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On March 6, 2025, the Italian Chamber of Deputies approved the bill that, once approved, will allow Italy to have a space law for the regulation and development of the space economy (hereinafter, the “Space Bill“).
The adoption of the bill is proposed in the context of the so-called New Space Economy, an ecosystem focused on research, development and innovation in the space sector including through the involvement of private players. The potential of the New Space Economy is growing in the more traditional upstream sector (or Space Industry) – which involves the design, development and production of space infrastructures, such as satellites, launchers, space stations and future moon bases. However, innovation in the sector is driven primarily by the evolution of the downstream segment, which instead exploits the resources generated by space infrastructure, for example by processing and commercializing data collected by satellites for applications such as environmental monitoring, satellite navigation and telecommunications, also thanks to the creation of complementary terrestrial infrastructure (so-called midstream sector).
Among the fastest growing areas there is the application of satellite technologies for Earth observation, which benefits a broad category of sectors including logistics and transportation, precision agriculture, weather forecasting, and disaster management. The launch of new satellite constellations is also facilitating the expansion of satellite communications, making them increasingly accessible and efficient, with significant impacts for both civil and military uses.
The Space Economy Boom
In 2024, the space sector saw an annual growth of 11 percent, exceeding 470 billion by 2023. According to the World Economic Forum, by 2035 the space economy will reach a value of $1.8 trillion, with an average increase of 9 percent annually. Italy is the sixth largest country in the world in terms of space investment compared to GDP. In 2023, Italian investments reached 4.6 billion euros, thanks to national contributions, PNRR and participation in the Artemis program (NASA). The goal for 2026 is to reach 7.3 billion in investments, involving ESA, ASI, PNRR and European funds.
The Italian regulatory framework for space law
Italy’s proposed legislation, intended to impact mainly the upstream segment, regulates the space economy sector by first defining its scope: according to Article 3, the provisions apply to all space activities conducted domestically, as well as those conducted abroad by Italian operators. The space activities intended to be regulated by the Space Bill involve the following operations:
- Launch, release, on-orbit management, and reentry of space objects;
- Exploration, extraction and use of natural resources from space;
- Launch, flight, permanence of living things in space;
- Every other activity carried out on celestial bodies and in outer space (above 100 km above sea level), including suborbital flights, which are the new frontier for the commercial exploitation of space.
As for the subjective scope of the Space Bill, the bill defines “space operators” as natural or legal persons who intend to conduct space activities under their own responsibility. However, operations conducted by the Ministry of Defense and security agencies are excluded, thus ensuring regulatory and strategic autonomy for initiatives related to defense and national security.
Licenses and Permits
To operate in space, private companies must obtain a permit certifying that they meet specific requirements. These include objective criteria (Article 5), which relate to the safety, resilience and environmental sustainability of the individual operation, and subjective requirements (Article 6), which relate to the operator’s conduct, technical competence, financial soundness and the presence of adequate insurance coverage. The authorization system follows a mixed regime (Articles 4-10), applicable to both single missions and continuous operations, such as satellite constellation launches. The duration of the approval process is set by the Space Bill at 120 days, with no possibility of tacit approval. However, it is not necessary to obtain a new authorization if the space activity is carried out on the basis of an authorization issued by a foreign state, recognized by the Italian state under an international treaty.
Registration of Space Objects
According to Article 15 of the Space Bill, every space object launched from Italy must be registered in the National Registry. Operators are required to report essential information, including the launch state, name and orbital parameters, as well as the purpose and duration of the mission. They must also report any transfers of ownership or changes in management.
Controls and Penalties
The Italian Space Agency (ASI) is responsible for overseeing and regulating space activities, exercising powers to inspect, request documents and monitor operations. Penalties for noncompliance are severe: those who fail to comply with reporting requirements can face fines of between 150,000 and 500,000 euros, while operating without authorization can lead to imprisonment for 3 to 6 years.
Liability and Insurance
Among the most significant innovations proposed by the Space Bill is the update of the current liability regime, which international treaties recognize directly upon states that authorized space operations. The Space Bill, in fact, alongside the liability of states also envisage a strict liability upon individual space operators for damage caused to people and property on Earth, as well as to aircrafts in flight. However, the Space Bill does not go so far as to regulate the regime also for damage caused in outer space, which can then be recognized exclusively upon the launching states under the principle of fault-based liability defined by the 1972 Convention on International Liability for Damage Caused by Space Objects. The liability regime is also greatly impacted, including in terms of potential limitations on market access, by the introduction of mandatory insurance covering up to 100 million euros per damage claim (with possible reductions for innovative startups and research projects).
Incentives and New Opportunities
To support the growth of the New Space Economy, the Space Bill proposes to establish a National Plan for the Space Economy, aimed at promoting the conclusion of innovative partnership agreements between institutional stakeholders and private space operators, through strategic planning of resource allocation. The creation of a €35 million Space Economy Fund by 2025 is also planned to foster market development of space technology-based products and services, including by startups and SMEs. To further incentivize the presence of startups and SMEs in the space business market, the Space Bill reserves them a mandatory subcontracting quota of at least 10 percent.
Satellites and National Sovereignty
Article 25 introduces a reserve of national transmission capacity aimed at ensuring, in critical situations or when terrestrial networks are not available, the use of satellites and constellations in geostationary orbit, increasing diversification and ensuring national security. This measure aims to protect the strategic sector of satellite communications by entrusting the reserve of national transmission capacity exclusively to entities belonging to the EU or NATO, also to encourage the development of an autonomous satellite infrastructure and facilitate an adequate industrial return for Italy.
Article 26 intervenes on frequencies management, entrusting the Ministry of Enterprise and Made in Italy with the definition of criteria to limit interference between satellites and terrestrial networks, as well as the conducting of studies to harmonize criteria for the location of terrestrial gateways suitable for hosting multiple sites, minimizing aggregate interference. The issue has become particularly relevant after recent clashes between some leading satellite communications and telecommunications companies, highlighting the need for a clear regulatory framework to balance technological innovation and protection of national infrastructure.
Conclusion
With the proposed Italian Space Law, which is currently being analyzed by the Senate, Italy intends to strengthen its position in the New Space Economy by defining an organic framework for conducting of space activities. With growing investments, new business opportunities and incentives for SMEs and start-ups, some critical issues related to access by foreign companies to a strategic sector such as satellite communications, which are particularly relevant in an ever-changing geopolitical context, remain to be resolved.
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Authors: Marianna Riedo and Dorina Simaku
