2025, https://verfassungsblog.de/der-eu-space-act/, DOI: 10.59704/8a6311e284f13122.

[1] “Proposal for a Regulation of the European Parliament and of the Council on the Safety, Resilience and Sustainability of Space Activities in the Union,” European Commission COM (2025) 335 final, June 25, 2025, https://eur-lex.europa.eu/resource.html?uri=cellar:c7906dd7-5283-11f0-a9d0-01aa75ed71a1.0001.02/DOC_1&format=PDF (hereafter “EU Space Act”).

[2] “EU Space Market and Users,” European Union Agency for the Space Programme, January 29, 2025, https://www.euspa.europa.eu/eu-space-programme/eu-space-market-and-users.

[3] Of the $570 billion, $445 billion comprises commercial revenues and $125 billion comprises government spending. Space Foundation Editorial Team, “Space Foundation Announces $570B Space Economy in 2023, Driven by Steady Private and Public Sector Growth,” Space Foundation, accessed November 29, 2025, https://www.spacefoundation.org/2024/07/18/the-space-report-2024-q2/.

[4] According to the Bureau of Economic Analysis (BEA), the gross output of the space economy in 2023 amounted to $240.9 billion. See Patrick Georgi and Chris Surfield, “New and Revised Statistics for the U.S. Space Economy, 2012–2023,” The Journal of the U.S. Bureau of Economic Analysis, March 31, 2025, https://apps.bea.gov/scb/issues/2025/03-march/0325-space-economy.htm. Based on the global space economy size estimated at approximately $570 billion by the Space Foundation, the U.S. market share is roughly 42%. Id. Meanwhile, China reported a total output value of 575.8 billion yuan (around $79.9 billion) in 2024. “China Sees Satellite Navigation Industry Output Growth in 2024,” Xinhua, May 18, 2025, https://english.news.cn/20250518/b60c533564084ae28f3387223e964c39/c.html.

[5] See Article 119 of the EU Space Act, supra note 1, at 115.

[6] German Aerospace Industries Association (BDLI), “Position Paper on the EU Space Act (EUSA),” accessed November 29, 2025, https://www.bdli.de/sites/default/files/2025-09/250826_Positionspapier_EUSA_EN.pdf. In this position paper, BDLI cautions that the proposed regulatory framework must avoid excessive administrative burdens to ensure European companies remain competitive against global market leaders.

[7] See generally Anu Bradford, The Brussels Effect: How the European Union Rules the World (Oxford University Press, 2020), 25-66.

[8] Ibid.

[9] See Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 Establishing the Union Space Programme and the European Union Agency for the Space Programme and Repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU, 2021 O.J. (L 170/69), Article 11(1).

[10] In 2024, Europe launched three space missions, whereas the United States and China conducted 154 and 68 launches, respectively. See Giacomo Gatto et al., “Is Europe Still on the Launchpad? Reshaping Its Space Ecosystem to Lead,” McKinsey & Company Aerospace & Defense, November 24, 2025, https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/is-europe-still-on-the-launchpad-reshaping-its-space-ecosystem-to-lead.

[11] EU Space Act, supra note 1 at 37.

[12] Consolidated Version of the Treaty on European Union Article 3(3) TEU, Official Journal of the European Union, October 26, 2012, 2012 O.J. (C 326) 13, 5, https://eur-lex.europa.eu/resource.html?uri=cellar:2bf140bf-a3f8-4ab2-b506-fd71826e6da6.0023.02/DOC_1&format=PDF.

[13] EU Space Act, supra note 1 at 101–104.

[14] For example, see “The Use of GPS in UAVs,” The Hemisphere GNSS Compass Blog, accessed November 29, 2025, https://blog.hemispheregnss.com/the-use-of-gps-in-uavs.

[15] EU Space Act, supra note 1 at 38.

[16] Consolidated Version of the Treaty on the Functioning of the European Union, October 26, 2012, 2012 O.J. (C 326) 47, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT (hereafter TFEU); Consolidated Version of the Treaty on the European Union, October 26, 2012, 2012 O.J. (C 326) 13, https://eur-lex.europa.eu/resource.html?uri=cellar:2bf140bf-a3f8-4ab2-b506-fd71826e6da6.0023.02/DOC_1&format=PDF (hereafter TEU).

[17] TEU, supra note 16.

[18] “The Use of GPS in UAVs,” supra note 14.

[19] For example, the Italian government purchased helicopters for civilian as well as military use in the Court of Justice of the European Union, Case C-337/05, Commission v. Italy, ECLI:EU:C:2008:203, ¶¶ 45-49.

[20] Wichuta Teeratanabodee, “Public-Private Partnerships in Outer Space: Implications for the Defence and Security Sector” (Working Paper, S. Rajaratnam School of International Studies, Singapore, March 2025), 22, accessed January 1, 2026, https://rsis.edu.sg/wp-content/uploads/2025/03/WP344.pdf.

[21] Matthias Pechstein, Carsten Nowak, and Ulrich Häde, eds., Frankfurter Kommentar EUV/GRC/AEUV [Frankfurt Commentary on the TEU, the CFR, and the TFEU], 2nd ed., München: Verlag, 2023, TEU article 4 EUV ¶ 52 (in German).

[22] While European primary law takes precedence over secondary law, certain primary laws also contain broader principles and concepts that are not necessarily suitable for defining secondary law in more detail.

[23] EU Space Act, supra note 1 at 19-20.

[24] For example, there is no reason to completely exclude articles 96 to 100 under Chapter III Environmental Sustainability of Space Activities of the EU Space Act for military missions. The obligation specified therein to calculate the ecological footprint of a mission should only be excluded in cases of time constraints, and in such cases, the calculation can also be carried out retrospectively. See EU Space Act, supra note 1 at 101-04.

[25] EU Space Act, supra note 1 at 61.

[26] Article 352(1) sentence 1 TFEU: “If action by the Union should prove necessary, within the framework of the policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and the Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, shall adopt the appropriate measures,” supra note 16; Article 48(6) sentence 2-4 TEU: “The European Council may adopt a decision amending all or part of the provisions of Part Three of the Treaty on the Functioning of the European Union. The European Council shall act by unanimity after consulting the European Parliament and the Commission, and the European Central Bank in the case of institutional changes in the monetary area. That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements,” supra note 16; Matthias Pechstein, Carsten Nowak, and Ulrich Häde, eds. Frankfurter Kommentar EUV/GRC/AEUV [Frankfurt Commentary on the TEU, the CFR (Charter of Fundamental Rights of the European Union), and the TFEU], 2nd ed., München: Verlag, 2023, TEU art. 4 ¶ 50 (hereinafter Frankfurt Commentary).

[27] Frankfurt Commentary TEU art. 4 ¶ 51, supra note 26.

[28] Article 346 TFEU: “(1) The provisions of the Treaties shall not preclude the application of the following rules: (a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security; (b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes. (2) The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply.” TFEU, supra note 16.

[29] See TEU article 3(3) and TFEU article 26, supra note 16.

[30] Frankfurt Commentary TFEU art. 346 ¶¶ 6–7, supra note 26; Rudolf Streinz, ed., Kommentar zum Vertrag über die Arbeitsweise der Europäischen Union (AEUV) [Commentary on the Treaty on the Functioning of the European Union (TFEU)], 3rd ed., München: Verlag, 2018, commentary by Juliane Kokott on TFEU art. 346 ¶¶ 2, 4 (in German).

[31] Case C-337/05, Commission of the European Communities v. Italy, ECLI:EU:C:2008:203, ¶ 48 (April 8, 2008).

[32] Specifically, Italy invoked ex Article 296 TEC. Ibid. ¶¶ 45–49.

[33] Ibid. ¶¶ 47.

[34] According to settled case-law of the Court of Justice, the principle of proportionality requires that measures adopted by EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued by the legislation. Specifically, the test asks: 1.) Does the measure pursue a “legitimate objective” recognized by the Union? 2.) Is the measure “appropriate” for ensuring the attainment of the objective pursued? 3.) Is the measure “necessary”, meaning that where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the charges imposed must not be excessive? 4.) Are the disadvantages caused not disproportionate to the aims pursued (stricto sensu)? Note: Regarding the standard of review, the EU legislature enjoys a broad discretion in areas entailing complex political, economic, or social choices. In such contexts, the legality of a measure is affected only if the measure is manifestly inappropriate, having regard to the objective which the competent institution is seeking to pursue. While the legislature has further scope for assessment in this regard, administrative actions are subject to closer scrutiny. See, e.g., Case C-293/12, Digital Rights Ireland Ltd v. Minister for Communications, Marine and Natural Resources, ECLI:EU:C:2014:238 ¶ 46 (April 8, 2014).

[35] Frankfurt Commentary TFEU art. 346 ¶ 28, supra note 26.