Italy has finally taken a decisive step into the commercial space age with its new space economy legislation. A draft of the law has been presented to the Italian Parliament on September 10, 2024, the bill on "Provisions on Space Economy" (“Space Bill”) aims to create, for the first time, a clear legal pathway for private space operations in Italy. While this addresses a long-standing obligation under the 1967 Outer Space Treaty (“OST”), it also signals Italy's readiness to become a significant player in the growing commercial space sector. For operators looking to enter this market in Italy, the timing presents both opportunities and challenges that require careful consideration.

The Italian background compared to other countries

The explanatory report attached to the Space Bill clearly shows that, despite having ratified the main applicable international treaties, Italy still lacks a comprehensive and unified legal framework regulating space operations. In contrast, other countries like France, the United States, the United Kingdom, Belgium, and the Netherlands have already implemented specific national legislation for the space sector. According to Articles VI of the OST, States are responsible for "national space activities", including those conducted by private entities, and must ensure their authorization and supervision. However, these provisions leave it to national legal systems to define the criteria for application and regulation.

In this context, with the Space Bill, Italy has chosen to align with the leading countries active in the space sector by adopting a broad definition of "space activity" that includes all types of orbital operations.  In this respect, countries like United Kingdom, Japan, United States and Norway issue authorizations for individual space operations, France adopts general licenses with a ten-year duration, and in some cases, such as Ukraine and Australia, licenses can last up to twenty years.

Against this background, the Space Bill appears to be adopting an approach more similar to that of the United States, Japan, and Norway, requiring specific authorization for each space activity, while also providing broader authorizations for interconnected space activities and satellite constellation launches, where a single authorization may cover the entire operation. In this regard, with a view to speed up the procedure to carry out space activities, Article 4, paragraph 5 of the Space Bill provides that the authorization may be replaced by recognition of the authorization issued by a foreign State according to criteria equivalent to those laid down in the Space Bill.

Understanding the scope: who qualifies as a "Space Operator"?

The Space Bill introduces a broad definition of "space operator" that offers both flexibility and challenges. In particular, according to Article 1, paragraph 1, let. m) of the Space Bill "any natural or legal person who conducts, or intends to conduct, space activities under their responsibility" this definition creates opportunities for various business models while requiring careful consideration of regulatory compliance.

The complexity of modern space operations, often involving multiple entities in a single mission, demands particular attention to this definition. A typical orbital launch might involve launch service providers, satellite operators, payload managers, and ground segment operators working in concert. Each of these roles may fall differently within the regulatory framework, making early legal analysis crucial for successful operations. Understanding one's position within this framework and engaging early with regulatory authorities can help optimize operational structures and ensure compliance from the outset.

Navigating the liability framework

The strict liability regime provided by Article 18 of the Space Bill marks a pivotal yet complex development in the Italian space law landscape. The framework introduces a double-edged sword: while providing predictability through clear liability caps linked to insurance coverage, it also imposes stringent obligations that warrant careful scrutiny. The regime's structure allows for systematic risk assessment and management, though operators will need to navigate its requirements thoughtfully to avoid potential pitfalls.

A notable aspect of the framework is its asymmetric approach to liability scenarios. While terrestrial incidents are addressed with considerable detail, space-based activities remain surprisingly underdeveloped. This regulatory gap reflects a broader challenge in space law: the difficulty of balancing traditional liability concepts with the unique challenges of orbital operations. As the industry evolves toward more complex activities like orbital servicing and debris removal, this legislative oversight could become increasingly problematic.

The mandatory €100 million insurance requirement underscores this complexity. While higher than comparable jurisdictions – notably France’s national space law provides for a €60 million threshold – it raises questions about market accessibility and competitive dynamics. The threshold's impact may vary significantly across different types of space operations, potentially creating unintended barriers for certain market segments while providing adequate protection for others.

The law's emphasis on terrestrial impacts, while leaving space-based incidents less clearly regulated, reveals a potential disconnect between legislative intent and industry realities. As commercial space activities diversify beyond traditional launch and satellite operations, this terrestrial focus may prove increasingly inadequate.

This regulatory framework thus presents both structural challenges and areas for potential refinement. In this regard, industry engagement and policy activities with regulators may help shape future interpretations and amendments to the Space Bill, before its final approval by the Parliament. 

Authored by Marco Berliri, Giacomo Bertelli, and Alessandro Bacchilega.