Page 2: Who pays when a satellite crashes?

Contents

The Liability Convention distinguishes between two scenarios:

• On Earth: If a satellite or rocket stage causes damage to the Earth's surface or an aircraft, the launching state is absolutely liable – i.e., regardless of fault. This strict liability applies even if a technical defect was unforeseeable or the object originated from a private operator. This also applies to controlled re-entry: If something goes wrong during the deorbiting of the ISS and debris hits inhabited areas, the involved launching states – primarily the USA – are liable.
• In space: collisions between satellites are subject to liability for fault. Whoever causes damage to another space object must have acted negligently or intentionally.

The most famous liability case is the crash of Kosmos 954 over Canada in January 1978. The Soviet reconnaissance satellite with a nuclear reactor on board did not completely burn up and contaminated a huge area. Canada demanded 6 million Canadian dollars in damages. After years of negotiations, the Soviet Union finally paid 3 million CAD in April 1981 – without admitting fault, purely as an "ex gratia" payment. The case shows: Even clear liability claims can practically only be enforced diplomatically.

Another problem is the definition of "launching state". All states that carry out or arrange a launch, plus those from whose territory or facilities the launch takes place, are considered launching states. Example: A German company launches a satellite with a SpaceX rocket from Florida. Then both Germany and the USA are launching states – both are jointly and severally liable.

To limit liability risks, launching states often conclude internal agreements for international missions that regulate who bears which share in the event of damage. The USA has no interest in being liable for a German Earth observation satellite once it is in orbit – they merely offer a transport service.

Important: A state cannot relinquish its status as a launching state retroactively. The principle "Once a launching State, always a launching State" means: Liability remains indefinitely. If a 30-year-old satellite breaks apart and damages another object decades later, the original launching state is still liable.

Germany without Space Law: A Decade of Delay

While the USA has been regulating commercial spaceflight in detail since the 1980s and France passed the French Space Operations Act (FSOA) back in 2008, Germany is lagging. The French law requires every operator – whether state or private – to apply for a permit from the responsible ministry before launching or controlling a satellite. France checks both the technical and financial capabilities of the applicant and their compliance with safety-relevant regulations. Violations can result in fines of up to 200,000 euros and, in safety-relevant cases, even prison sentences. The FSOA is considered a European benchmark: it links national supervision with the obligations from the UN space treaties.

Germany, on the other hand, still has no comparable, comprehensive space law. The consequence: The federal government is internationally liable for all space activities of German citizens or companies but cannot claim recourse from the operators in case of damage because the legal basis is missing.

In September 2024, the Federal Cabinet decided at least on key points for a future space law. The most important points:

• Permit requirement: All private space activities will require a license in the future, which is to be issued by an authority within the purview of the Federal Ministry for Economic Affairs and Climate Action (BMWK).
• Liability cap: Private operators are liable up to a maximum of 50 million euros per claim; beyond that, the federal government will step in.
• Mandatory insurance: Operators must provide proof of liability insurance up to the maximum limit.
• Space debris prevention: Technical requirements for the prevention of space debris, including binding disposal plans after the end of the mission.

The German space industry reacts with mixed feelings. According to a BDI survey, 70 percent of the new space start-ups surveyed rate the key points negatively. Main criticism: excessive bureaucracy and unclear procedures.

The Bundeswehr is currently examining the establishment of its own satellite constellations to ensure its communication and reconnaissance capabilities independently of civilian or foreign operators in the future. Considering growing geopolitical tensions, the Bundeswehr plans to establish its own, securely encrypted network of small satellites in low Earth orbit (LEO) – a kind of German military counterpart to Starlink. The aim is to guarantee sovereign, interference-resistant data transmission and situational reconnaissance in crisis situations, even if terrestrial networks fail.

Orbits: Legally Equal, Practically Different

From an international law perspective, it makes no difference whether a satellite flies at an altitude of 500 or 36,000 kilometers. The basic obligations – approval, registration, liability – apply universally. In practice, however, there are significant differences related to the physics of the respective orbit.

• Low Earth Orbit (LEO, 200 - 2000 km): Satellites in low orbits are still in the remnants of the Earth's atmosphere. Friction slows them down over years until they eventually burn up. Starlink operates at an altitude of around 550 km – there, the natural lifespan without orbital boost is about five years. SpaceX uses this deliberately: defective or outdated satellites are simply no longer boosted and burn up automatically.
• Geostationary Earth Orbit (GEO, 35,786 km): Geostationary satellites move synchronously with the Earth's rotation. Deorbiting into the atmosphere would require about 1500 m/s Delta-v, where Delta-v (Δv) denotes the total change in velocity that a spacecraft can achieve with its engines and thus the measure of its maneuvering and energy reserves. Because deorbiting would be costly, decommissioned GEO satellites are instead moved to a "graveyard orbit", about 235 – 300 km above the geostationary orbit.