Europe seeks to emulate NASA’s revolutionary commercial cargo program

The European Space Agency has awarded initial contracts to a German-based startup and one of the continent's established aerospace companies to develop spacecraft to ferry cargo to and from space stations in low-Earth orbit.

ESA announced the two 25 million euro ($27 million) contracts May 22. The Exploration Company, co-located in France and Germany, and Thales Alenia Space of Italy beat out four other companies in the competition for ESA funding through the LEO Cargo Return Service program.

These contracts will run for two years, until June 2026. In this first phase of the program, The Exploration Company and Thales Alenia Space will refine their concepts, mature technologies, and focus on requirements for their cargo vehicles. ESA plans to award contracts for the second phase of the LEO Cargo Return Service program in 2026, eyeing a round-trip demonstration flight to the International Space Station (ISS) in 2028.

The Exploration Company, founded in 2021, says its Nyx cargo transporter could fly to the space station as soon as 2027. Thales Alenia Space's demonstration mission is targeted by the end of 2028, the company said in a statement. The Exploration Company plans to fly a sub-scale reentry vehicle on the first flight of the European Ariane 6 rocket in July. Thales Alenia Space hasn't built a reentry craft, but it manufactured pressure shells for several modules at the ISS.

ESA's requirements stipulate that the commercial European cargo vehicles must be able to deliver 4 metric tons of equipment to low-Earth orbit and return 2 metric tons to Earth.

ESA originally wanted to select three companies to proceed with the European cargo program. Samantha Cristoforetti, an ESA astronaut who leads the procurement effort, said only the two winners "presented a combination of work plan and financing scheme that were suitable for the purposes of this call.”

Cristoforetti told Ars that ESA received "six valid proposals" from European industry. She declined to identify the other competitors, but two of the proposals were believed to come from ArianeGroup and Rocket Factory Augsburg.

A partial commitment

Representatives from ESA's 22 member states met in Seville, Spain, last November to decide on several priorities for the space agency. The meeting produced several key decisions. The member states agreed to adopt a more commercial model for buying launch services from European rocket startups in the future, although in the near term, ESA remains all-in on the long-delayed Ariane 6 and Vega C rockets.

European governments also signed up to the first phase of the LEO Cargo Return Service, but the initial 25 million euro contracts signed with The Exploration Company and Thales Alenia Space will go only so far. At its next high-level budget meeting late next year, ESA will ask its member states for the rest of the funding needed to carry the program through the demonstration flights to the ISS.

ESA works in budget cycles that typically run for three years. This helps ensure stable funding for the agency's programs, but it can stand in the way of the kind of fast-paced change emblematic of startup culture. Nevertheless, Josef Aschbacher, ESA's director general, won approval from his member states in November to use some of ESA's funding to partner with industry on commercial cargo vehicles.

"We want to be on the space station around ’28," Aschbacher said in a press briefing on May 23. "We have to now evaluate in detail the technical proposals and the capabilities, but this is extremely fast, and is actually faster than some of our competitors overseas managed to build such a vehicle."

Aschbacher seems serious about making ESA more nimble. However, the agency's budget and direction are set by European government ministers through the prism of parochial domestic politics.

Artist's illustration of the Exploration Company's Nyx reentry capsule.

The LEO Cargo Return Service program is modeled on NASA's efforts a decade and a half ago to kick-start the development of the US commercial space industry. Through public-private cost-sharing arrangements, NASA's Commercial Orbital Transportation Services (COTS) program fostered two independent vehicles to carry cargo to and from the International Space Station after the retirement of the space shuttle.

"The LEO Cargo Return Service project exemplifies ESA’s commitment to ensuring Europe’s prominent role in space exploration," said Daniel Neuenschwander, ESA's director of human and robotic transportation. "It prepares us for the post-ISS era, strengthening European industry’s competitiveness in low Earth orbit operations, as well as being a test case for the ESA transformation and working differently."

Like NASA's approach with the COTS program, ESA is co-funding the development of the new European commercial cargo spacecraft with private industry. ESA is requiring The Exploration Company and Thales Alenia Space to pay for at least 20 percent of the work covered in the initial two-year Phase 1 contracts. Once the resupply vehicles are operational, ESA or other customers could buy cargo transportation services to low-Earth orbit using fixed-price contracts.

SpaceX and Orbital Sciences, now part of Northrop Grumman, used the NASA investment from the COTS program alongside internal capital to develop the Dragon and Cygnus supply ships and the Falcon 9 and Antares rockets. SpaceX used the vehicles developed through the COTS program as a basis for the human-rated Crew Dragon spacecraft and upgraded versions of the Falcon 9 rocket. The rest, as we know, is history.

The European Space Agency, meanwhile, has flirted with small-scale public-private partnerships focusing on individual technologies that perhaps, one day, could find their way into an operational rocket or spacecraft. But ESA's policies have stood in the way of going all-in with a service contract like COTS, where companies, not the government, are responsible for all engineering design decisions, as long as they meet the agency's requirements.

One of these policies is a rule, known as geo-return, to dole out industrial contracts to companies in each European nation commensurate with that government's financial commitment to an individual project. For example, the governments of France and Germany fund the majority of the Ariane 6 rocket's development costs. So, by rule, most of the design and manufacturing of the Ariane 6 rocket must take place in those nations. This strangles competition among subcontractors and suppliers. The head of the French space agency last year called out the geo-return rule as one of the reasons for rising costs and delays on the Ariane 6 program.

Aschbacher said ESA is not requiring the first phase of the LEO Cargo Return Service to follow the geo-return principle. It's unclear if the second phase, if approved late next year, will be shackled by any geo-return restrictions.

"We contract very differently because we will be the anchor customer," Aschbacher said. "That means we buy a service. We give industry all the freedom to find the best solution technically, but also the best partners, with whomever they want to work with."

Getting to the finish line with the LEO Cargo Return Service program will require "an order of magnitude" more funding than ESA awarded to the two companies in Phase 1, Cristoforetti said. This suggests ESA foresees spending more than $500 million on the program. Not accounting for inflation, NASA spent a similar amount on COTS.

For Phase 2, culminating in the demonstration flight to the ISS, ESA officials anticipate opening the competition to all European industry, not just The Exploration Company and Thales Alenia Space.

Betting on a post-ISS economy

But there's no assured path to transition a European cargo spacecraft from a demo mission to the ISS into operational flights. Right now, the ISS is scheduled to be decommissioned in 2030. NASA and ESA hope privately owned space stations, like those planned by Blue Origin and Sierra Space, Voyager Space and Airbus, Axiom Space, and Vast, will be ready to take over research from the ISS by the end of this decade. There are reasons to be skeptical about this timetable.

For now, Cristoforetti said ESA does not foresee any future European cargo vehicles flying multiple missions to the ISS. "We want them to fly their demonstration missions to the ISS because we prefer to fly the demonstration missions in an environment that we are familiar with," she said. "But we expect the actual services to be targeting the new potential LEO destinations.”

She said European officials could revise this plan if the ISS partners extend the station's lifetime beyond 2030, a possibility if the commercial outposts are not deployed by then.

ESA once boasted perhaps the most capable cargo delivery vehicle in the International Space Station's fleet of resupply freighters. The Automated Transfer Vehicle (ATV) delivered more than 30 metric tons of cargo to the space station in five missions between 2008 and 2014. It also had the ability to refuel the station's Russian propulsion system and boost the lab into a higher orbit. But the ATV cost more than a half-billion dollars per flight, and it didn't have a heat shield, so it burned up on reentry.

With the LEO Cargo Return Service, ESA aims to help commercial industry develop at least two new cargo spacecraft for about the same cost to the agency as a single ATV mission. And these vehicles will be designed for round-trip flights to and from low-Earth orbit.

"It needs reentry capability, a technology which we do not have today in Europe," Aschbacher said.

Abhi Tripathi, who managed certification of the Dragon crew and cargo spacecraft for SpaceX, told Ars that it's important for ESA and its LEO Cargo Return Service contractors to establish and understand requirements early and identify areas susceptible to cost overruns or delays. They should also focus on the steps needed to certify the European cargo vehicles to safely approach the International Space Station, he said.

But this shouldn't take two years—the duration of ESA's initial contracts with The Exploration Company and Thales Alenia Space, according to Tripathi. This "immediately conveys a lack of urgency and seriousness," he told Ars.

"In my estimation, having led this process twice, 2028 is an impossible goal for an ESA-funded cargo vehicle," Tripathi said. Something like 2030–2032 is more achievable, he said, if the companies have "the right technical DNA, and if ESA finds a way to squash European bureaucracy and subcontract fighting between countries."