It is official. France, Germany and Italy, the three largest contributors to the European Space Agency, have joined forces to compete with SpaceX. At a meeting this week, the ESA agreed to guarantee the future of the next-generation Ariane 6 and Vega-C rocket launchers.

According to Stars and Stripesthe deal follows months of bickering between Paris and Berlin over issues “including intellectual property rights, export licenses and the budget”.

The ESA is asking its member states to contribute €18.5 billion to fund space programs over the next three years – a significant increase of more than 25% over the previous funds.

The three countries are also proposing to allow the ESA to use European-made micro and mini launchers, which are currently being developed by Germany and France. The ESA previously used SpaceX to launch two science missions.

Will this benefit European start-ups in space technology?

Berlin will reportedly only support future projects from ArianeGroup (a joint venture of Airbus and Safran) provided programs are open to technology from European startups, people familiar with the plans said. It will be interesting to see how this will work out in practice.

Germany is traditionally the largest contributor to the ESA’s budget, with aerospace companies such as Airbus and OHB invested heavily in large-scale European space projects. Will this be enough to support startups and ensure their technology gets a share of the funding and opportunity?

Germany has its eyes on space

While it may not be the first country you think of when you think of space technology, the German space agency hosts the Innospace masters an annual competition for space technology start-ups.

With funders such as OHB and Mercedes-Benz Challenges, the competition is not just academic, with categories for ideas that are already in the innovation or integration phase with existing technologies, systems, services or solutions. This is great news if you want to market real products. And Germany has a number of startups with compelling use cases.

Zodiac sign uses microsatellites to monitor the Earth’s surface temperature and map water needs and availability for agriculture. This enables smart crop monitoring and sustainable resource management, enabling farmers to spot crop changes well before visible symptoms appear.

Likewise, LiveEO provides satellite-based monitoring of critical infrastructures such as power grids, pipelines and rail networks.

And there’s plenty going on in the space of rockets and R&D with startup HyImpulse Technologies development of a small European launch vehicle for small satellites. It uses hybrid rocket engines that burn solid paraffin using liquid oxygen. This reduces costs, making them safe, cheap and therefore suitable for rapid market entry.

We are at a time when many people are questioning the allocation of funds to less tangible forms of R&D in the face of current global challenges such as climate change and fuel shortages. The ESA funding may simply be a concerted effort to take power away from the space missions of Russia, China and North America. And that’s if you even think they can catch up to Space X. But whatever the underlying motivation, it will hopefully lead to space technology innovation by startups that will help improve life on Earth in the long run.