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Wednesday, November 15, 2023

European governments and companies seek changes to georeturn

Philippe Baptiste, chief executive of the French space agency CNES, said Nov. 14 that changes to georeturn policies were needed to make Ariane 6 more competitive. Credit: SpaceNews/Jeff Foust

BREMEN, Germany — European government and industry officials say the policy of “georeturn,” which guarantees nations receive contracts in proportion to their investments, needs to be adjusted, particularly to make Europe’s launch industry more competitive.

In sessions at the Space Tech Expo Europe conference here Nov. 14, leaders of national space agencies and executives of major space companies said georeturn policies of the European Space Agency should be changed in unspecified ways, but argued against doing away with those policies entirely.

The concern, they said, was that those policies, which guarantee ESA member states that at least 85% of their contributions to programs will be returned in the form of contracts to companies in those nations, creates inflexibility that makes it difficult for European vehicles like the Ariane 6 and Vega C to be cost-competitive on the global market.

“Being more competitive starts today,” said Philippe Baptiste, chief executive of the French space agency CNES, in a conference keynote address. “We have to reduce costs. We are ready to simplify as much as possible the complex system in which we live. We can get rid of some part of the georeturn, at least for the exploitation of the Ariane 6.”

He said that some subcontractors on Ariane 6 have increased their prices by almost 60% after the first 15 vehicles. “It’s not acceptable.”

Pierre Godart, chief executive of ArianeGroup Germany, said he is locked into his suppliers because of georeturn policy. “I cannot choose my supplier. It is decided,” he said during a later conference panel. “Even if I have suppliers who are not performing, I cannot change them.”

He referred to the large price increases from suppliers that Baptiste mentioned. “I have zero chance to change them,” he said. “Then, I am blamed that Ariane is late, Ariane is too expensive.”

Marc Steckling, head of Earth observation, science and exploration at Airbus Defence and Space, said he “fully supports” georeturn but acknowledged it has weaknesses. “Sometimes, due to georeturn constraints, companies are selected that are not on top of the job,” he said. Georeturn “needs to be tailored in order to allow a competing element when selecting subcontractors.”

“We need to think about how and where to apply georeturn,” said Walther Pelzer, director-general of the German Space Agency at DLR, in another conference keynote. “We should come up with smarter georeturn methods, but we should stay with georeturn.”

Doing away with georeturn, he warned, could seriously harm ESA. “If we want to crash ESA, getting rid of georeturn would be the best way.”

Marco Fuchs, chief executive of OHB, also defended georeturn in general saying it is essential get member states to contribute to ESA’s optional programs. “I believe that of you eliminate this concept of georeturn, you would probably see a sharp drop in commitments,” he said. “I have not seen any government willing to spend substantial money without knowing if something comes back or not.”

It’s likely some changes to georeturn will be needed to implement some of the launch-related policies adopted by ESA members at the Space Summit ↗ Nov. 6 in Seville, Spain. That included plans for a competition for launch services as well as for the development of a commercial cargo vehicle, competitions where there will be no guarantee what companies and countries will win funding.

“There are many questions about georeturn,” said Géraldine Naja, ESA’s director of commercialization, industry and procurement, in a talk at the conference. She said the agency was working on proposals for different ways to apply georeturn to ESA programs in ways that will enhance competitiveness, but didn’t discuss what those proposals might entail.

“It must be in the direction of good competition and good competitiveness,” she said of georeturn. “We shall evolve georeturn in that direction.”


Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews.

He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science…
More by Jeff Foust


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