Commission staff working document  - Impact Assessment - Accompanying document to the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions"Global Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space Component" {COM(2009) 589 final} {SEC(2009) 1439} {SEC(2009) 1441}
Date: 2009-10-28
Institutions: European Commission
Subjects: EU programme, access to information, environmental monitoring, fact-finding mission, financing, impact study, information processing, international cooperation, public safety, satellite communications, space research

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.10.2009 
SEC(2009) 1440 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying document to the  

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

"Global Monitoring for Environment and Security (GMES):  
Challenges and Next Steps for the Space Component" 

{COM(2009) 589 final} 
{SEC(2009) 1439} 
{SEC(2009) 1441} 

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This report commits only the Commission's services involved in its preparation and does not 
prejudge the final form of any decision to be taken by the Commission. 

IMPACT ASSESSMENT 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

7. 

Procedural issues and consultation of interested parties .............................................. 4 

Organisation and timing............................................................................................... 4 

Stakeholders consultation............................................................................................. 4 

Key issues regarding the GMES Space Component emerging from the stakeholders 
consultation .................................................................................................................. 5 

What is the challenge? ................................................................................................. 7 

Overall context and objectives ..................................................................................... 7 

Problem definition...................................................................................................... 11 

Does the EU have the right to act?............................................................................. 13 

Objectives................................................................................................................... 14 

General objectives...................................................................................................... 14 

Specific objectives ..................................................................................................... 14 

Consistency with other EU policies ........................................................................... 14 

Policy options............................................................................................................. 15 

Definition of the options ............................................................................................ 15 

Underlying assumptions............................................................................................. 16 

Analysis of impacts of options................................................................................... 20 

Assumptions concerning cost-benefit analysis .......................................................... 20 

Option 1: Baseline...................................................................................................... 24 

Option 2...................................................................................................................... 27 

Option 3...................................................................................................................... 31 

Comparing the options ............................................................................................... 34 

Monitoring and Evaluation ........................................................................................ 36 

Annex I GMES: observing the Planet for a safer world – a short description ......................... 37 

ANNEX II Reference studies and documents.......................................................................... 38 

ANNEX III Technical content of the ESA GSC programme and schedule of launches in the 

ESA Long term Scenario ........................................................................................... 40 

1. 

2. 

2.1. 

2.2. 

2.3. 

Introduction ................................................................................................................ 40 

User Requirements Process........................................................................................ 40 

Space Segment Overview (Sentinel-1 to -5) overview .............................................. 41 

Sentinel-4 and Sentinel-5 activities............................................................................ 42 

Ground segment activities.......................................................................................... 42 

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2.4. 

2.5. 

2.6. 

Data Access activities ................................................................................................ 44 

Pre-Operations............................................................................................................ 44 

Launch schedule......................................................................................................... 45 

Annex IV The PWC study – methodology and limitations ..................................................... 46 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

4. 

Context ....................................................................................................................... 46 

Methodology .............................................................................................................. 46 

Stakeholders engagement........................................................................................... 47 

Approach to benefits assessment ............................................................................... 48 

Indicators and tools for assigning value..................................................................... 50 

Key modelling assumptions and discount rate........................................................... 52 

Presentation of the results .......................................................................................... 52 

Limitations of the PWC benefits assessment ............................................................. 53 

ANNEX V LIST OF ABBREVIATIONS ............................................................................... 56 

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IMPACT ASSESSMENT  

1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Organisation and timing 

This  Impact  Assessment  accompanies  a  Commission  Communication  entitled  "Global 
Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space 
Component". A general description of GMES can be found in Annex I, a list of abbreviations 
is  contained  in  Annex  VI.  The  political  context  for  presenting  this  proposal  at  this  time  is 
explained below in section 2.1. 

The  Impact  Assessment  was  elaborated  in  consultation  with  a  Steering  group  to  which 
representatives of the following DGs were invited: ENV, BUDG, SG, RTD, AGRI, ESTAT, 
JRC,  RTD,  TAXUD,  DEV,  AIDCO,  ECHO,  INFSO,  TREN,  RELEX,  MARE,  REGIO  and 
JLS. The Steering group met twice1 and was consulted on the draft submitted herewith. 

The Impact Assessment was discussed by the Commission's Impact Assessment Board (IAB) 
on  9  September  2009.  In  the  discussion,  as  reflected  in  the  IAB  opinion  issued  on  11 
September  2009,  the  author  DG  agreed  to  indicate  more  explicitly  the  interactions  between 
GMES components; that costs and benefits depend on all components; to clarify the issues of 
ownership and funding of the Space and other components; to better explain the timing of the 
proposal; and to present more clearly the positions of stakeholders on the different IA options. 

As a consequence, the present Impact Assessment report has been modified as follows:  

–  Section 1.3 has been expanded to better reflect the positions of stakeholders with respect to 

the GSC financing, and has integrated the former Annex III; 

–  Section  2.1  has  been  integrated  with  a  chapter  on  the  policy  context  and  timing  of  the 
foreseen Communication and with an additional chapter justifying the focus on the Space 
component; 

–  At  the  beginning  of  section  4  and  in  chapter  5.1  it  has  been  made  clear  that  while  all 
options are centred on the Space component, costs and benefits depend more in general on 
variations  of  the  whole  GMES  system,  i.e.  on  variations  also  of  the  in  situ  and  services 
components; 

–  Section  4.2.3  on  data  and  information  policy  has  been  integrated  to  better  explain  the 

rationale behind full and open access; 

–  Section 4.2.4 on financing schemes has been modified to clarify that different co-financing 

options are open for the other GMES components; 

–  A specific section on ownership has been added (4.2.4.3). 

1.2. 

Stakeholders consultation 

•  This  Impact  Assessment  is  based  on  a  number  of  external  studies  (see  Annex  II)  and  a 
multiannual  consultation  process  of  stakeholders  which  has  been  organised  by  the 
European Commission's GMES Bureau2. This consultation process was launched with the 

1 
2 

On 15 July 2009 and 23 July 2009. 
The  GMES  Bureau  is  the  Commission's  focal  point  for  all  GMES  matters.  It  was  initially  created  in 
2006 with a mandate of three years. In 2009, the mandate has been extended until end 2010. From the 
administrative point of view, the Bureau is a Unit of DG Enterprise and Industry 

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Communication entitled “GMES: from concept to reality”3 and led to the adoption of the 
2008  Communication  entitled  "GMES:  we  care  for  a  safer  Planet"4.  Further  consultation 
was  performed  in  order  to  prepare  the  Commission  proposal  for  a  Regulation  on  the 
European  Earth  observation  programme  (GMES)  and  its  initial  operations  (2011-2013) 
(the "GMES proposal")5. This multiannual consultation process included: 

•  thematic workshops with users of Earth observation-based information services; 

•  the  establishment  of  'Implementation  Groups'  composed  of  user  representatives.  The 
Implementation Groups prepared recommendations concerning the scope, architecture and 
implementation  plans  for  each  thematic  area  in  the  service  component,  including  the 
necessary infrastructure requirements; 

•  the  consultation  of  national  GMES  coordinators,  appointed  by  their  respective  Member 
States,  in  the  framework  of  the  GMES  Advisory  Council,  an  expert  group  with  the 
mandate to provide strategic advice to the GMES Bureau, foster the co-ordination between 
European  and  national  activities,  and  facilitate  consensus-building  in  the  relevant 
communities around the development of GMES; 

•  regular  bilateral  meetings  between  the  European  Commission's  GMES  Bureau  and 

stakeholders from industry, regions and other players; and 

•  conferences6 dedicated to GMES by successive EU Presidencies. 

1.3. 

Key  issues  regarding  the  GMES  Space  Component  emerging  from  the 
stakeholders consultation 

The  stakeholder  consultation  referred  to  in  section  1.2.  has  clearly  demonstrated  that  users 
cannot  rely  on  research  projects  only.  They  need  access  to  reliable  and  accurate  data  and 
information  that  is  made  available  in  a  timely  fashion,  which  requires  a  sustainable  Earth 
observation infrastructure. 

Operational  information  services  depend  on  a  continuous  flow  of  inputs  from  the  GMES 
infrastructure  component.  The  present  analysis  focuses  on  the  GMES  Space  Component 
(GSC), i.e. Earth observation satellites producing data needed for GMES.  

The  GSC  depends  on  the  space  infrastructure  mission  lifecycle,  which  is  driven  by  service 
requirements  and  which  determines  the  roles  and  responsibilities  of  the  various  actors, 
funding sources and decision-making process. This lifecycle includes the following stages: 

•  development stage; and 
•  exploitation stage, which could include recurrent elements of an operational series7. 

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4 
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7 

COM (2005) 565 final of 10 November 2005 
COM(2008)748 final of 11.12.2008. 
COM(2009) 223 final of 20.5.2009. 
See  e.g.  the  conference  organised  by  the  Austrian  presidency  in  June  2006  “A  Market  for  GMES  in 
Europe and its regions - the Graz Dialogue”, the Munich conference "The Way to the European Earth 
Observation  System  GMES  -  Munich  Roadmap"  organised  by  the  German  presidency  in  April  2007, 
the “Bridging the Gap: Responding to environmental change - from words to deeds” conference, hosted 
by  the  Slovenian  presidency  in  Portoroz  in  May  2008,  the  GMES  Forum  organised  by  the  French 
presidency  in  Lille  in  September  2008,  and  the  conference  entitled  "Towards  eEnvironment"  which 
took place on 25-27 March 2009, in Prague. 
For instance, regarding the Sentinel missions, the recurrent units are defined as those units that follow 
after  the  completion  of  the  full  operational  capability.  In  addition,  it  is  essential  that  also  during  the 

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Stakeholders  agree  that  the  main  challenge  today  is  to  ensure  the  implementation  of  the 
second stage mentioned above. This is true for a major part of GSC missions, including the 
ESA Sentinels and most of the national missions in Europe. 

The current situation presents gaps and cannot guarantee the availability and continuity of the 
whole  GSC  mission  range  and  mission  lifecycle  described  above.  The  availability  of  GSC 
missions covering the second stage of lifecycle, i.e. exploitation including recurrent elements 
of operational series, should be specifically considered. This would imply organising different 
funding and associated procurement policies. 

In addition, stakeholders underlined the importance to: 

•  establish  operational  financing  sources  and 

the  associated 

industrial  policy  for 

infrastructure and data; 

•  ensure that the GSC corresponds to the requirements of the GMES services component; 

•  ensure a stable programmatic approach for the GMES mission lifecycle with special focus 

on a sustainable approach for recurrent elements of operational series; 

•  identify  how  the  GSC  can  benefit  from  existing  and  planned  national,  intergovernmental 
and  commercial  missions  and  how  GMES  can  generate  a  positive  impact  on  these 
missions; 

•  finalise content  and costing of  the GSC through overall consensus of the long-term GSC 

implementation plans to be coordinated by ESA; 

•  identify operating entities and specify their roles; 

•  establish decision-making processes for the GSC within the GMES overall governance. 

The  contributions  of  two  intergovernmental  organisations  –  the  European  Space  Agency 
(ESA)  and  the  European  Organisation  for  the  Exploitation  of  Meteorological  Satellites 
(EUMETSAT)  to  the  public  consultation  "Reforming  the  budget,  changing  Europe"8  are  of 
particular interest to highlight the position of their Member States, which include several EU 
Member  States.  ESA9  calls  for  a  "multi-annual  commitment  of  funding  to  establish  and 
sustain  spaced-based  infrastructure  and  services  for  which  the  EU  is  to  be  the  major  user. 
The  EU  should  consider  addressing  these  issues  in  its  future  budgets  and  the  rules  which 
govern expenditure. Potential actions could include establishing a dedicated budget line for 
necessary  operational  satellite-based  systems,  beginning  with  the  Global  Monitoring  for 
Environment and Security services, and rules relating to EU ownership of related assets." 

EUMETSAT recommended that the EU budget "plan for the co-existence of separate funding 
mechanisms  […]  covering  Research  and  Development  activities  on  the  one  hand  and 
operational activities on the other hand." 

At an Information Day organised in September 2009 with industry on the data policy of the 
GSC,  two  main  issues  were  raised  by  industry  stakeholders:  (i)  the  downstream  services 
industry welcomes the proposed free and open access to Sentinels data, which they expect to 
open  new  market  opportunities;  and  (ii)  the  existing  satellite  data  providers  have  a  more 
"wait-and-see" attitude as they see at the same time opportunities from "data buy" contracts to 

8 
9 

operational  stage  R&D  elements  are  implemented,  e.g.  for  the  development  of  the  next  generation 
Sentinels, which will incur the need for R&D funds. 
SEC(2007) 1188 final of 12.9.2007. 
ESA contribution is signed by the agency's Director-General, who has consulted ESA Member States in 
the ESA Council on it. 

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feed  GMES  services  and  threats  from  competition  between  their  data  and  Sentinel  data  in 
some limited domains. 

Member  States  representatives  in  the  GMES  Advisory  Council,  a  group  assisting  the 
Commission  in  the  development  of  GMES,  have  also  expressed  in  various  occasions  their 
support to the EU engagement in and financing of GMES Space component operations. For 
instance,  when  discussing  in  March  2009  the  preparation  of  the  proposal  for  a  GMES 
programme and its initial operations, Member States supported the establishment of a budget 
line  for  operating  satellites,  and  some  even  questioned  whether  the  potentially  available 
budget  would  be  sufficient.  The  ESA  representative  underlined,  in  that  occasion,  that  the 
Space  Agency's  Programme  Board  on  Earth  observation  delegates  "clearly  stated  that  they 
will  not  contribute  to  the  operation  of  the  Sentinels,  then  it  is  the  EC  responsibility,  as  it 
represents the users' communities, to find the necessary funding sources". This position was 
not  challenged  by  any  EU  Member  States'  delegates,  who  on  the  contrary  called  on  the 
Commission to make all efforts to fill the budget gap. Germany informed the Commission in 
writing  that  "Germany  will  continue  to  provide  active  support  to  the  European  Commission  in 
developing the programme and taking on responsibility for the long-term operation of GMES"10. 
A comparable position had already been expressed e.g. by Spain at the 198th meeting of the ESA 
Council on 15 February 2008 and France at the 203rd ESA Council of 15 October 2008.  

2. 

2.1. 

WHAT IS THE CHALLENGE? 

Overall context and objectives 

2.1.1.  Political context and timing of the proposed Communication 

GMES has been an EU initiative for more than 10 years. This initiative has been shaped under 
the current Commission mandate towards an EU Programme. In the last Communication on 
GMES, adopted in November 2008, the Commission presented: 

–  the need for an EU GMES Programme to be proposed already in 2009; 

–  the architecture (including the space, service and in-situ components) and governance that 

needs to be put in place; 

–  the method to estimate the financing needs of GMES. 

There  has  been  strong  political  support  for  the  approach  proposed  by  the  Commission  by 
Member States both at the EU Council and at the Councils of important stakeholders (ESA, 
EUMETSAT).  The  Competitiveness  Council  in  December  2008  invited  the  Commission  to 
implement quickly as from 2009 its Communication; the Space Council in May welcomed the 
Commission  proposal  for  the  GMES  Regulation.  The  ESA  Council  in  November  2008 
allocated additional funding to the development phase of the space component and invited the 
EU  to  complete  all  necessary  preparations  for  the  operations  and  replenishment  of  the 
developed  infrastructure.  The  Communication  was  thus  followed  by  a  proposal  for  a 
Regulation on the European Earth observation programme (GMES) and its initial operations 
(2011-2013). 

The  main  objective  of  the  foreseen  Communication  on  the  GMES  Space  Component  is  to 
present  the  position  of  the  Commission  vis-à-vis  the  political  expectation  of  EU  Member 
States and Member States of the main intergovernmental stakeholders. In particular, it aims at 

10 

See the letter from the German Infrastructure Ministry to H. Zourek dated 9 February 2009.  

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outlining the key actions to be taken in order to ensure a sustainable environmental data flow 
from space.  

Thus, without prejudice to the future decisions that will be taken by the Commission in the 
context of the preparation the financial framework post-2013, a Communication on the space 
component before the end of 2009 is necessary for the following main reasons: 

•  to  facilitate  the  negotiations  with  Council  and  Parliament  for  the  GMES  Programme 
Regulation,  that  needs  to  be  adopted  early  in  order  to  be  implemented  in  2011.  Member 
States have asked the Commission to put priority on the space component in the context of 
this  proposal.  Clarity  on  the  intention  for  the  long-term  arrangements  will  facilitate 
adopting arrangements on the short-term. 

•  to prepare the ground for an analysis of all components by the Commission for the period 
post-2013.  This  analysis  needs  to  be  performed  in  order  to  feed  the  discussions  and  the 
assessment of the priorities of the various Community programmes in the broader context 
of the definition of the next Multiannual framework.  

2.1.2.  Background 

In  the  last  thirty  years,  substantial  R&D  efforts  in  the  field  of  Earth  observation  have  been 
made by the EU, the European Space Agency (ESA) and their respective Member States, with 
a view to developing Earth observation infrastructure information services. These efforts led 
to  the  development  of  world-class  scientific  Earth  observation  satellites,  operational 
meteorological  satellites  managed  by  European  Organisation  for  the  Exploitation  of 
Meteorological Satellites (EUMETSAT)11 and operational imaging missions at national level 
(both civil and military). However, at European level no coherent for operating environmental 
satellites was in place. Without such an operational framework, it would be difficult for the 
EU  to  obtain  sufficient  information  on  the  state  of  the  environment  and  climate  change. 
GMES has been launched to respond to this need. 

2.1.3.  EU objectives 

The general EU objectives for GMES are to 

•  enable  sustainable  Earth  observation  information  services,  tailored  to  the  needs  of  users, 
including  public  policy  makers  and  private  citizens.  The  GMES  service  component  will 
allow public policy makers in particular to 

–  prepare  national,  European,  and  international  legislation  on  environmental 

matters, including climate change; 

–  monitor the implementation of this legislation; 

–  access comprehensive and accurate information concerning security matters (e.g. 

for border surveillance). 

•  ensure  the  continuous  availability  of  the  observation  infrastructure  necessary  for  the 
thematic  areas  in  the  GMES  service  component,  either  through  the  establishment  of 
partnerships with infrastructure owners, or through the development of new infrastructure 
in the event existing infrastructure is not sufficient to produce the data needed; 

•  give  a  boost  to  the  Earth  observation  sector  in  Europe,  by  creating  opportunities  for 
increased  private  sector  usage  of  Earth  observation-based  information  sources,  and  by 

11 

Like ESA, EUMETSAT is an intergovernmental organisation outside the EU framework.  

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facilitating market uptake by value-adding service providers, many of which are small and 
medium enterprises (SME). 

2.1.4.  Content of GMES 

As  outlined  in  Article  2  of  the  Commission  proposal  for  a  Regulation  of  the  European 
Parliament  and  the  Council  on  the  European  Earth  observation  programme  (GMES)  and  its 
initial operations (2011 – 2013)12, GMES consists of the following: 

(a) 

a  service  component  ensuring  access  to  information  covering  the  following 
thematic areas: 

– 

– 

– 

– 

– 

– 

land monitoring; 

emergency management; 

security; 

monitoring of the marine environment; 

atmosphere monitoring; 

climate change adaptation and mitigation; 

(b) 

(c) 

a  space  component  ensuring  sustainable  space-borne  observations  for  the 
thematic areas referred to in point (a); 

an  in  situ  component  ensuring  observations  through  airborne,  seaborne  and 
ground-based installations for the thematic areas referred to in point (a). 

2.1.5.  The focus on the Space component 

The  foreseen  Communication  should  be  seen  in  the  context  of  the  2008  Communication, 
which presented the full architecture of GMES and made clear that the Space developments 
are driven by the user needs. 

All  components  are  intrinsic  parts  of  the  GMES  architecture.  They  all  have  specific 
characteristics which need to be addressed. The infrastructure component generates data. The 
services  component  processes  these  data  in  order  to  produce  information  for  users.  The 
interactions  between  components  have  been  established  following  the  user  needs  definition 
process  and  the  result  is  implemented  in  each  component  of  GMES.  More  specifically,  the 
content of the space component depends on the needs of the services, which in turn have been 
derived from user needs. The space component is therefore not analysed in isolation. On the 
contrary, the zoom on the space component following the overarching analysis contained in 
the 2008 GMES Communication fully takes into consideration the other components.  

The foreseen Communication focuses on the space component where there is still an urgent 
need  to  define  a  more  concrete  basis  to  ensure  the  functioning  of  the  Sentinels,  notably  in 
view of the implementation of the proposed GMES Programme regulation currently under co-
decision.  

Regarding the in-situ and service components, work on the stabilisation of the cost estimates 
is ongoing. For the in-situ component, the 2008 Communication acknowledged that it mostly 
falls within the remit of Member States. According to the subsidiarity principle, Community 
action  for  this  component  should  focus  on  coordination  and  some  specific  limited 
infrastructure aspects, notably linked to global networks. For the services, the next step is to 

12 

COM(2009) 223 final of 20 May 2009 (the "GMES proposal"). 

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launch  the  process  for  reaching  a  common  vision  with  Member  States  on  the  basis  for  cost 
estimates for the services beyond the initial operations. 

In any case, long-term commitments on the space component by the EU would pave the way 
to ensuring the sustainability of the services, and overall coherence across components will be 
maintained in the programme proposal to be submitted for the period after 2013. 

2.1.6.  Timeline and financing 

GMES is a system of systems that relies on inputs from existing satellite constellations, in situ 
installations  and  service  infrastructure.  Different  components  or  sub-components  of  GMES 
could therefore enter into operation at different stages. The Commission thus used the concept 
of gradual implementation in the 2005 GMES Communication, starting with three fast-track 
services13,  and  later  the  term  "modular  approach"14.  From  a  governance  perspective,  three 
stages of GMES  can be  distinguished, namely  (i) pre-operational activities lasting up to the 
end of 2013, financed through FP5, FP6 and FP 7, (ii) GMES initial operations (2011 – 2013), 
to be financed on the basis of the regulation proposed by the Commission on 20 May 2009, 
and  (iii)  GMES  exploitation  post-2013,  which  will  continue  to  be  accompanied  by  research 
activities. 

Within FP 6, the EU has spent EUR 100 million on GMES projects, whereas ESA invested 
another EUR 100 million in the GMES Service Elements projects. In the space theme of the 
specific programme  "cooperation"  of  FP 7, the EU will make available approximately EUR 
430  million  for  GMES  information  service  projects  between  2007  and  2013.  Additionally, 
EUR 624 million from the space theme of FP 7 will be used to contribute to the development 
of  the  ESA  Space  component  programme15,  which  amounts  to  EUR  2246  million  (2008 
prices) in total, including funds contributed by ESA Member States16. 

First  information  services  in  the  field  of  emergency  management  and  land  monitoring  are 
being financed under preparatory actions in addition to some other operational elements in the 
land domain (Corine Land Cover, Urban Atlas). 

At  the  beginning  of  the  next  decade  (2011  –  2013),  services  could  be  provided  on  a  larger 
scale, in line with the GMES proposal. This proposal is intended not only to transform GMES 
from  a  political  initiative  into  a  coherent  programme,  but  also  to  ensure  the  financing  of 
services  and  the  GMES  space  component,  necessary  for  the  operation  of  GMES  during  the 
period 2011 - 2013. The Commission proposes that the overall financial envelope for GMES 
initial operations should be EUR 107 million, 40 million of which are to be dedicated to the 
operation  of  the  Space  component.  It  is  envisaged  that  this  financial  envelope  will  be 
complemented  by  an  amount  of  EUR  43  million  from  the  space  theme  of  the  Seventh 
Framework Programme for research actions accompanying GMES initial operations. 

13 

14 

15 
16 

See  the  Communication  entitled  “Global  Monitoring  for  Environment  and  Security  (GMES):  From 
Concept to Reality” COM(2005) 565 final of 10.11.2005 (the "2005 GMES Communication"), p. 7 – 8. 
See the Communication entitled Global Monitoring for Environment and Security (GMES): we care for 
a safer planet", COM(2008)748 final of 12.11.2008 (the "2008 GMES Communication"), p. 6, and the 
Commission  Staff  Working  Document  accompanying  the  Communication  "Global  Monitoring  for 
Environment and Security (GMES): we Care for a safer planet" - Impact Assessment, SEC(2008) 2808 
of 12.11.2008, p. 20. 
For more details, see section 2.2. below. 
See also the Commission Staff Working Document accompanying the proposal for a regulation of the 
European Parliament and the Council on the European Earth observation programme (GMES) and its 
initial operations (2011 – 2013), Impact Assessment and ex ante evaluation, SEC(2009)639 of 20 May 
2009, p. 2 (the "Impact Assessment accompanying the GMES proposal"). 

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Should  the  Regulation  be  adopted  by  Council  and  Parliament  without  significant  budget 
changes, the estimated overall amount made available to the GSC (including FP 7 funds for 
satellite development and funds for data access and Sentinel operations in the GMES initial 
operations envelope) would be around EUR 233 million in 2013. 

In  coherence  with  the  strategy  adopted  and  investments  made  so  far,  it  is  foreseen  that  the 
exploitation of GMES continues after 2013, on the basis of a Basic Act that will be proposed 
by  the  Commission  in  2011  at  the  latest,  as  part  of  the  preparation  of  the  next  multiannual 
financial framework. The detailed exploitation costs post-2013 will be analysed in the Impact 
Assessment  accompanying  the  proposal  for  such  Basic  Act.  With  regard  to  the  GSC,  in  its 
Resolution adopted at the 6th Space Council meeting17 of 29 May 2009, the Council recalled 
the  need  to  define,  at  national  and  European  levels,  a  sustainable  funding  approach  for  the 
GMES  Space  Component  based  on  an  assessment  of  the  overall  financing  needs  for  this 
infrastructure. 

2.2. 

Problem definition 

2.2.1.  The GMES Space Component 

As mentioned above, GMES services depend on the sustainability of the GMES infrastructure 
components,  in  particular  the  space  component.  Space  data  is  a  key  input  into  the  GMES 
service component. If the flow of space data is interrupted or comes to an end, for instance 
because  the  underlying  infrastructure  is  not  operational  any  more,  this  means  that  a  given 
service cannot be provided. 

The thematic areas within the GMES service component will rely both on access to data from 
existing  Earth  observation  satellites  owned  by  third  parties,  including  EU  Member  States, 
intergovernmental organisations such as ESA and EUMETSAT, non-EU countries and private 
entities  (hereinafter  referred  to  as  "data  access"18),  and  on  space  infrastructure  developed 
specifically  for  GMES.  Given  that  it  is  a  major  principle  of  GMES  that  the  Community 
should not duplicate existing capacities in Europe, the selection of the latter infrastructure was 
based on a detailed "gap analysis", in order to establish to what extent the user requirements 
compiled by the EU could not be met by existing or planned infrastructure. 

The result of this "gap analysis" led to the definition of the content of the ESA GMES Space 
component  programme  referred  to  above,  to  which  the  EU  contributes  financially.  This 
programme  aims  at  developing  a  number  of  satellite  missions  known  as  “the  Sentinels”,  as 
follows: 

•  Sentinel-1: high-resolution synthetic aperture radar (SAR) imaging, which can be used for 

imaging even in the case of cloud cover; 

•  Sentinel-2: high-resolution multispectral imaging; 

•  Sentinel-3: global ocean and land monitoring; 

•  Sentinel-4: geostationary atmospheric monitoring; 

17 

18 

The Space Council is a joint and concomitant meeting of the Council of the EU and the ESA Council 
meeting at ministerial level, in line with Article 8 of the Framework Agreement between the European 
Community and the European Space Agency, published in OJ L 261/66 of 6.8.2004. 
Existing  space  missions  that  will  provide  data  for  GMES  include  Spot,  TerraSAR-X,  EUMETSAT 
satellites, CosmoSkymed, DMC Deimos, Ikonos, GeoEye, and Quickbird. 

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•  Sentinel-5: low-orbit atmospheric monitoring19. 

The first constellations of Sentinels that are currently developed in the framework of the ESA 
GSC programme include the first two Units of Sentinel 1 to 3, the first two Units of Sentinel 4 
and  the  Sentinel  5  precursor,  i.e.  7  satellites  and  two  instruments  flown  onboard  of 
EUMETSAT satellites. These missions are necessary to fill gaps regarding space data needed 
for GMES services. The technical content of the Sentinels missions and the launch schedule 
are described in more detail in Annex IV. 

2.2.2.  What is the problem? 

The  ESA  GSC  programme  comprises  the  development  of  an  initial  constellation  of  the 
Sentinels, but not their exploitation once in orbit. Exploitation activities include the control of 
the  satellites  themselves,  of  the  instruments  onboard,  the  processing  of  observation  data 
collected  through  these  instruments  and  the  timely  distribution  of  data  to  GMES  users. 
Exploitation  activities  are  necessary  to  collect  the  environmental  data  that  will  serve  as  an 
input for the thematic areas within the GMES service component. The problem is therefore to 
manage and finance: 

•  the  exploitation  of  the  initial  constellations  of  Sentinels  developed  by  ESA  in  the 

framework of the ESA GSC programme, after the end of the development phase, and; 

•  the  renewal  of  the  Sentinels,  many  of  which  have  a  life  span  of  around  seven  years,  in 
parallel to the exploitation of the initial constellations of Sentinels, thereby paving the way 
for long-term continuity of data collection. 

The  financing  and  management  of  the  exploitation  of  the  Sentinels  has  been  discussed  in 
several  documents,  including  the  Commission  Communication  entitled  "Global  monitoring 
for Environment and Security (GMES): we care for a safer planet"20. As outlined in chapter 5 
of  this  Communication,  a  future  Community  Programme  should  contribute  to  the 
sustainability  of  the  space  infrastructure,  notably  to  the  in-orbit  availability  and  operations. 
Nevertheless, it was not possible to take any binding decisions concerning the financing of the 
exploitation  of  the  Sentinels  on  the  EU  side,  as  the  period  in  questions  goes  beyond  the 
current  financial  framework.  A  decision  on  the  financing  of  the  space  component  therefore 
needs to be prepared soon, in the context of the preparation of the next multiannual financial 
framework. 

ESA  Member  States  have  made  clear  that  the  Sentinel  infrastructure  represents  their 
contribution to the GMES Space Component and that their financial effort21 is made on  the 
assumption that EU will take over the responsibility for the exploitation and renewal across 
time  of  an  equivalent  infrastructure,  under  EU  funding.22  It  is  thus  unlikely  that,  in  the 
absence of EU commitment, an organisation other than the EU would assume responsibility 

19 

20 
21 
22 

See  V.  Liebig/J.  Aschbacher/S.  Briggs/G.  Kohlhammer/R.  Zobl,  GMES  -  Global  Monitoring  for 
Environment and Security: The Second European Flagship in Space, ESA Bulletin 130 (May 2007), 14 
– 15. 
COM (2008) 748 final of 12 November 2008 
See section 2.1.4. 
See  e.g.  the  minutes  of  the  198th  meeting  of  the  ESA  Council  on  15  February  2008,  p.  4,  and  the 
minutes of the 203rd meeting of the ESA Council on 15 and 16 October 2008, p. 6.  

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for  the  GSC  beyond  2013.  Consequently,  the  GMES  service  component  as  it  is  currently 
conceived could not exist23. 

2.3. 

Does the EU have the right to act? 

It  is  envisaged  that  the  legal  basis  for  operations  post-2013  will  continue  to  be  the  title  on 
Industry  in  the  EC  Treaty  (or  of  the  Treaty  on  the  functioning  of  the  EU,  once  ratified)24, 
which  does  not  establish  an  exclusive  competence  for  the  EU.  It  is  therefore  necessary  to 
ensure that the subsidiarity and proportionality principles are respected. 

2.3.1. 

Subsidiarity 

Subsidiarity means that the Community shall take action only if and in so far as the objectives 
of  the  proposed  action  cannot  be  sufficiently  achieved  by  the  Member  States  and  can 
therefore, by reason of the scale or effects of the proposed action, be better achieved by the 
Community. 

The  Community  contribution  to  the  exploitation  and  eventually  the  renewal  of  space 
infrastructure developed at European level is fully in line with the subsidiarity principle, for 
the following reason: 

Assuming responsibility for the exploitation and possibly the renewal of space infrastructure 
developed with Community and intergovernmental funds cannot be sufficiently achieved by 
the Member States because of the costs incurred. It is precisely for this reason that in the field 
of  space-based  observation  for  operational  meteorology,  European  States  have  pooled  their 
resources to develop and exploit meteorological satellites in the framework of the European 
Organisation  for  the  Exploitation  of  Meteorological  Satellites  (EUMETSAT).  European 
States  also  developed  demonstrators  of  environmental  satellites  either  through  ESA  or 
through  national  space  agencies.  They  could,  however,  not  find  a  way  to  co-operate  with 
regard  to  the  funding  of  sustained  operational  programmes  in  the  field  of  environmental 
monitoring  similar  to  those  in  meteorology.  However  the  need  for  continuing  such 
observations  is  becoming  critical,  in  consideration  of  the  increasing  political  pressure  for 
public authorities taking informed decisions in the field of environment, security and climate 
change. 

2.3.2.  Proportionality 

Any action by the Community shall not go beyond what is necessary to achieve the objectives 
of  the  EC  Treaty.  The  EU  action  under  consideration  in  this  document  relates  to  the 
exploitation and renewal across time of the Sentinel infrastructure. The data expected to flow 
out  of  this  infrastructure  is  of  common  public  interest  and  its  continuous  availability  is 
recognised  as  being  essential  in  the  field  of  environment,  security,  and  climate  change 
monitoring,  both  for  public  policies  and  for  boosting  the  development  of  downstream 
applications. As outlined in section 2.2.1, it is a major principle of GMES that the Community 
should not duplicate existing capacities in Europe. The selection of the Sentinel infrastructure 
was thus based on a detailed "gap analysis" to establish to what extent the user requirements 
compiled by the EU could not be met by existing or planned infrastructure. The scope of the 
Sentinel infrastructure currently under development is the result of an existing consensus, and 

23 

24 

See  also  recital  12  of  the  proposal  for  GMES  Regulation.  Although  it  would  be  possible  to  provide 
some  services  only  on  the  basis  of  in  situ  data,  or  data  from  missions  other  than  the  Sentinels,  such 
services would not be comparable any more to the thematic areas in the GMES service component. 
See  also  the  proposal  for  a  Regulation  of  the  European  Parliament  and  the  Council  on  the  European 
Earth observation programme (GMES) and its initial operations (201 – 2013), COM(2009)223 final of 
20.5.2009. 

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therefore  does  not  overlap  with  other  Space  infrastructure,  nor  does  it  crowd  out  private 
investment. Consequently, the financing of this space infrastructure does not go beyond what 
is  necessary  to  achieve  the  objectives  of  GMES  and  is  therefore  fully  in  line  with  the 
proportionality principle. 

3. 

OBJECTIVES 

3.1. 

General objectives  

The general objectives of the proposed Communication correspond to the EU objectives for 
GMES  itself,  as  outlined  in  section  2.1.  above,  without  pre-judging  future  decisions  to  be 
taken in the preparation of the next multiannual financial framework. 

3.2. 

Specific objectives 

The  specific  objectives  of  the  EU  actions  relating  to  the  GMES  space  component  (i.e.  the 
Sentinels) are to: 

•  ensure the continuous availability of environmental data collected through a set of space-
based sensors as an input for the thematic areas in the GMES service component; through: 

–  the continuous exploitation of the Sentinels and accompanying research activities through 

adequate governance and financing structures; 

–  the timely definition, development and procurement actions for renewing the Sentinels as 

necessary; 

•  stimulate, by lowering the costs of access to earth observation data, the growth of the Earth 
international 

innovation  and 

terms  of 

jobs, 

in 

Observation  downstream  sector 
competitiveness. 

3.3. 

Consistency with other EU policies 

GMES  is  the  second  flagship  programme  of  the  European  space  policy.  The  importance  of 
GMES  has  been  underlined  in  many  official  documents25.  Whereas  the  overall  GMES 
initiative,  including  its  service  component,  concerns  several  EU  policies,  including  climate 
change adaptation and mitigation, environment, transport, external relations, and development 
aid26, in the field of the GSC it is mainly the European Global Navigation Satellite Systems 
(GNSS) programmes (Galileo and EGNOS27) that are of relevance. This is because the GNSS 
programmes  are  the  only  other  space  infrastructure  programmes  managed  directly  by  the 
Community.  Lessons  learnt  from  other  major  infrastructure  programmes  to  which  the 
Community  contributes,  including  the  Single  European  Sky  ATM  Research  (SESAR) 
programme in the field of air traffic management, and ITER in the field of nuclear fusion, will 
be taken into consideration, where appropriate. 

25 

26 

27 

For an overview of these documents, see the Commission Staff Working Document accompanying the 
2008 Communication - Impact Assessment, SEC(2008) 2808 of 12.11.2008 (the "2008 GMES Impact 
Assessment"),  Annex  IV.  GMES  also  was  a  key  topic  of  the  orientations  adopted  at  the  6th  Space 
Council of 29 May 2009. 
For  an  overview  see  the  Commission  Staff  Working  Document  accompanying  the  proposal  for  a 
regulation of the European Parliament and the Council on the European Earth observation programme 
(GMES)  and  its  initial  operations  (2011  –  2013),  Impact  Assessment  and  ex  ante  evaluation, 
SEC(2009)639 of 20 May 2009 (the "Impact Assessment accompanying the GMES proposal"), section 
3.4 and Annex IV. 
the European Geostationary Navigation Overlay Service (EGNOS), a predecessor of Galileo 

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It should be underlined that major differences exist between Galileo and GMES. Technically 
speaking,  GMES  and  Galileo  cover  two  different  fields:  GMES  is  essentially  an  Earth 
observation programme, whereas Galileo is a satellite navigation programme. 

Nevertheless  it  is  of  paramount  importance  to  avoid  inconsistencies  between  Galileo  and 
GMES,  to  use  synergies  to  the  maximum  extent  possible,  and  to  take  into  consideration 
lessons learned from Galileo and EGNOS. In order to ensure coherence between Galileo and 
GMES, staff members of DG TREN and DG ENTR are in regular contacts at working level. 

4. 

POLICY OPTIONS 

It  has  been  recalled  that  GMES  comprises  a  services  component  and  an  infrastructure 
component, the latter comprising in turn in situ infrastructure and space infrastructure. 

As the scope of the current report only covers the space infrastructure, options are modulated 
on  the  GSC,  assuming  that  the  in  situ  and  services  components  are  adequate  and  do  not 
change in any of the options. 

4.1. 

Definition of the options 

The  policy  options  at  hand  to  address  the  objectives  as  defined  in  Chapter  3  above  are  as 
follows: 

•  Option 1: 

Option 1 corresponds to the baseline scenario. Under the baseline scenario, the EU would not 
assume responsibility for the exploitation of the Sentinels after GMES initial operations (2011 
– 2013). This means that the EU would not exploit the GSC at all beyond 2013. As outlined in 
section 4.2.4, it cannot be assumed that another entity would be willing to finance the totality 
of  the  Sentinel  exploitation  costs.  Consequently,  no  data  collected  through  the  Sentinels 
would be available for the thematic areas in the GMES service component. 

•  Option 2: 

Comprises  the  EU  financing  and  management  of  the  exploitation  only  of  the  first 
constellations of Sentinels, but not the renewal of the Sentinels28. The first constellations of 
Sentinels  are  currently  being  developed  in  the  framework  of  the  ESA  GSC  programme  and 
include the first two Units of Sentinel 1 to 3, the first two Units of Sentinel 4 and the Sentinel 
5 precursor, i.e. 7 satellites and two instruments flown onboard of EUMETSAT satellites. It is 
therefore  assumed  that  under  Option  2  no  data  from  Sentinels  will  be  available  beyond  the 
first constellation of Sentinels. 

•  Option 3: 

Comprises  the  EU  financing  and  management  of  (i)  the  exploitation  of  the  initial 
constellations  of  Sentinels,  and  (ii)  the  renewal  of  space  infrastructure  to  ensure  sustainable 
observation  over  time,  taking  into  consideration  that  most  of  the  units  of  the  Sentinels 
currently developed have a nominal lifetime of seven years and that the thematic areas in the 
GMES  service  component  rely  on  a  continuous  access  to  the  corresponding  data.  Decisions 
on the renewal will have to be taken in parallel to the exploitation of the initial constellations 
of Sentinels. 

28 

The  assumptions  concerning  financing  schemes  are  discussed  in  more  detail  in  section  4.2.2.  In 
particular, a PPP is not envisaged at this stage. 

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4.2. 

Underlying assumptions 

4.2.1.  Accompanying research activities 

In options 2 and 3, exploitation activities will be accompanied by research activities carried 
out  with  a  view  to  optimising  existing  technologies  and  preparing  new  generations  of  earth 
observation instruments of relevance for GMES. These R&D activities could be financed e.g. 
through the Community framework programmes for research, technological development and 
validation activities, and ESA programmes. 

4.2.2.  Data access activities 

Both  options  2  and  3  include  data  access  activities,  i.e.  access  to  data  from  existing  Earth 
observation satellites owned by third parties including EU Member States, intergovernmental 
organisations such as ESA and EUMETSAT, non-EU countries and private entities. It should 
be recalled that, without the Sentinels, access to data from third party missions is insufficient 
to meet service requirements29, even when coupled with in situ data. 

4.2.3.  Full and open access to GMES data and information 

The  objective  of  full  and  open  access  to  GMES  data  and  information  was  endorsed  by  the 
Commission in chapter 3 of the 2008 GMES Communication and is contained in Article 8 of 
the  GMES  proposal.  The  rationale  for  this  approach  was  already  outlined  in  the  Impact 
Assessment reports accompanying those documents. 

In  a  nutshell,  the  reason  why  GMES  data  and  information  should  be  fully  and  openly 
accessible is that full and open access will help to promote the widest possible use and sharing 
of data and information. Downstream service providers could use GMES information and data 
as an input to provide and market innovative services. Studies have identified the cost of data 
as a major obstacle to the development of this market and a barrier to entry30. This was also 
demonstrated  during  the  review  of  the  Directive  on  the  re-use  of  public  sector  information 
(the  PSI  Directive)31.  These  findings  have  been  confirmed  by  the  industry  stakeholders' 
consultation process, in particular at the 11 September 2009 Sentinel data policy information 
day. 

Generally  speaking,  the  GMES  Data  and  Information  policy  should  help  to  promote  the 
widest  possible  use  and  sharing  of  Earth  observation  data  and  information  in  line  with  the 
framework  for  the  dissemination  of  environmental  and  geospatial  information  (SEIS  and 
INSPIRE)32. Further, it is recalled that the Community has endorsed the principle of full and 
open  access  to  Earth  observation  data  when  it  adopted  the  Resolution  of  the  Third  Earth 
Observation  Summit  on  16  February  2005.  This  Resolution  includes  a  reference  to  the  10-
Year Implementation Plan of Earth Observation System of Systems (GEOSS), which contains 
the principle of full and open access. 

Additionally,  it  should  be  noted  that  beneficiaries  of  Community  funding  would  be  mostly 
public  authorities.  This  is  why,  at  least  in  an  initial  period,  it  seems  advisable  to  make 

29 
30 
31 

32 

See also section 2.2.1 
See e.g. ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 
Directive 2003/98/EC of the European Parliament and of the Council of 17 November 2003 on the re-
use of public sector information, OJ L 345/90 of 31.12.2003. Respondents to the public consultation in 
the framework of the review (available at 
http://ec.europa.eu/information_society/policy/psi/docs/pdfs/online_consultation/report_psi_online_con
sultaion_stakeholders.pdf) have signalled that the high prices charged for PSI may be limiting the 
economic development of particular sectors. 
See p 5 of the 2008 Communication. 

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available data fully and openly, especially considering the current small size of the sector. A 
full and open data policy also means that at least in the short and medium run, the provision of 
GMES  services  would  not  be  based  on  a  concession  or  Public  Private  Partnership  (PPP) 
scheme33. 

In  the  light  of  the  above  elements,  it  is  considered  disproportionate  to  analyse  alternative 
options  to  full  and  open  access,  given  that  this  issue  has  already  been  subject  to  various 
assessments  in  the  recent  past  and  that  the  policy  for  the  distribution  of  GMES  data  and 
information  has  been  agreed  upon  by  the  Commission.  The  Commission  will  however 
continue  to  explore  whether  the  development  of  market  opportunities  and  cost-based  user 
charges  could  eventually  allow  the  reduction  of  the  proportion  of  public  investment  in  the 
long run. 

4.2.4.  Financing schemes 

Without  prejudice  to  possible  co-financing  schemes  to  be  explored  for  the  other  GMES 
components, this section addresses the financing schemes available for the GSC. 

Under options 2 and 3, it is assumed that the Community funds and manages the totality of 
the costs relating to the exploitation of the initial constellation of Sentinels, and (for option 3 
only) the renewal of the Sentinels, under a data policy that is based on full and open access34. 
Nevertheless,  the  potential  financial  effort  that  it  will  be  possible  to  deploy  under  the 
Community  budget  is  not  yet  known,  as  priorities  and  allocations  of  the  new  multiannual 
financial framework (beyond 2013) will be established at a later stage. 

In  the  following  paragraphs  the  potential  for  co-financing  by  public  or  private  entities  is 
assessed. 

4.2.4.1.  Co-financing of the GSC by other public entities 

In theory, the Community could contribute to the costs of the renewal of Sentinels and/or the 
exploitation  of  the  initial  constellation  of  the  Sentinels  only  partly,  should  financing  from 
other entities in the public sector complement Community financing. 

It  is  assumed  that  the  exploitation  of  the  Sentinel  infrastructure  would  be  too  costly  for  a 
single  Member  State.  This  is  the  reason  why  the  EU  has  become  active  in  the  field  of 
operational Earth observation, in line with the principle of subsidiarity. 

Theoretically,  it  would  be  possible  that  a  group  of  Member  States  establishes  a  new 
intergovernmental  organisation  in  order  to  finance  the  exploitation  and  renewal  of  the 
Sentinels.  This,  however,  would  be  extremely  burdensome  (needing  the  creation  of  a  large 
management and technical team) and time consuming, as an international treaty would have 
to  be  concluded  by  the  Member  States  concerned35.  Further,  the  establishment  of  a  new 
intergovernmental agency would be in contradiction the European Space policy36, as it would 
result in the exploitation of a strategic infrastructure serving EU policy objectives in a non-EU 
framework 

Concerning  existing  intergovernmental  organisations,  ESA  Member  States  have  clearly 
indicated  that  they  expect  the  EU  to  take  responsibility  over  the  operation  of  the  ESA-

33 
34 
35 

36 

For a discussion of PPP, see section 4.2.4.2 below. 
See section 4.2.4. 
See  also  the  Impact  Assessment  accompanying  the  2008  Communication,  SEC(2008)  2808  of 
12.11.2008, p. 22. 
See  the  Resolution  of  21  May  2007  on  the  European  Space  Policy,  adopted  at  the  4th  Space  Council 
meeting, 2007/C 136/01. 

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developed infrastructure. In the past exploitation of space assets developed by ESA have been 
outsourced to other entities after the end of their development phase, such as Arianespace in 
the  field  of  launchers,  EUTELSAT  regarding  satellite  communications  and  EUMETSAT  in 
the field of operational meteorology. Up to now, ESA has thus focussed its activities rather on 
the development of major European space infrastructures, but not their exploitation. 

Generally speaking, a co-financing could be more costly than Community financing only, for 
the following reasons: 

•  First, past experience shows that it is of key importance to keep the governance framework 
as  simple  as  possible.  In  the  case  of  Galileo,  the  Commission  thus  underlined  the 
importance "to have a single Programme Manager on the side of the public sector that is 
accountable  for  the  entire  Galileo  programme,  that  has  management  and/or  contractual 
control  over  all  the  subordinate  implementation  levels,  that  has  access  to  both  financial 
resources  and  to  the  political  authorities,  and  that  can  provide  the  necessary  arbitrage 
between all elements of the programme. A split responsibility with different reporting and 
accountability  lines  will  cause  fractures  in  the  programme  and  have  structural,  negative 
impacts"37. 

•  The importance of robust programme management and a clear governance framework was 
also underlined by the Court of Auditors special report 07/2009 on the "management of the 
Galileo programme's development and validation phase" (the "Galileo Special Report"). In 
particular,  the  Court  of  Auditors  made  reference  to  the  importance  of  "setting  clear, 
realistic and acceptable objectives", of "defining appropriate strategies and instruments to 
pursue them", of "providing for risk management at the programme’s outset" and "taking 
timely decisions on all programme features"38. The more players are involved in decision-
making, the more difficult it is to fulfil these tasks. 

•  Further,  the  Galileo  Special  Report  states  that  the  tasks  of  supervising  complex 
technological activities can be seriously constrained by governance issues39, in particular if 
the role of the partners is not defined clearly40. 

•  A  co-financing  of  the  exploitation  and/or  renewal  of  the  Sentinels  by  different  public 
entities  would  mean  that  funds  come  from  different  sources.  Consequently,  different 
financial, accounting, control and procurement rules could apply to the management of the 
exploitation of the Sentinels. This could lead to a governance structure for GMES that is 
too complex and ultimately to higher costs, as has happened in the case of Galileo41. This 
rationale applies to a large extent independently of the actual percentage of contribution by 
other public players. Even a small contribution by a public entity other than the EU could 
mean  that  the  multiple  sets  of  financial  and  procurement  rules  could  apply  to  the 
management of the exploitation of the first constellation of the Sentinels. Additionally, the 
negotiation of agreements between different public funding entities will entail transaction 
costs  independently  of  the  level  of  contributions,  although  it  can  be  assumed  that  these 
costs would be negligible compared to overall costs. 

37 

38 
39 
40 
41 

See  Communication  from  the  Commission  to  the  European  Parliament  and  the  Council  -  Progressing 
Galileo: re-profiling the European GNSS Programmes, COM(2007) 534 final of 19.9.2007. 
See the Galileo Special Report, p. 36 – 37. 
See the Galileo Special Report, p. 27. 
See the Galileo Special Report, p. 33. 
Regarding the financing of instruments on satellites owned by third parties, specific solutions could be 
necessary. 

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4.2.4.2.  Co-financing of the GSC by the private sector 

It  could  also  be  theoretically  possible  that  a  Community  contribution  to  the  costs  of  the 
renewal  of  Sentinels  and/or  exploitation  of  the  initial  constellation  is  complemented  by 
financing from the private sector. A financial contribution of a private company to the costs of 
exploitation  and  renewal  of  the  Sentinels  could  only  be  expected  if  the  private  company  is 
allowed  to  develop  a  business  model  whereby  it  recoups  its  costs  through  user  fees.  Most 
likely the public side would co-operate with the private company in a concession-type PPP. 

A PPP for the exploitation and /or renewal of the Sentinel infrastructure would, however, face 
the following challenges: 

•  like  Galileo,  GMES  is  a  complex  high  tech  project  that  poses  higher  technological  risks 

than for instance the construction of a motorway; 

•  revenue generation is difficult to predict, especially in the presence of fragmented and non 

structured users' communities, as it is the case for Earth observation; 

•  as  in  the  case  of  Galileo,  a  concession  for  GMES  would  start  after  rather  than  before 
system  design.  The  concession  holder  would  thus  have  to  commit  itself  to  financing  and 
operating a system that had been conceived and handed over by the public sector42. 

For these reasons, it would be difficult for a private company to accept the transfer of market 
risk,  which  is  a  precondition  for  a  functioning  PPP.  Regarding  design  risk,  the  private 
company  would  need  an  assurance  that  the  design  (prepared  by  the  ESA  during  the 
development  phase)  "had  no 
in  a  faulty  or 
underperforming  system  (for  which  the  concession  holder  would  be  responsible  during 
operation)."43 It would be difficult to transfer this risk because of the technical complexity of 
GMES and the outputs expected of the concession holder during exploitation.  

inherent  problems 

that  might  result 

Additionally,  the  fact  that  data  would  sold  on  a  commercial  basis  would  deviate  from  the 
objective of full and open access and therefore strongly limit the use of GMES information 
and,  consequently,  the  related  benefits.  The  objective  of  full  and  open  access  to  GMES  has 
already  been  endorsed  by  the  Commission  in  the  2008  communication  and  the  GMES 
proposal. 

In  this  context,  it  should  be  underlined  that  the  development  of  downstream  services  is 
significantly  constrained  in  Europe  because  of  the  conditions  of  access  to  and  the  price  of 
Earth observation data44. If Sentinel data is sold at commercial prices, the risks remains that 
one  of  the  key  problems  that  GMES  is  supposed  to  tackle  would  remain  unsolved,  which 
would  mean  that  the  general  and  specific  EU  objectives  referred  to  in  sections  3.1  and  3.2. 
would not be met. 

Taking into consideration the lessons learnt from the Galileo PPP and the objective of full and 
open  access  to  GMES  data,  a  PPP  for  GMES  does  not  seem  to  be  a  viable  solution  for  the 
moment. In any event, the Commission will continue to explore whether the development of 
market opportunities and cost based user charges could eventually allow the reduction of the 
proportion of public investment in the long run. 

42 
43 
44 

See the Galileo Special Report, p. 24 – 25. 
See the Galileo Special Report, p. 25. 
See  ECORYS  Study  on  the  Competitiveness  of  the  GMES  Downstream  Sector,  executive  summary, 
page 11: "In terms of data input, this has been proven to be a major concern for service providers. They 
indicate that the costs are increasing, which could hamper profitability and innovation". 

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4.2.4.3.  Ownership of the GSC 

Ownership of the Space observation infrastructure confers exclusive rights and control over it 
and thus allows the owner to determine how a given space infrastructure should be used. In 
particular,  the  owner  has  the  right  to  determine  how  the  data  produced  by  an  Earth 
observation  infrastructure  is  collected  and  distributed.  This  is  of  key  importance,  as 
infrastructure  is  not  a  goal  in  itself,  but  an  instrument  to  produce  data  needed  for  the 
implementation of several EU policies. 

The owner also has some obligations, e.g. under EU environmental legislation or in the event 
the space object causes damage on the Earth or to another space object.  

As outlined above, it is currently not envisaged to implement the Space component of GMES 
as  a  PPP  in  the  short  to  medium  run.  Private  ownership  of  the  Sentinels  is  thus  a  purely 
hypothetical option, as no private entity would be willing to take over ownership. 

This means that, in practice, the question is whether ESA should remain owner (as it is the 
owner  of  the  Sentinels  which  it  develops  according  to  Article  IV  of  Annex  III  to  the  ESA 
Convention),  or  whether  ownership  should  be  transferred  to  the  EU,  normally  following 
launch and in-orbit validation. ).  

In  all  comparable  programmes,  the  EU  has  become  owner  of  the  infrastructure  it  develops. 
This is the case not only for Galileo45, but also for SESAR, ITER and several JTI, including 
ARTEMIS  (embedded  systems)  and  ENIAC  (nanoelectronics).  Finally,  it  should  be 
underlined  that  in  the  field  of  operational  meteorology,  EUMETSAT  owns  the  satellites, 
which are developed by ESA. 

As with Galileo, the transfer of ownership itself would not imply specific costs.  

Different options for ownership of assets in the other components will be analysed at a later 
stage.  

5. 

ANALYSIS OF IMPACTS OF OPTIONS 

Options have been analysed both qualitatively and quantitatively. For the quantitative part, a 
cost-benefit analysis has been performed based on available data. To this purpose, all figures 
have been expressed in 2009 prices. A discount rate of 4% in real terms was used to calculate 
Net Present Values (NPVs), in accordance to the Commission Impact Assessment Guidelines. 

A number of assumptions have been made that are set out below. 

5.1. 

Assumptions concerning cost-benefit analysis 

First  of  all,  due  to  the  nature  of  GMES  as  a  system  comprising  services  and  infrastructure 
components, it should be stressed that costs and benefits depend on the whole GMES system 
and not just on one of its components. More specifically, benefits depend on the availability 
of services, which in turn rely on the availability of adequate infrastructure (space and in situ). 
As  a  consequence,  variations  in  costs  and  benefits  are  driven  by  variations  in  all  GMES 
components. 

However, due to the limited scope of the present report to the space infrastructure component, 
it  is  assumed  that  in  all  options  in  situ  infrastructure  and  services  components  are  constant, 

45 

See Article 8 of the Regulation No 683/2008 of the European Parliament and of the Council of 9 July 
2008  on  the  further  implementation  of  the  European  satellite  navigation  programmes  (EGNOS  and 
Galileo), OJ L 196/1 of 24.7.2008. 

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both  in  terms  of  costs  and  benefits.  The  analysis  focuses  therefore  on  costs  and  benefits 
variations arising from variations in the space component. 

5.1.1.  Benefits 

Benefits  arising  from  GMES  have  been  quantified  in  the  study  entitled  "Socio-economic 
benefits  analysis  of  GMES"  by  PriceWaterhouseCoopers  (the  "PWC  study")  of  October 
200646.  The  PWC  study  monetises  and  expresses  in  present  value  terms  the  projected 
economic  benefits  (inclusive  of  societal,  environmental  and  other  economic  benefits)  with 
respect to a baseline scenario without GMES. 
The  PWC  study  results  have  been  used  in  the  present  Impact  Assessment47.  As  a 
consequence, the PWC study limitations apply. These are discussed in more detail in Annex 
V. It can be considered that the PWC assumptions for the "GMES full service scenario' and 
the  corresponding  assumptions  for  the  Space  component  are  in line  with  the  current  GMES 
thinking and with the Space component described in the ESA Long Term Scenario (see next 
section on costs). 

In the PWC study, GMES benefits have been grouped into three high-level categories, based 
on the different framework conditions necessary for the benefits to materialise in addition to 
the availability of the GMES services, which in turn depend on the continuous availability of 
the GSC: 

•  Category 1 benefits are efficiency benefits linked to the use of GMES-related information 
in  the  implementation  or  enforcement  of  legislation  or  policies  that  are  already  in  place. 
Continuous  availability  of  GMES  services  (and  hence  the  GSC)  is  needed  for  these 
benefits  to  materialise.  Therefore  they  are  supposed  to  start  from  2014  (and  even  before 
actually,  linked  to  the  implementation  of  GMES  initial  operations  in  2011-2013).  For 
instance, the quick availability of reference maps and damage maps in the context of the 
GMES  Emergency  Response  service  will  immediately  deliver  efficiency  benefits  within 
the existing mechanisms for civil protection in Europe. 

•  Category 2 benefits are linked to the availability of more and better information during the 
policy formulation stage. The result would be better policy making at European but also at 
national  and  regional  level,  easier  and  more  efficient  implementation  and  ultimately  an 
improved  delivery  of  policy  objectives.  For  instance,  the  Land  services  of  GMES  will 
provide information on land use and other land parameters all over Europe, plus detailed, 
higher  resolution  maps  of  urban  areas  (Urban  Atlas).  This  information  will  allow  better 
shaping and targeting, among others, of regional policies and better urban planning at local 
level. 
There  is  however  a  built-in  delay  between  the  availability  of  information  and  the 
materialisation of the benefits, linked to the policy cycle. As a consequence, these benefits 
are assumed not to materialise before 2012 and to grow progressively afterwards. 

•  Category  3  benefits  are,  as  in  category  2,  linked  to  the  availability  of  more  and  better 
information from GMES services during policy formulation, but this time at global level, 
i.e.  linked  to  the  signature  and  implementation  of  international  treaties  (e.g.  on  climate 
change, desertification, deforestation). As a consequence, there is a much bigger time delay 
before  they  materialise,  but  at  the  same  time  their  magnitude  once  the  treaties  are 
effectively implemented is much more important than in the other categories. An example 

46 
47 

Available at http://esamultimedia.esa.int/docs/GMES/261006_GMES_D10_final.pdf. 
The PWC study expresses results in 2005 prices. These have been converted to 2009 prices using a 2% 
constant inflation rate 

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of this category is the contribution that GMES will give to climate change-related policies, 
through long-term data series on several parameters (including sea surface temperature, sea 
level rise, CO2 distribution). 

Benefits are calculated not only for Europe, but also take into consideration the global level. 
This  concerns  in  particular  climate  change,  biodiversity,  deforestation  monitoring,  marine 
monitoring (including oils spills) and services in support of development aid48. 

The  PWC  study  is  based  on  conservative  estimates.  Whenever  stakeholders  or  secondary 
sources  suggested  a  range,  rather  than  an  absolute  number,  the  lower  end  was  retained.  A 
sensitivity analysis on these assumptions was also performed. For the period analysed (up to 
2030), with the use of higher-end range values as assumptions feeding into the GMES benefit 
assessment, the Present Value of projected benefits increases considerably from €34.7 billion 
to €70.9 billion. When Terminal Values are taken into account, projected economic benefits 
increase to €173.3 billion49. 

However, for the purpose of this Impact Assessment the conservative figures have been used. 
Corresponding benefits for the whole period up to 2030 are summarised in the figure below50. 

Source:  PWC  study,  Figure  7-2:  Summary  of  projected  economic  benefits:  GMES  'full 
service' scenario – Excludes Terminal Values 

The uneven profile of the benefits is due to the assumption, in the PWC study, that category 2 
and 3 benefits begin materialising at specific points in time. 

The PWC study also identifies significant socio-economic benefits without monetising them: 

•  Europe as a global partner (climate change mitigation, development and aid) 

48 
49 

50 

With a focus on Africa, see PWC study, p. 82. 
All figures of the sensitivity analysis are expressed in the PWC study as "present values, discounted to 
1/1/2006 at 4% real" 
PWC study, page 163. 

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•  preservation  and  management  of  natural  resources  (urban  and  rural  policy,  agriculture 

policy, water quality, management of wetlands) 

The  PWC  study  stresses51  that  GMES  offers  significant  strategic  and  political  benefits  for 
Europe. Although such benefits are inherently non-quantifiable they are a capital element of 
the GMES benefit case. They concern Europe’s leadership on global policy issues that have 
long term consequences for the quality of life and security of its citizens. 

In  addition  to  the  above,  it  should  be  stressed  that  the  PWC  study  does  not  quantify  some 
other  economic  and  social  benefits  generated  by  exploitation  and  renewal  of  the  Sentinels 
both  in  the  satellite  manufacturing  industry  and  the  Earth  observation  service  sector.  These 
could be called the "GMES economy" benefits, and are linked i.a. to creating and maintaining 
of a highly skilled workforce and to the innovative potential of Earth observation technologies 
and techniques, in particular for the switch to a low carbon economy. 

To  conclude,  it  can  be  said  that  quantification  of  benefits  in  the  present  assessment  is  very 
conservative.  When  comparing  the  options,  some  qualitative  elements  have  also  been 
provided concerning the categories of benefits outside the PWC study scope. 

5.1.2.  Costs 

As  the  PWC  study  benefits  refer  to  the  full  provision  of  GMES  services  rather  than  the 
implementation of the GSC only, the full costs of GMES services provision had to be taken 
into account for a cost/benefit comparison to make sense. 

In  the  quantitative  analysis  of  options,  therefore,  the  following  cost  categories  have  been 
factored in: 

•  Services  component  operation  costs,  derived  from  current  costs  in  the  FP7  projects 
preparing  pre-operational  services  and  projected  towards  steady-state  in  the  period  2014-
2030; 

•  Space component operation costs52. Regarding the latter, the costs of the ESA Long term 
Scenario are taken into consideration. These are taken from the European Space Agency's 
Long  Term  Scenario  (ESA  LTS),  a  cost  assessment  prepared  by  the  ESA  secretariat  and 
discussed  in  ESA  and  EUMETSAT  governance  structures53.  The  ESA  LTS  has  been 
recognised as a basis for costs estimations by the 6th Space Council54. The cost profiles are 
provided  below,  while  a  detailed  description  of  the  planned  launches  dates,  Sentinels 
characteristics and lifetime is presented in Annex IV. 

51 
52 
53 

54 

PWC study executive summary, page 1 
See also section 5.2.1.1. 
Costs are expressed in the ESA LTS in nominal prices, calculated with 2008 as a basis and using a fix 
2,3% annual inflation rate. For the present analysis, these costs have been converted to 2009 prices. 
Council Resolution on "The Contribution of space innovation and competitiveness in the context of the 
European Economic Recovery Plan, and further steps" – 10500/09 of 29 May 2009 

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GSC LTS - Funding for Operations/recurrent

700

600

500

400

300

200

100

0

s
e
u
l
a
v
l
a
n
m
o
n
 €,
n
o

i

i
l
l
i

M

2014

2015

2016

2017

2018

2019

2021

2022

2023

2024

2025

2026

2020

Year

Source: ESA Long-Term Scenario 

5.2. 

Option 1: Baseline 

Under the baseline scenario, the EU would not assume responsibility for the exploitation of 
the Sentinels after GMES initial operations (2011 – 2013). 

5.2.1.  Economic impact of Baseline 

The baseline would have an impact both on the satellite industry and service providers. As the 
baseline would not only entail the end of the EU involvement in the GSC, but also the end of 
the  GSC  itself,  important  know-how  in  the  European  satellite  industry  would  be  lost.  This 
would  also  mean  that  the  global  competitive  position  of  the  relevant  companies  will  be 
impaired. Additionally, research actions accompanying exploitation activities would become 
redundant, which would have negative consequences for innovation and the introduction and 
dissemination of  new  technologies.  These impacts would not only concern  the  large  system 
integrators,  but  also  SMEs  that  supply  components  and  sub-components.  The  baseline 
scenario  could  thus  lead  to  the  disintegration  of  industrial  teams,  loss  of  employment 
opportunities  in  a  high  tech  sector  and  a  negative  impact  on  the  growth  potential  of  the 
companies producing and operating Earth observation satellites. 
Without  EU  intervention  in  the  GSC55,  no  service  providers  could  become  active. 
Additionally,  providers  of  downstream  services  (i.e.  providers  that  use  the  GMES  service 
component financed or co-financed by the EU as an input for their own services) might not be 
able  to  offer  innovative  services  owing  to  the  lack  of  affordable  upstream  services.  This 
would mean that the multiplier effect of the EU investment in operational services would be 
forgone. This would also hamper innovation in the European Earth observation service sector. 
As the downstream sector is composed predominantly of SMEs56, which are essential for the 

55 

56 

Regarding  the  importance  of  public  intervention,  see  also  ECORYS  (2008),  Study  on  the 
Competitiveness of the GMES Downstream Sector, p. 82. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 88, and the 
impact Assessment accompanying the GMES proposal, p. 20 - 21 

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Lisbon  Growth  and  Jobs  Strategy57  the  lack  of  EU  action  would  be  particularly  detrimental 
for job creation and growth in the service sector. 

Additionally, the baseline would have an impact on public authorities at European, national, 
regional and local level. The provision of accurate Earth observation services allowing these 
authorities  to  prepare  and  implement  environmental  legislation  is  a  key  EU  objective  for 
GMES.  Without  the  GSC,  public  authorities  would  have  either  to  continue  their  activities 
without Earth observation-based information (with corresponding suboptimal results in cost-
effectiveness of their policies), or tender ad-hoc services (with corresponding duplications and 
higher  costs  for  data  access,  should  data  be  available,  or  sub-optimal  information  in  the 
absence  of  data).  This  could  ultimately  mean  that  policy  formulation  and  implementation 
becomes less efficient and therefore more costly for tax payers. 

The baseline would have a serious impact in the field of international relations. First GMES is 
the major contribution to the Global Earth Observation System of Systems (GEOSS)58. If the 
EU did not move forward with operational GMES services before 2014, this would limit its 
credibility within the Group on Earth Observation (GEO). The same  is  true  for  the  "GMES 
and Africa" partnership. It should be reiterated that in the field of Earth observation, the EU 
will only be a credible partner for developing countries if GMES delivers operational services 
in addition to existing research projects. The GSC is a prerequisite for this. 

5.2.2.  Environmental impact of Baseline 

As  environmental  monitoring  is  the  "raison  d'être"  of  GMES,  the  baseline  scenario  would 
mean  that  that  the  EU  objectives  for  GMES cannot  be  fulfilled.  Without  implementation  of 
the GSC, the GMES service component cannot exist. Consequently, the EU would not have 
access to an autonomous capacity to monitor climate change. 

In  particular,  land  monitoring  services  are  important  for  monitoring  of  biodiversity  and 
ecosystems, climate change mitigation and adaptation and the management of a wide range of 
resources  and  policies,  most  of  which  relate  to  the  natural  environment:  soil,  water, 
agriculture,  forests,  energy  and  utilities,  built-up  areas,  recreational  facilities,  infrastructure 
and transport59. Although authorities at European, national, regional and local level (including 
environmental  agencies)  to  some  extent  already  use  pre-operational  or  operational  Earth 
observation  services,  two  cross-cutting  issues  remain.  First,  existing  pan-European  services 
(e.g. the Corine Land Cover service) do not meet all the requirements of users. Secondly, the 
sustainability of existing services is not ensured, not only in the case of services provided in 
the  framework  of  research  projects  but  also  in  general  as  existing  data  flows  will  not  be 
available  anymore,  for  instance  after  the  end  of  Envisat60  lifetime).  Without  GSC,  land 
monitoring services in Europe would thus remain at best fragmented, and in the some cases 
cease to exist in the absence of input data. 

For emergency response, the baseline would mean (i) that the prevention of risks relating to 
natural disasters (including forest fires and floods) would continue to be difficult owing to the 
lack  of  precise  risk  mapping  services,  and  that  (ii)  the  response  to  natural  disasters  would 
have to rely on rather imprecise maps. 

57 

58 
59 
60 

See p 1 of the Communication Think Small First” - A “Small Business Act” for Europe, COM(2008) 
394 final of 19.6.2008. 
See also p 5 of the 2008 Communication. 
See recital 11 of the GMES proposal. 
Envisat  is  an  advanced polar-orbiting  Earth observation  satellite  which provides  measurements  of  the 
atmosphere,  ocean,  land,  and  ice.  It  was  launched  in  2002  and  is  planned  to  be  operated  until  the 
beginning of the next decade. 

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GMES  Services  in  the  atmosphere  thematic  area  are  of  key  importance  for  monitoring  air 
quality,  greenhouse  gases,  and  ozone.  The  service  in  the  area  of  monitoring  of  the  marine 
environment would allow better oil spill prevention, marine resources management, seasonal 
forecast, ice surveys and water quality monitoring. Without the GSC, the provision of these 
services  will  continue  to  be  difficult.  Although  services  already  exist  in  this  field,  as  in  the 
field  of  land  monitoring  the  problem  is  that  these  existing  services  do  not  meet  all  user 
requirements and cannot be provided beyond the lifetime of existing satellites. 

5.2.3. 

Social impacts of Baseline 

Without the implementation of the GSC, it can be expected that the full potential for growth 
and  job  creation  will  be  exploited  neither  in  the  satellite  manufacturing  industry  nor  in  the 
service sector. 

Satellites manufacturing industry in Europe employs approximately 30.000 FTE, with a clear 
concentration in large installations (the 30 largest units employ 80% of the workforce). Earth 
observation  (EO)  covers  a  share  of  approximately  15%  of  the  total  sales61.  In  the  baseline 
option, part of these jobs would be at risk, as the sector is highly dependent on public demand 
and long-term programming. As the jobs at stake are high-skills ones, a brain drain towards 
the US or emerging space powers would be likely. 

Concerning the downstream sector, EO is today the smallest of the three value adding space 
segments  (navigation,  satellite  communication  and  EO)  in  absolute  numbers.  The  sector  is 
made up of some 150 companies in Europe and Canada, with an average of 20 staff employed 
and  a  turnover  of  2  million  €  per  company.  Total  employment  in  the  sector  is  estimated  to 
have risen from 2,900 employees in 2002 to 3,000 in 2006. 

Under the baseline scenario, existing players in the downstream sector might either leave the 
market  or  reduce  their  activities  in  the  field  of  Earth  observation.  This  is  because  the 
development  of  downstream  services  is  dependent  on  reducing  the  current  uncertainty  over 
the conditions of access, price and data policy for GMES data and the real content of services 
output, which has to date represented an important constraint on investments62. 

5.2.4.  Cost-benefit assessment of the Baseline 

In  the  baseline  scenario,  even  in  the  absence  of  exploitation  or  renewal  costs  for  the  space 
infrastructure, there would be costs linked to the storage of about 2 to 3 million Euros per year 
of the already developed satellites listed in section 2.2.1 (see graphs below63). In the absence 
of  the  necessary  data,  no  costs  will  be  incurred  to  operate  the  GMES  service  component, 
which will simply not exist. 

On the benefits side, it is reasonable to assume that no benefits at all will materialise, as the 
baseline  is  equivalent  to  the  PWC  study  scenario  "without  GMES".  Moreover,  no  strategic 
and  political  GMES  benefits,  nor  "GMES  economy"-related  benefits  will  materialise.  As  a 
result, the (small) costs will exceed the benefits and net benefits will be negative throughout 
the period. 

61 
62 
63 

Source: ASD-EUROSPACE facts & figures, 13th edition, June 2009 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 
The second graph shows the cumulative net present value (in 2009) of a stream of payments starting in 
2014 and ending in year X, where X can take on any value between 2014 and 2030 

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 €

n
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Option 1 (baseline)
Annual Cost/Benefit in present values

Total Costs per year (2009 Present Value)

Total benefits per year (2009 Present Value)

2014

2015

2016

2017

2018

2019

2020

2021

2022
Year

2023

2024

2025

2026

2027

2028

2029

2030

Option 1 (baseline)
Cumulative Net benefits (Present Value 2009 up to year X)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

3,0 

2,5 

2,0 

1,5 

1,0 

0,5 

-

-

-5,0 

-10,0 

-15,0 

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-20,0 

-25,0 

-30,0 

5.3. 

Option 2 

Year

In  Option  2,  it  is  assumed  that  the  exploitation  of  the  first  constellation  of  Sentinels  is 
financed by the Community, but not their renewal. 

5.3.1.  Economic impact of Option 2 

The Community financing of the GSC and GMES services would have a positive impact on 
the  competitiveness  of  EU  firms  in  comparison  with  non-EU  competitors,  as  the  private 

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€
 
sector,  including  downstream  companies,  would  have  planning  certainty  concerning  the 
availability of GMES services64. This is essential for SMEs, which form the backbone of the 
Earth  observation  industry  in  Europe65.  Nevertheless  this  positive  impact  would  not  be 
maintained if the Sentinels were not renewed. In other words, option 2 would only constitute a 
temporary solution. 

Further,  the  positive  impact  of  innovations  in  the  downstream  sector,  which  depends  on  a 
flow  of  data  at  reasonable  conditions66  and  which  would  significantly  contribute  to  job 
creation  in  a  high  tech  sector  of  strategic  importance,  would  be  limited  to  the  first 
constellation  of  Sentinels  and  would  thus  be  in  contradiction  with  the  goal  of  establishing 
sustainable capacities in Europe. 

Finally, EU financing of operational services would constitute a political message also for the 
external relations of the EU, and would reinforce the credibility of the EU as a partner in the 
GEOSS  and  the  strategic  EU-Africa  partnership.  This  positive  impact  would  be  impaired  if 
the Sentinels were not operated on a continuous basis67. 

5.3.2.  Environmental impact of Option 2 

As long as the Sentinels are orbiting and providing their data, positive environmental impacts 
will  occur  owing  to  better  information  on  the  Earth's  environment  made  available  to  policy 
makers. It could be assumed that these impacts are present for a short time after the stop of the 
data  flow  once  Sentinels  progressively  end  their  life68,  as  policies  are  implemented  and 
achieve their objectives. 

However,  it  can  be  assumed  that  very  limited  impacts,  if  any,  will  be  made  on  long-term 
environmental policies depending on long-time data series, the most prominent example being 
climate  change  policies.  As  a  consequence,  the  benefits  which  constitute  the  bulk  of  the 
quantified  benefits  in  the  PWC  study  –  and  an  important  part  of  the  strategic  and  political 
benefits  –  will  not  materialise.  This  concerns,  in  particular,  the  long-term  monitoring  of 
climate change. 

5.3.3. 

Social impact of Option 2 

The  PWC  study  did  not  quantify  the  positive  impact  of  the  GSC  on  the  European  Earth 
observation sector in terms of growth and job creation. However, it is possible to derive some 
data  from  a  study  on  the  competitiveness  of  the  GMES  downstream  sector  performed  by 
ECORYS  for  the  European  Commission  in  November  2008.  The  study  explains  that  "the 
public sector has an important influence on the [EO downstream] sector, not only because it 
sets the legal and regulatory framework for the sector, but also because it has a large influence 
as a client, by funding the development of the sector and by shaping policies that influence 
market  demand  for  EO  services.  […]  In  terms  of  data  input,  this  has  been  proven  to  be  a 
major concern for service providers. They indicate that the costs are increasing, which could 
hamper profitability and innovation". The exploitation of Sentinels and the provision of data 
and sustainable information services with full and open access will be the basis for innovative 
value  added  services  in  Europe,  which  could  reverse  the  trend  of  very  slow  growth  in 

64 

65 
66 
67 
68 

See, in particular, ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 
812. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 93. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 
See also section 4.2.5. 
For detailed schedules, see Annex IV, section 2.6. 

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28 

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employment in this key high tech sector69. In option 2, however, this positive impact would be 
negligible,  as  the  industry  stakeholders'  consultation  has  demonstrated  that  certainty  over  a 
long timeframe is a pre-requisite for the creation of new business models, as well as for the 
stabilisation of existing ones. 

Concerning the satellite manufacturing industry jobs, they would be temporarily preserved as 
compared to the baseline, but for a limited period of time and without a stable perspective. 

5.3.4.  Cost-benefit analysis of option 2 

In Option 2, it is assumed that the full palette of GMES services will be made available until 
2020,  i.e.  in  the  period  when  all  Sentinels  are  operating  and  delivering  the  necessary  space 
data. 100% of the identified benefits will therefore materialise in the period 2014-2020. 

Between  2020  and  2022,  in  the  absence  of  Sentinel  5  after  the  lifetime  of  its  precursor, 
atmosphere  data  would  be  limited  not  only  in  terms  of  parameters  but  also  in  terms  of 
geographic coverage70. As a consequence, very limited atmosphere-related services could be 
delivered, owing to data access to other missions71. 
As of 2023, only Sentinel 4 would be operational72. With the sole flow of data coming from 
this satellite, it would be impossible to have any of the GMES services provided with a scope 
foreseen  today.  In  particular,  Sentinel  4  is  one  of  the  satellites  necessary  for  delivering  the 
GMES Atmosphere service, the other one being Sentinel 5. 

Assumptions on benefits are therefore as follows: 

•  From 2014 to 2020 100% of the benefits calculated by PWC materialise; 

•  From  2020  to  2022,  benefits  have  been  reduced  proportionally  to  the  limited  scope  of 

available atmosphere services: 

–  Efficiency  benefits are not quantified for single services in the PWC study. It is 
therefore difficult to estimate the reduction corresponding to a limited scope of the 
atmosphere  service.  Assuming  that  these  benefits  are  distributed  equally  among 
the  four  services  (land,  marine,  atmosphere,  emergency),  87.5%  of  the  total 
category  1  benefits  has  been  accounted  for  in  the  period  considered.  This 
corresponds  to  the  share  of  the  three  non-atmosphere  services,  plus  half  of  the 
atmosphere service share; 

–  as  concerns  category  2  benefits,  the  PWC  study  identifies  1.6  billion  €  per 
annum73 related to air quality services, out of a total of 2.9 billion € per annum74. 
However,  as  benefits  are  linked  to  improved  modelling  capabilities  through 
combining environmental and health related inputs, it is assumed that no category 

69 

70 

71 

72 
73 
74 

Although  nominal  revenues  of  the  downstream  sector  have  increased  by  around  2%  per  annum  on 
average between 2002 and 2006, employment evolved at a lower pace, slightly under 1%, see ECORYS 
(2008),  Study  on  the  Competitiveness  of  the  GMES  Downstream  Sector,  p.23.  See  also  the  Impact 
Assessment accompanying the GMES proposal, p. 30. 
Sentinel  4  is  a  geostationary  satellite,  orbiting  in  phase  with  the  Earth  and  therefore  'viewing'  only  a 
portion  of  it,  like  it  is  the  case  for  meteorological  satellites  (e.  g.  the  geostationary  METEOSAT 
satellites, viewing mainly Europe and northern Africa. 
The problem is particularly severe in this configuration. While today, in the absence of Sentinels, it is 
possible  to  acquire  data  for  pre-operational  atmosphere  services  from  the  experimental  ENVISAT 
satellite developed by ESA, the latter will not available anymore in 2023. 
The last year of Sentinel 3B in 2023 does not make a difference for the present analysis. 
In 2025, nominal undiscounted terms 
In 2030, nominal undiscounted terms 

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2  benefits  will  materialise  as  soon  as  Sentinel  5  data  flows  stop.  As  a 
consequence,  it  is  assumed  that  only  half  of  category  2  benefits  will  materialise 
between 2020 and 2022 (coming from non-atmosphere services); 

–  Category 3 benefits are not present yet. 

•  From 2023 to 2030: 

–  the same assumption as for 2020-2022 have been made for category 1 benefits; 

–  no category 2 benefits have been accounted for; 

–  no category 3 benefits have been accounted for, as it is assumed that the relevant 
data  series  generated  until  2022  would  not  be  sufficient  to  generate  them  in  the 
following years, and data discontinuity is a major obstacle in the climate domain. 

In  Option  2,  only  the  following  space  component  costs  have  been  extracted  from  the  ESA 
LTS75: 

•  operation  costs  of  Sentinel  1A,  Sentinel  1B,  Sentinel  2A,  Sentinel  2B,  Sentinel  3A, 

Sentinel 3B, Sentinel 4A, Sentinel 4B, Sentinel 5 precursor; 

•  access to contributing missions (still necessary for service provision); 

•  operation of the ground segment. 

In addition, services operation costs have been taken into account, but limited to the services 
that can effectively be made available each year depending on the available satellites. 
The results of the cost-benefit analysis are summarised in the graphs below76. The total cost 
profile decreases sharply after 2022, as gradually Sentinels end their nominal life. In parallel, 
while most of the benefits materialise in the first period, no longer-term benefits are enabled 
and  as  of  2023  costs  approximately  equal  benefits.  Net  present  value  remains  positive 
throughout the period, with an increasing profile up to 2022 and then stabilising. 

From the point of view of the possible Community contribution, this option would require an 
important  rise  in  terms  of  budgets,  even  if  the  increase  in  non-research  appropriations 
allocated  to  the  GMES  successor  programme  would  be  partly  compensated  by  a 
corresponding  decrease  in  the  allocations  provided  by  the  next  research  framework 
programme. 

75 
76 

For an overview of missions up to 2030, see section 5.2.5. 
See footnote on the graphs for the baseline option. In this case, benefits are also taken into account. 

EN 

30 

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 €

n
o

i
l
l
i

M

Option 2
Annual Cost/Benefit in present values

Total Costs per year (2009 Present Value)

Total benefits per year (2009 Present Value)

1.000,0 

900,0 

800,0 

700,0 

600,0 

500,0 

400,0 

300,0 

200,0 

100,0 

-

2014

2015

2016

2017

2018

2019

2020

2021

2022
Year

2023

2024

2025

2026

2027

2028

2029

2030

Option 2
Cumulative Net benefits (Present Value 2009 up to year X)

Million €

7.000,0 

6.000,0 

5.000,0 

4.000,0 

3.000,0 

2.000,0 

1.000,0 

-

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year

5.4. 

Option 3 

Option  3  is  based  on  the  assumption  that  financing  not  only  of  the  exploitation  of  the  first 
constellations of Sentinels, but also their renewal is secured by the Community. 

5.4.1.  Economic impact of Option 3 

The  full  set  of  socio-economic  benefits  identified  in  the  PWC  study  will  apply  in  option  3, 
including those related to long-term actions and impacts (category 3 benefits). Moreover, the 
strategic, political and "GMES economy-related" impacts are expected to materialise as well. 

EN 

31 

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In particular, the positive impact of the Community financing of the GSC and GMES services 
on  the  competitiveness  of  EU  firms  in  comparison  with  non-EU  competitors  could  be 
maintained  in  the  long  run.  This  would  increase  the  planning  certainty  of  the  private  sector 
concerning  the availability of GMES services77. This  is essential for SMEs, which  form the 
backbone of the Earth observation industry in Europe78. 

Further, the making available of data and information produced by services that are supported 
financially by the Community according to the principle of full and open access could most 
likely  lead  to  innovations  in  the  downstream  sector,  which  depends  on  a  flow  of  data  at 
reasonable conditions79. This, in turn, would significantly contribute to job creation in a high 
tech sector of strategic importance. 

Finally, the commitment to finance not only of the exploitation, but  also the renewal of the 
Sentinels  would  reinforce  the  credibility  of  the  EU  as  a  partner  in  the  GEOSS  and  the 
strategic EU-Africa partnership much more than in option 2. 

5.4.2.  Environmental impact of option 3 

Under  Option  3,  the  full  set  of  socio-economic  benefits  identified  in  the  PWC  study  will 
apply,  including  those  related  to  long-term  actions  and  impacts  (category  3  benefits).  This 
concerns in particular the positive impacts on climate change-related actions, and constitutes 
the  bulk  of  environmental  impacts  both  in  quantitative  terms  (see  cost-benefits  analysis 
below) and in political terms: the EU would have at its disposal strategic information on the 
pace  of  climate  change  to  support  its  leader  role  in  the  negotiation  of  international  treaties, 
such  as  the  global  convention  on  desertification,  a  new  Treaty  on  de-forestation  or  a  future 
Treaty for climate change mitigation. 

5.4.3. 

Social impact of option 3 

The  social  impact  of  option  3  largely  corresponds  to  option  2,  with  the  difference  that  this 
impact would be more sustainable in option 3. 

Concerning the satellite manufacturing industry, it can be expected that under option 3 new 
jobs would be created and maintained, increasing demand of highly skilled staff. 

Regarding  the  service  sector,  given  that  half  of  the  companies  active  in  the  downstream 
market are small companies employing less than 10 persons80, the sustained social impact of 
option 3 would be of particular relevance for SMEs. Additionally, the availability of Sentinel 
data could be instrumental in reducing the disparities between Member States in the field of 
Earth observation. This is because downstream services market development, in particular in 
countries with a weaker industrial base, will most likely accelerate only with the full and open 
access to inputs from an operational GMES capacity. 

5.4.4.  Cost-benefit analysis of option 3 

As outlined in section 4.2.5, the PWC study monetises and expresses in present value terms 
the projected benefits (inclusive of societal, environmental and other economic benefits) with 
compared to a baseline scenario without GMES81. 

77 

78 
79 
80 

81 

See, in particular, ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 
812. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 93. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 
See the VEGA study, 2008. The state and health of the European and Canadian EO service industry in 
2006. 
PWC study, page 9. 

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In Option 3, it is assumed that the full palette of GMES services will be made available owing 
to  the  permanent  availability  of  space  data.  Therefore  100%  of  the  identified  benefits  will 
materialise. 

The  full  costs  of  the  ESA  LTS  are  taken  into  consideration  in  option  3,  as  all  Sentinels 
planned would have to be launched, exploited and renewed, with the corresponding additional 
costs for the ground segment and the data purchase from other missions necessary to run the 
GMES services. 
The results of the cost-benefit analysis are summarised in the graphs below82. The total cost 
profile  reflects  the  peaks  in  2017-18  and  2024  of  the  GSC-related  costs  (renewal  of  the 
Sentinels). 

Benefits  exceed  costs  from  2014  and  throughout  the  whole  period  considered.  Benefits 
increase  sharply  starting  from  2023,  when  the  Category  2  and  3  benefits  materialise.  As  a 
consequence, net benefits are always positive and show a very high return on the investment 
in the long term. 

Nevertheless,  the  implementation  of  this  option  would  require  a  considerable  financial 
contribution  from  the  Community  budget  for  a  long  period  of  time83.  As  such,  this  option 
could  only  be  motivated  if  it  is  recognised  that  GMES  is  a  key  tool  for  climate  change 
mitigation and adaptation, which is a priority of the EU. 

Option 3
Annual Cost/Benefit in present values

Total Costs per year (2009 Present Value)

Total benefits per year (2009 Present Value)

5.000,0 

4.000,0 

3.000,0 

 €

n
o

i
l
l
i

M

2.000,0 

1.000,0 

-

2014

2015

2016

2017

2018

2019

2020

2021

2022
Year

2023

2024

2025

2026

2027

2028

2029

2030

82 
83 

See footnote concerning the graphs under options 1 and 2 
See also the cost table in section 5.1.2. 

EN 

33 

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Option 3
Cumulative Net benefits (Present Value 2009 up to year X)

35.000,0 

30.000,0 

25.000,0 

20.000,0 

Million €

15.000,0 

10.000,0 

5.000,0 

-

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year

6. 

COMPARING THE OPTIONS 

In quantitative terms, the options can be compared most easily on the basis of their generated 
Net  Present  Values  in  the  period  under  consideration.  Results  are  represented  in  the  figure 
below84. 

NPV comparison among options
2009 prices

35.000,0 

30.000,0 

25.000,0 

20.000,0 

Million €

15.000,0 

10.000,0 

5.000,0 

-

-5.000,0 

2014

2015

2016

2017

2018

2019

2020

2021

Year

2022

2023

2024

2025

2026

2027

2028

2029

2030

Option 3

Option 2

Option 1 baseline

Option 1 baseline

Option 2

Option 3

84 

The figure shows, for each option, the cumulative net present value (in 2009) of a stream of payments 
and benefits starting in 2014 and ending in year X, where X can take on any value between 2014 and 
2030 

EN 

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Taking  into  account  also  the  impacts  not  included  in  the  PWC  study  and  therefore  in  the 
above graph, the following comparison can be made in the light of the objectives defined in 
chapter 3 (keeping in mind that costs are referred to the GSC, benefits to GMES as a whole): 

Effectiveness 

Efficiency 

Coherence 

Option 1 
(baseline) 

Does  not  achieve 
any of the objectives 

Some (low) costs to achieve no benefits 
(storage of developed satellites) 

on 

Impact 
the 
Community  budget, 
however,  would  be 
zero,  which  means 
that  funds  would  be 
available  for  other 
initiatives 
and 
programmes. 

Option 2  Achieves the 
objectives of 
provision of 
information services 
through sustainable 
infrastructure only 
for a limited period 
(up to 2020). Does 
not achieve 
objective related to 
sustainable 
downstream growth. 

Option 3  Achieves  all  policy 
objectives. 

A EU budget contribution to the GSC of 
approximately  200  M€/year  on  average 
in  the  next  financial  framework  would 
enable  achieving  benefits  between  400 
and  900  M€  per  year  until  2022.  After 
2020, benefits would drop to about 130 
M€/year,  approximately  equal  to  costs 
in the following period. 

This  option  has  important  built-in  cost 
inefficiencies linked to the "stop-and-go 
approach".  The  EU  would  not  benefit 
the 
from  economies  of 
production  of  recurrent  satellite  units, 
which are important in the space sector.  

scale 

in 

A EU budget contribution to the GSC of 
approximately  430  M€/year  on  average 
in  the  next  financial  framework  would 
enable  delivering  benefits  of  slightly 
less  than  a  billion  €/year  until  2022, 
then  peaking  at  more  than  5  billion 
€/year as of 2027.  

inconsistent  with 

No benefits therefore no trade-offs. 
Strongly 
the 
previous  EU  efforts  in  developing 
the GSC and with the positioning of 
the  EU  within  the  global  Earth 
Observation  community  within  the 
last 10 years. 

Would be coherent only in case of a 
major  shift  of  policy  priorities  in 
the  EU,  namely  lowering  climate 
change  and  citizens'  security  in  the 
political agenda. 

The impact on EU budget, although 
higher than in the baseline, is likely 
to 
limited 
be 
economic 
environmental 
benefits.  

offset 

and 

by 

coherence  would 

Policy 
be 
dependent  on  the  capacity  of  the 
EU and the rest of the European EO 
community  to  bridge  the  gap  after 
the lifetime of the first generation.  

Inconsistent  with  EU  declared 
ambitions  to  lead  in  the  climate 
change  arena  (in  any  event  climate 
change  will  necessitate  long-term 
monitoring activities).  

The longer-term investment,  higher 
than  in  the  baseline,  would  enable 
positive 
in  political 
priority  areas,  such  as  climate 
change.  Coherence  with  political 
agenda and EU objectives. 

trade-offs 

Potential  for  strategic  benefits  for 
the EU as global actor. 

envelope 

necessary 

The 
and 
corresponding  shift  from  research 
the 
to  operation  would  require 
insertion  of  GMES  among 
the 
financing  priorities  in  the  next  EU 
financial framework and may imply 
corresponding  adjustments  in  other 
policy areas. 

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7. 

MONITORING AND EVALUATION 

The  Communication  itself  will  not  directly  result  in  the  financing  of  new  activities  through 
the  EU  budget,  in  addition  to  the  actions  financed  through  FP7,  preparatory  actions  and 
GMES  initial  operations  until  2013.  The  latter  activities  are  not  the  object  of  this  impact 
assessment  and  will  be  monitored  and  evaluated  according  to  standard  Commission 
procedures. 

Should one of the Options requiring the exploitation of the Sentinels post-2014 be chosen by 
the  next  College  of  Commissioners,  the  proposal  for  the  relevant  basic  act(s)  will  be 
elaborated  in  line  with  applicable  rules,  in  particular  regarding  the  preparation  of  the  next 
multiannual  financial  framework.  Such  basic  act(s)  would  contain  detailed  provision  on  the 
monitoring  and  evaluation  of  activities  to  be  financed  through  the  EU  budget.  The 
accompanying  Impact  Assessment  would  have  to  analyse  monitoring  and  evaluation 
mechanisms. 

Nevertheless,  it  is  useful  to  give  here  an  outline  of  the  main  lines  of  evaluation  and 
monitoring mechanisms that could apply in general terms. 

Evaluation 

In  line  with  standard  Commission  practices,  evaluation  tasks  will  be  carried  out  in  three 
phases (ex ante, interim and ex post). The interim and ex post evaluation will assess whether 
the operational objectives referred to in chapter 3.3 are met. 

Additionally, the Commission will evaluate the progress of exploitation activities before any 
major decision milestones, including the decision on the renewal of the Sentinels, which may 
have to be taken before the beginning of one or more financial frameworks due  to the long 
development cycles for satellites. Measures will have to be taken so that, in each policy cycle, 
decisions are informed by i.a. an update of the cost-benefit case for the various options and a 
wide  stakeholders'  consultation,  with  a  focus  on  user  communities,  on  effectiveness  and 
usefulness of the system. 

Monitoring 

The Commission will ensure that agreements concluded in the framework of GMES services 
provide  for  supervision  and  financial  control  by  the  Commission,  if  necessary  by  means  of 
on-the-spot checks, including sample checks, and audits by the Court of Auditors. If need be, 
the  Commission  could  be  assisted  by  external  technical  experts  when  monitoring  the 
implementation of the programme. On the basis of the results of the on-the-spot checks, the 
Commission  will  ensure  that,  if  necessary,  the  scale  or  the  conditions  of  allocation  of  the 
financial contribution originally approved and also the timetable for payments are adjusted. 

In addition to financial supervision, the Commission will put in place mechanisms to ensure 
continuous technical monitoring. 

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Annex I 
GMES: observing the Planet for a safer world – a short description 

Managing  natural  resources  and  biodiversity,  adapting  to  sea  level  rise,  monitoring  the 
chemical  composition  of  our  atmosphere:  all  depend  on  accurate  information  delivered  in 
time to make a difference. 

The  European  Earth  Observation  Programme  (GMES)  provides  data  useful  in  a  range  of 
issues including climate change and citizen's security. Land, sea and atmosphere – each Earth 
component is observed through GMES, helping to make our lives safer. 

The  purpose  of  GMES  is  to  deliver  information  which  corresponds  to  user  needs.  The 
processing  and  dissemination  of  this  information  is  carried  out  within  the  "GMES  service 
component". The thematic areas within the GMES service component comprise: 

•  land, marine and atmosphere information – ensuring systematic monitoring and forecasting 

the state of the Earth's subsystems at regional and global levels; 

•  climate  change  information  –  helping  to  monitor the effects of climate change, assessing 
mitigation  measures  and  contributing  to  the  knowledge  base  for  adaptation  policies  and 
investments; 

•  emergency and security information – providing support in the event of emergencies and 
humanitarian  aid  needs,  in  particular  to  civil  protection  authorities,  also  to  produce 
accurate information on security related aspects (e.g. maritime surveillance, border control, 
global stability, etc.). 

The  GMES  service  component  depends  on  Earth  observation  data,  collected  from  space 
(satellites), air (airborne instruments, balloons to record stratosphere data, etc.), water (floats, 
shipboard instruments, etc.) or land (measuring stations, seismographs, etc.). These facilities 
are  called  the  GMES  infrastructure  component;  non-space  based  installations  in  the  GMES 
infrastructure component are generally referred to as "in situ component". 

By  securing  the  sustainability  of  an  information  infrastructure  necessary  to  produce  output 
information in the form of maps, datasets, reports, targeted alerts, etc…, GMES helps people 
and organisations to take action, make appropriate policy decisions and decide on necessary 
investments.  GMES  also  represents  a  great  potential  for  businesses  in  the  services  market, 
which  will  be  able  to  make  use  of  the  data  and  information  it  provides  according  a  full  an 
open access principle. 

Earth observation-based services already exist in Europe, but they are dispersed at national or 
regional  level  and  cannot  rely  on  a  sustainable  observation  capacity.  With  the  exception  of 
meteorological  services,  long-term  availability  and  reliability  of  information  is  not 
guaranteed.  This  is  why,  in  order  to  contribute  to  improve  its  response  to  ever  growing 
challenges  of  global  safety  and  climate  change,  Europe  develops  a  sustained  and  reliable 
Earth observation system of its own. 

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ANNEX II 
Reference studies and documents 

PriceWaterhouseCoopers, October 2006, Socio-Economic Benefits Analysis of GMES, prepared for 
ESA 
http://www.esa.int/esaLP/SEMJZ10DU8E_LPgmes_0.html 
Impact Assessment of the European Space Policy, including GMES 

http://ec.europa.eu/enterprise/space/off_docs_en.html  

GOSIS study (funded under FP6) on GMES governance models 
http://ec.europa.eu/enterprise/space_research/pdf/gosis.pdf 
SEIS Impact Assessment: Towards a Shared Environmental Information System (SEIS) 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC0112:EN:HTML 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0046:FIN:EN:PDF 
http://eurlex.europa.eu/Notice.do?val=464212:cs&lang=en&list=464212:cs,&pos=1&page=1&nbl=1
&pgs=10&hwords=&checktexte=checkbox&visu=#texte 

Impact  Assessment  relating  to  the  Economic  and  Governance  Evolution  of  Space  in  Europe,  RPA 
February 2007, prepared for EC DG Enterprise & Industry 

http://ec.europa.eu/enterprise/calls/files/08_004/rpa_study.pdf 

European  Commission  Green  Paper,  European  Space  Policy,  COM(2003)17  final  (21.1.2003)  - 
http://eur-lex.europa.eu/LexUriServ/site/en/com/2003/com2003_0017en01.pdf 
European  Commission  White  Paper  Space:  a  new  European  frontier  for  an  expanding  Union: 
An action  plan  for  implementing  the  European  Space  policy,  COM(2003)673  (11  November  2003) 
http://ec.europa.eu/comm/space/whitepaper/whitepaper/whitepaper_en.html 
European Commission 'European Space Policy - Preliminary Elements' COM(2005) 208 final 
(23.May 2005) 
http://ec.europa.eu/enterprise/space/doc_pdf/pep.pdf 
SPASEC March 2005: Report of the panel of experts on space and security, prepared for EC DG 
Enterprise & Industry 
http://ec.europa.eu/comm/space/news/article_2262.pdf 
ECORYS / ESYS 2006: SATMAC – Satellite Communication Market Assessment and Cost Benefit -, 
Market Characterisation Report and Satellite Communication Application and Services, prepared for 
EC DG Enterprise & Industry 
http://ec.europa.eu/enterprise/space/doc_pdf/impact_assessment_en.pdf 
BICEPS report - Building an Information Capacity for Environmental Protection and Security 
(European Commission, DG RTD, 2004) 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 
DPAG  report  -  Data  Policy  Assessment  for  GMES  (European  Commission  DG  RTD)  - 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 
INSPIRE  Extended 
http://inspire.jrc.it/reports/inspire_extended_impact_assessment.pdf 

–  European  Commission, 

Impact  Analysis 

SEC(2004)980 

– 

http://inspire.jrc.it/reports/AANSDI_Italy_FinalApproved_v12en.pdf 

Costs for monitoring and reporting 
GINIE  (10/2003):  Geographic  Information  in  the  Wider  Europe,  DG-INFSO  Contract  IST-2000-
29493 
http://www.ec-gis.org/ginie/doc/ginie_book.pdf 
PIRA (09/2000): Commercial Exploitation of Europe’s Public Sector Information © European 
Communities, 2000 
ftp://ftp.cordis.europa.eu/pub/econtent/docs/2000_1558_en.pdf 

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Craglia M and J. Nowak (2006): “Assessing the Impacts of Spatial Data Infrastructures - Report of the 
International Workshop on the Cost to Benefit and Return on Investment Ratios of SDIs”. 2006, Ispra, 
Italy 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reports/report_sdi_crossbenefit%20.pdf  
European  KNOWLEDGE  INTENSIVE  Services  based  on  Earth  Observation:  “Doing  business  with 
the help of GMES” by S.Galant, T.Pagano, A.Vaféas, TECHNOFI, October 2007 (copy available) 
Geospatial Interoperability Return on Investment Study, National Aeronautics and Space 
Administration (NASA): Geospatial Interoperability Office, April, 2005. 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reference/ROI_Study.pdf 
OECD Environmental outlook to 2003 

http://www.oecd.org/dataoecd/29/33/40200582.pdf 

OECD(2005): Space 2030 – “Tackling society’s challenges” 
http://www.oecd.org/document/13/0,2340,en_2649_34815_35059341_1_1_1_1,00.html 
Space for GeoInformation, The Netherlands (02/2003) 
http://www.ravi.nl/ruimte/index.htm 
MICUS (01/2003): The market for geospatial information: potential for employment, innovation and 
added value, study for the Germen government 
http://www.micus.de/pdf/micus_study_broadband.pdf 
P.Weiss (NOAA, 02/2002): Borders in Cyberspace – conflicting public sector information policies and 
their economic impacts (for the EU/US comparison) 
http://www.weather.gov/sp/Borders_report.pdf 
Environmental Performance Index 2008, Yale and Columbia, http://epi.yale.edu/Home  
Euroconsult 2007, Assessment of the downstream value-adding sectors of space-based applications 
VEGA and Booz Allen and Hamilton, 2004, The state and health of the European and Canadian EO 
service industry 
VEGA, 2008, The state and health of the European and Canadian EO service industry in 2006 
ECORYS, 2008, Study on the competitiveness of the GMES Downstream Sector, prepared for DG 
Enterprise and Industry

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ANNEX III 
Technical content of the ESA GSC programme and schedule of launches in the ESA 
Long term Scenario 

1. 

INTRODUCTION 

The objective of GMES is to provide, on a sustained basis, reliable and timely services related 
to environmental and security issues. 

As  stated  in  the  European  Space  Policy  Resolution,  GMES  comprises  a  service  component 
and  an  infrastructure  component,  including  space  and  in-situ.  ESA  is  in  charge  of  the 
coordination and the implementation of the space infrastructure component starting with the 
GSC Programme. 

The  objective  of  the  ESA  GMES  Space  Component  Programme  is  to  fulfil  the  space-based 
observation requirements in response to European policy priorities with a particular emphasis 
on the fast track and pilot services identified by the EC for early implementation. It aims at 
developing  a  fully  operational  capability  in  view  of  feeding  GMES  services  with  satellite 
data. 

The  GMES  Space  Component  programme,  within  its  available  resources,  also  aims  at  the 
operational provision of satellite data for other European and national services. 

In addition, the ESA GSC Programme covers the development (and pre-operations phase) of a 
Data Access Layer ground infrastructure aiming at feeding GMES Services with satellite data 
from all missions (ESA, National, EUMETSAT and other Third Party Missions) of relevance 
to the overall space component of GMES. 

The  ground  segment  will  be  designed  in  a  way  to  ensure  coherence  and  interoperability 
between the Sentinel and specific contributing missions in order to fully exploit their data for 
both GMES and other registered national services.  

2. 

USER REQUIREMENTS PROCESS 

The Commission set up Implementation Groups to provide guidance on the definition of the 
GMES  services  and  to  support  it  in  its  role  of  aggregating  user  requirements,  starting  with 
land  monitoring,  emergency  response  and  marine  services  and  subsequently  for  atmosphere 
composition  monitoring  services.  The  results  were  debated  and  consolidated  by  the  GMES 
Advisory  Council  and  user  requirements  were  transmitted  to  ESA.  Subsequently,  ESA 
consulted  the  EC  and  the  Implementation  Groups  to  accurately  reflect  the  related  space 
infrastructure  needs  in  the  Sentinel-1  to  -5  Mission  Requirement  Documents  prepared  by 
ESA.  The  need  for  the  long-term  availability  of  low-inclination  altimetry  missions  was 
expressed by the Marine Core Services Implementation Group and subsequently endorsed by 
the EC. 

The  technical  objectives  of  the  GSC  programme  clearly  correspond  to  these  user 
requirements.  Regarding  data  requirements  for  the  GMES  services,  ESA  will  prepare  a 
corresponding Data Access Portfolio (DAP) and its future updates. Specific references to the 
content of these requirements are provided in the following sections. Future updates of user 
requirements will be implemented in the GSC following the agreed scheme within the GMES 
Governance. A first preliminary way how this could be treated is described in GAC document 
GAC-11-04, which will be further refined. 

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2.1. 

Space Segment Overview (Sentinel-1 to -5) overview 

The key aspects of the individual Sentinel missions are as follows: 

•  The  Sentinel-1  satellite  carries  a  SAR  in  a  well-controlled  dawn-dusk  sun-synchronous 
orbit at approx. 700 km altitude with an exact repeat cycle of 12 days in support of multi-
pass  interferometry.  With  the  SAR  swath  of  approx.  240  km,  a  12-day  quasi-global 
coverage is ensured. The ground resolution exceeds that of ERS and ENVISAT in imaging 
mode.  The  satellite,  weighing  about  2.2  tons,  is  adapted  to  the  large  SAR  instrument, 
which  features  a  phased-array  antenna  with  5  kW  total  radiated  power.  A  duty  cycle  of 
20%  is  achieved.  Following  the  launch  with  a  Soyuz-class  vehicle,  the  Sentinel-1  design 
lifetime is 7 years. 

•  The  Sentinel-2  satellite  carries  a  medium  to  high  resolution  push-broom  multi-spectral 
imager  operating  in  the  VNIR  (Visible  and  Near-InfraRed)  and  SWIR  (Short-Wave 
InfraRed)  in  a  Sun  synchronous  polar  (ENVISAT-like)  orbit.  The  imaging  ground 
resolution  is  10,  20  and  60  m  (depending  on  channel).  The  swath  width  of  the  multi-
spectral  imager  is  approx.  285  km,  which  ensures  systematic  acquisition  of  all  land 
surfaces  every  10  days. The satellite, weighing about 1  ton, is launched fits with a Vega 
class launcher and has a 7 year design lifetime. 

•  The Sentinel-3 satellite carries a Cryosat-derived microwave altimeter (incl. a microwave 
radiometer and precise orbit determination device) and two imagers, for ocean/land colour 
observations  (MERIS-like)  and  for  sea/land  surface  temperature  observations  (AATSR-
like)  into  an  ENVISAT-like  orbit.  The  former  imager  provides  also  continuity  to  the 
VEGETATION mission. Several lessons learned from ENVISAT are used to optimise the 
system, e.g. to minimise sun-glint impact, so enhanced continuity is ensured. The satellite, 
weighing approx. 1.4 tons, supports the 100% instrument duty cycle and is launched with a 
Vega class small launcher. The design lifetime is 7 years. 

•  Sentinel-4  and  -5  are  dedicated  to  atmosphere  composition  monitoring.  According  to  the 
current  preliminary  concept,  the  relevant  measurements  are  taken  from  the  geostationary 
orbit and the low earth orbit respectively. 

–  The  rationale  for  the  development  of  Sentinel-4  is  to  meet  the  objective  of 
frequent  revisit,  i.e.  to  observe  rapid  changes  in  atmospheric  composition.  Thus 
far  no  atmospheric  composition  monitoring  is  carried  out  from  Geostationary 
Orbit  (GEO),  but  there  is  considerable  experience  from  low  earth  orbit  (LEO) 
with similar instrumentation. The baseline is to implement Sentinel-4 as payload 
on MTG missions. 

–  Sentinel-5  is  a  component  in  LEO,  exploiting  the  advantages  of  such  orbits, 
namely global coverage, better spatial resolution and stronger signal to noise ratio. 
The  experience  with  GOME,  GOME-2,  AIRS,  IASI,  OMI,  SCIAMACHY, 
MIPAS,  GOMOS,  ODIN,  MOPPIT  and  other  sensors  provides  a  very  solid 
scientific  and  technical  basis  on  which  Sentinel-5  builds.  The  baseline  is  to 
implement Sentinel-5 as payload on post-EPS missions. 

–  Considering  the  late  availability  of  the  post-EPS  satellites,  a  small  Sentinel-5 
Precursor  mission  to  be  launched  in  2013/14  will  ensure  the  continuity  of  UV-
VIS-NIR-SWIR  data  between  ENVISAT  and  Sentinel-5  on  post-EPS,  related  in 
particular to atmospheric composition monitoring in the troposphere. 

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Two  spacecraft  in  orbit  are  needed  to  meet  the  coverage  and  observation  frequency 
requirements for the Sentinel-1, -2 and -3 missions. However, an incremental deployment of 
capabilities is assumed. 

As regards low-inclination altimetry it is envisaged to carry out study activities for a Jason-
Cryosat (Jason-CS) mission. The Jason-CS spacecraft would be based on a platform derived 
from Cryosat-2 but adjusted to the specific requirements of a 1,300 km orbit. The instrument 
suite  could  comprise  a  recurrent  radar  altimeter  (Jason-2  RA  or  Sentinel-3  SRAL),  a 
Microwave Radiometer (recurrent from Sentinel-3), a GPS device (recurrent from SWARM 
or  Sentinel-3)  a  DORIS  device  (recurrent  from  Sentinel-3)  and  a  Laser  Reflector  (recurrent 
from Cryosat). 

Two  spacecraft  in  orbit  are  needed  to  meet  the  coverage  and  observation  frequency 
requirements for the Sentinel-1, -2 and -3 missions. However, an incremental deployment of 
capabilities is assumed. 

The  Segment  1  of  the  ESA  GSC  Programme,  as  approved  by  the  ESA  Member  States 
participating in the programme includes the development, launch and in-orbit verification of 
the first satellite only, of a series for each of the Sentinel-1, -2 and -3 missions. 

2.2. 

Sentinel-4 and Sentinel-5 activities 

Two  parallel  pre-Phase  A  studies  of  Sentinel-4  and  Sentinel-5  have  been  initiated  in  2007. 
The  objective  of  these  studies  is  to  address  the  optimum  allocation  of  space  resources  for 
atmospheric  composition  monitoring  missions  according  to  requirements  expressed  by  user 
groups, and is supported by ad-hoc science and instrument studies. 

These studies are part of the approved Segment-1 of the ESA GSC Programme. 

2.3. 

Ground segment activities 

The Ground Segment comprises the Flight Operations Segment (FOS) and the Payload Data 
Ground  Segment  (PDGS).  The  FOS  is  responsible  for  the  monitoring  and  control  of  the 
satellites,  including  flight  dynamics  operations  for  orbit  control,  whereas  the  PDGS  is 
responsible  for  the  handling  of  the  Sentinel  mission  data,  its  reception  on  the  ground, 
processing, archiving and dissemination. 

The ground segment activities for the Sentinel missions comprise the definition of the ground 
system  concept  of  FOS  and  PDGS  together,  followed  by  the  design,  implementation, 
verification  and  validation  of  the  FOS  and  the  PDGS  individually,  and  concluded  with  the 
participation to the integration, verification and validation of the resulting system as a whole, 
i.e. FOS and PDGS together with the satellite and including the commissioning phase. 

2.3.1.  Flight Operations Segment (FOS) 

The principal FOS components in support to the Sentinel missions are: 

•  the Ground Station and Communications Network performing telemetry, telecommand and 
tracking operations. A primary ground station will be used throughout all mission phases, 
complemented  by  additional  TT&C  stations  as  backup  stations  or  stations  used  during 
Launch and Early Orbit Phase (LEOP). 

•  the Flight Operations Control Centre, including: 

–  the Sentinels Mission Control System (MCS), for telecommanding of the satellite 
and  for  supporting  command  request  received  from  the  PDGS  mission  planning 
system and handling of telemetry from the satellites; 

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–  the  specific  Sentinels  Spacecraft  Simulators,  supporting  operations  procedure 
validation, operator training and the simulation campaign before each major phase 
of the missions; 

–  the  Sentinels  Flight  Dynamics  System  (FDS),  supporting  all  activities  related  to 
attitude and orbit determination and prediction, preparation of orbit manoeuvres, 
spacecraft dynamics evaluation and navigation; 

–  a  General  Purpose  Communication  Network,  providing 

the  services  for 

exchanging data with any other external system during all mission phases. 

The  FOS  implementation  includes  the  definition  of  the  FOS  architecture  comprising  a  FOS 
Core  Ground  Segment  used  for  all  Sentinels  as  well  as  including  Sentinel-specific 
developments,  including  security  relevant  implementations  for  telecommanding.  This 
includes  the  completion  of  the  design,  implementation,  verification  and  validation  of  the 
ground  stations,  the  communication  networks  as  well  as  the  MCS,  Simulators  and  FDS. 
Developments will reuse existing core facilities such as the infrastructure of the MCS already 
in use for other earth observation missions. 

The FOS activities furthermore include support to the ground system integration, verification 
and  validation  with  the  PDGS  and  the  satellite  and  all  operations  preparations  activities, 
simulations  sessions  for  LEOP  and  simulations  in  support  to  commissioning  and  routine 
operations. The activities furthermore include the FOS operations during the commissioning 
phase. 

2.3.2.  Payload Data Ground Segment (PDGS) 

The Payload Data Ground Segment (PDGS) is a distributed ground segment, reusing existing 
facilities,  infrastructure  and  expertise.  Furthermore,  the  ground  segment  links  and  shares 
already available infrastructure developed for National missions. 

It includes the multi-mission payload data ground segment for the access to Sentinel and other 
missions and the development of this harmonised and interoperable ground segment that will 
reuse and evolve from existing shared facilities with different missions. 

Ground segment activities also cover the extension of the heterogeneous mission accessibility 
concept to cover product formats, quality reporting and certification across different missions. 
They also include the finalisation of the architecture of the Sentinel payload ground segment, 
considering  the  GMES  end-to-end  security  concept.  The  Sentinels’  algorithms  and  products 
definition studies focus on standardisation across similar missions. 

The  multi-mission  PDGS  development  includes  the  implementation  and  evolution  of the 
generic elements (archives, interfaces, catalogues, networks, User Services, etc.) for Sentinel-
1, -2 and -3. 

In  addition,  the  PDGS  includes  the  specification,  design  and  development  of  Sentinel-1,  -2 
and  -3  specific  PDGS  elements  (e.g.  algorithms  &  processors,  modules  related  to  the 
customisation/adaptation  of  mission  planning,  user  services  and  facilities  for  acquisition, 
archiving,  dissemination  and  cal/val  functions).  These  mission-specific  elements  are  then 
integrated  into  the  configured  multi-mission  infrastructure  which  will  be  deployed  in  the 
operational  centres.  The  above  will  be  completed  with  the  operational  validation  and  the 
transfer to operations. 

Ground segment technical evolution must also be addressed to adapt to new technologies and 
evolving requirements from the GMES Services. 

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The  PDGS  activities  for  the  Sentinel  missions  also  include  support  to  the  ground  system 
integration,  verification  and  validation  with  the  FOS  and  the  satellite  and  all  operations 
preparations activities in support to commissioning and routine operations. 

All ground segment activities described in this chapter are part of the approved Segment-1 of 
the ESA GSC Programme. 

2.4. 

Data Access activities 

2.4.1.  Data procurement 

These  activities  are  primarily  focusing  on  providing  in  a  pre-operational  manner,  Earth 
Observation data to the GMES Services from 2008 onwards from (private and institutional) 
national  missions,  ESA,  National,  and  EUMETSAT  missions  to  GMES  Services  and  other 
third  party  missions  as  identified  in  the  programme  proposal  (ESA/PB-EO(2005)54,  rev.3). 
These activities concern the set up of a harmonised access to 8 to 12 missions and include the 
procurement of the actual data on the basis of individual user licenses, or multi-user licenses, 
or  resource  buy.  This  also  includes  any  adjustments  on  the  side  of  the  operators  of 
contributing missions regarding their ground segment and operational interfaces for the data 
use  as  well  as  the  adjustments  of  their  ground  segment  and  operational  interfaces  to 
adequately provide data to the GMES services and other GMES users as approved by the EC 
therefore fulfilling their observation requirements. 

All Data Access activities described in this chapter are part of the approved Segment-1 of the 
ESA GSC Programme, for the period up to mid-2010. 

Data access activities are currently financed through a dedicated EC-ESA grant agreement. 

2.4.2.  Data access management and initial operations 

This  task  includes  the  collection  and  critical  analysis  of  the  data  requirements  from  the 
complete  set  of  GMES  services.  The  GMES  mission  capacity  planning  activity  aims  at 
regularly performing a data gap analysis and defining the sensor resources required from the 
various  GMES  missions  to  adequately  fulfil  these  data  requirements.  The  results  of  these 
analyses are used for the preparation of the subsequent data access agreements with the EO 
mission partners for the contribution of their mission to GMES. 

2.5. 

Pre-Operations 

Until  the  start  of  the  GMES  operations  phase  of  the  Sentinels  (currently  assumed  in 
2012/2013)  the  GMES  services  will  be  provided  with  Earth  Observation  data  on  a  pre-
operational  basis  in  a  coherent  manner  based  on  national,  EUMETSAT  and  ESA  missions. 
This  includes,  in  addition  to  the  data  processing  and  access  services  of  relevant  GMES 
missions  which  are  covered  in  the  data  procurement  budget,  the  coordination  functions  that 
ensure the coherency of the end-to-end data provision and the common ground infrastructure. 
The coordination functions cover, across all these missions: mission planning, ordering, data 
request  follow-up  and  helpdesk  interface  to  services,  scheduling  the  distributed  ground 
segment  resources,  tools  development,  product/data  and  data  access  service  quality 
management,  end-to-end  data  flow  monitoring  among  data  access  among  others  pre-
operational tasks. Operations of the ground segment facilities supporting data access activities 
will  start  from  end  2008  to  perform:  ingestion  or  collection  of  data,  processing  up  to  the 
required  level,  archiving  and  distribution  of  GMES  product  sets  as  requested  by  GMES 
Services,  starting  from  the  Fast  Track  Core  Services,  the  atmosphere  and  security  pilot 
services and all other approved GMES services, as documented in the Data Access Portfolio 
and  its  future  updates.  This  includes  the  operation  of  archives  and  data  distribution 
infrastructure, among others, for this specific set of products. 

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In addition, pre-operations of the ground segment facilities will start prior to the launch of the 
Sentinels, and will cover the period from end 2008 to end 2010All Pre-Operations activities 
described in this chapter are part of the approved Segment-1 of the ESA GSC Programme. 

2.6. 

Launch schedule 

The launch schedule according to the ESA LTS is indicated in the figure below. 

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Annex IV 
The PWC study – methodology and limitations 

The benefit data for the cost-benefit analysis of the various options have been taken from the 
most  comprehensive  and  recent  study  available:  the  PriceWaterhouseCoopers  "Socio-
Economic Benefits Analysis of GMES" (report of October 2006). 

This Annex summarises the methodology of the PWC Study and its main limitations, in order 
to put the findings of the cost-benefit analysis into perspective. For more information, the full 
the  following  URL: 
text  of 
http://www.esa.int/esaLP/SEMJZ10DU8E_LPgmes_0.html. 

its  annexes  are  available  at 

the  PWC  Study  and 

1. 

CONTEXT 

The European Space Agency (ESA) Member States requested the ESA executive to procure a 
study on the socio-economic impacts of GMES in order to back their significant investment 
decisions. The study, managed by ESA in close cooperation with DG Enterprise and Industry 
of the European Commission, was concluded in October 2006. PWC worked in direct contact 
with  Commission  and  ESA  staff  for  progress  and  review  meetings.  In  addition,  an  "Expert 
committee"  nominated  by  the  GMES  Advisory  Council85  provided  advice  and  guidance  on 
key elements of the analysis, in particular the methodological approach and the presentation 
of results. Four Expert  Committee  workshops were organised  between April 2005 and  May 
2006. 

The study objectives were: 

•  to  determine  the  extent  of  the  impact  resulting  from  GMES  with  respect  to  a  reference 

baseline of what will happen if GMES is not implemented; 

•  to characterise the benefits resulting from GMES with respect to: 

–  the  strategic  and  political  dimension  of  GMES  including  considerations  such  as 
strategic  independence  of  Europe  and  support  to  Europe  playing  a  larger  role  at 
global level; 

–  the  economic  and  social  dimension  of  GMES  including  more  cost  effective 
information  gathering,  better 
improved 
information  and  greater  pressure  to  secure  international  agreements  to  address 
common threats and issues facing mankind today. 

targeted  policies 

resulting 

from 

The study focused on key benefit areas that could arise from GMES. Areas where the extent 
of the impact/the benefits are low or rather marginal have not been considered. The scope of 
the  analysis  excluded  any  costs  consideration.  No  evaluation  of  costs  against  the  projected 
benefits was carried out in the study itself. 

2. 

METHODOLOGY 

As a wide range of very different impacts arise due to GMES, a variety of different techniques 
was  required  to  characterise  the  associated  benefits.  The  broad  parameters  of  the  socio-
economic assessment are described by PWC as follows: 

85 

A Member States' group advising the European Commission on GMES development 

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•  the study focuses on reflecting the broadest range of societal and economic benefits which 

might be generated by GMES; 

•  the  method  is  unconstrained  in  nature,  i.e.  the  analysis  is  not  driven  by  any  prior 

assumptions as to where the benefits and impacts may occur; 

the assessment considers and expresses potential benefits in both quantitative and qualitative 
terms  on  the  basis  of  a  pragmatic  user-based  assessment  of  the  benefits,  whereby  a  wide 
number  of  informed  stakeholders  were  asked  to  consider  the  magnitude  of  the  contribution 
made  by  GMES.  Thereafter,  this  contribution  is  quantified  with  reference  to  respected 
published  sources  in  the  field  of  economic  valuation.  This  approach  is  considered  less 
subjective since it involves a process of ‘expert’ assessment; 

•  benefits and impacts are characterised with respect to a baseline (without GMES) scenario 

that is itself stakeholder informed; 

•  ultimately,  projected  economic  benefits  (inclusive  of  societal,  environmental  and  other 

economic benefits) are monetised and expressed in present value terms. 

2.1. 

Stakeholders engagement 

Stakeholder consultation is at the core of the study. A comprehensive stakeholder consultation 
exercise was undertaken to support: 

•  the development of the baseline scenario; and 

•  the estimation of impacts resulting from GMES, 

This  process  targeted  key  stakeholders  across  the  range  of  GMES  sectors  and  geographical 
areas.  The  consultation  process  covered  three  categories  of  stakeholders  reflecting  the  key 
policy areas affected by GMES and geographical areas impacted: 

the  European  Commission  and  agencies 

•  stakeholders consulted on macro level impacts: efforts were directed towards stakeholders 
for  development  and 
in 
implementation  of  European  policy  domains  affected  by  GMES  services.  As  European 
level  institutions  work  in  close  collaboration  with  Member  States,  also  national 
counterparts  and  bodies  suggested  by  the  Expert  Committee  for  the  study  were  also 
consulted. 

responsible 

•  stakeholders consulted on micro level impacts. these stakeholders were divided into: 

–    direct  stakeholders:  examples  of  direct  stakeholders  include  agencies  directly 
producing and using information products on the state of the environment through 
the  application  of  GMES  services  (such  as  the  European  Environment  Agency, 
the European Maritime Safety Agency, national Environmental Agencies) and the 
downstream industry; 

–  ─  indirect  stakeholders:  these  included  for  example,  companies  in  production 
industries which use information about the environment to inform their strategic 
and operating decisions. 

Stakeholders were first listed by the study team, then the list was checked and consolidated by 
ESA, 
to  ensure  notably  a 
comprehensive coverage of geographic area and policy domains. After prioritisation using an 

the  European  Commission  and 

the  Expert  Committee 

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Influence/interest matrix86, 104 stakeholders were consulted (the list is annexed to the PWC 
study).  The  majority  of  stakeholders  contacted  were  from  European  level  organisations  to 
ensure complete coverage of policy sectors addressed by GMES. 

Stakeholders were consulted mainly through individual interviews (face-to-face, telephone, e-
mailing)  or  workshops.  Three  workshops  were  held  (GMES  and  climate  change,  29/09/05; 
GMES  and  aid  and  development,  06/10/05;  GMES  and  civil  protection  and  public  health, 
10/10/05).  The  structure  of  individual  interviews  and  workshops  is  annexed  to  the  PWC 
study. 

When  divergent  views  amongst  members  of  the  same  workshop  were  recorded,  the  study 
team tried to cross-check these views for internal consistency and, when this did not deliver 
results, maintained a range of impacts for benefit modelling and sensitivity analysis purposes. 

2.2. 

Approach to benefits assessment 

The assessment of GMES benefits presented in the PWC report was based on: 

•  the stakeholder consultation process referred to above; 

•  the benchmarking stakeholder inputs and feedback with published sources; 

•  desk based review of a wide variety of secondary sources; 

•  comparison of impact estimates against case studies showing what is possible today or in 

the near future. 

To  the  maximum  extent  possible,  the  benefit  case  was  evidence  based  –  reflecting  what 
stakeholders said about the projected practical application of GMES services and the effects 
that these services might have on policy formulation or practice and the different inputs have 
been cross-validated. 

Ultimately,  based  upon  this  feedback,  PWC  identified  the  economic  value  generated  by 
GMES services (in many cases, as manifested through better, or more responsive government 
policies, made possible by GMES). 

The steps for macro economic benefit assessment are summarised below: 

(1) 

Determine  the  policy  context  through  analysis  of  existing  policy  documents  and 
stakeholder  consultations.  The  result  is  a  mapping  of  EC  priorities  to  GMES  policy 
domains and of major issues and areas of potential wider benefits per policy domain, 
as illustrated below 

86 

Stakeholders'  groups  were  positioned  with  respect  to  their  interest  in  GMES  and  their  ability  to 
influence GMES evolution. 

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Where stakeholders contacted did not feel sufficiently well informed to estimate this 
impact,  the  issue  was  not  included  in  the  report  (examples:  effectiveness  of 
development aid for long term development and reconstruction; detection of longer 
term  environmental  degradation  and  development  of  humanitarian  crises;  improved 
understanding  of  carbon  and  water  cycles  and  their  impacts  on  human  well  being; 
improved management of energy resources). Given the time and budget constraints, 
not all issues could be addressed. However, as the benefits identified were extremely 
large, it should be taken as an indication that the benefits case presented is actually 
extremely conservative. 

(2) 

Development  and  validation  with  stakeholders  of  a  counterfactual  baseline  ('Without 
GMES' Scenario), essentially reflecting actions expected to arise at European or global 
level  in  the  absence  of  GMES.  This  scenario  is  described  in  detail  in  the  study, 
including  assumptions  for  the  Space  component.  It  was  derived  from  a  range  of 
published  sources  and  also  from  the  stakeholders'  consultation.  A  number  of 
assumptions regarding policy development are described in Annex 8 to the study; 

(3) 

Development of a 'With GMES' Scenario. This was done using the services portfolio 
of GMES Initial Services and the demonstration projects under ESA (GMES Service 

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Element) and EC (GMES Integrated Projects) frameworks. A detailed table listing the 
existing  services  per  policy  area  (baseline),  the  additionality  of  GMES,  the 
beneficiaries and the benefits (macro and micro) is annexed to the PWC study; 

(4) 

Quantification  of  the  additional  impact  of  GMES,  through  indicators  developed  for 
each policy area. Benefits were differentiated over time and combined and discounted 
to reflect present value assessment of the total benefits (see below for limitations on 
this assessment). 

2.3. 

Indicators and tools for assigning value 

A number of indicators were chosen to measure projected benefits. These were not intended 
to  be  exhaustive  in  nature  and  capture  every  conceivable  GMES  benefit.  Rather,  they  were 
seen  as  an  accepted  means  of  expressing  and  valuing  change  against  a  particular  social, 
environmental and economic baseline. The PWC study team considered the chosen indicators 
as appropriate, based on literature review and stakeholders' input. 

To  minimise  the  possibility  of  uncontrolled  assumptions  influencing  this  evaluation,  a 
restricted number of standard indicators were adopted, for which extensive peer review was 
conducted.  As  a  result,  the  application  of  these  indicators  in  the  context  of  the  impact  and 
benefits  analysed  was  standard  practice  among  many  national  and  international  government 
organisations. 

Indicators used in all areas of the benefit assessment are summarised below. 

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An example of the use of indicators to quantify projected benefits is as follows: 

In  the  area  of  marine  and  coastal  affairs,  GMES,  through  the  provision  of  qualitatively 
improved  information  regarding  the  movement  and  tracking  of  vessels,  could  reduce  the 
incidence of illegal oil discharges from vessels in European waters. This effect is expressed in 
economic terms in the PWC study through the following process: 

•  Economic costs per tonne of discharged oil are drawn from respected third party sources - 
these  costs  represent  the  social,  economic  (e.g.  impact  on  tourism,  clean-up  costs)  and 
environmental loss and damage which are potentially associated with oil spills; 

•  The  views  of  stakeholders  consulted  in  the  course  of  the  study  concerning  the  extent  to 
which  illegal  oil  discharges  might  be  reduced  (relative  to  the  prevailing  pattern  of 
discharge  in  European  water  –  the  counterfactual  baseline)  through  the  use  of  GMES 
information are considered; and finally  

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•  The difference in these prevailing rates of illegal oil discharge, with and without GMES, is 
combined with the economic cost per tonne (as discussed above) to give a total economic 
benefit associated with GMES. 

2.4. 

Key modelling assumptions and discount rate 

There are four main components within the framework employed in this study to express the 
views of stakeholders in economic terms: 

(1) 

(2) 

(3) 

(4) 

GMES  applications,  together  with  the  associated  projected  benefits,  are  assumed  to 
commence at different points in time due to the different levels of complexity through 
which particular services generate impacts and create benefits. 

In  all  cases,  peer  reviewed  and  accepted  standard  indicators  were  used  to  assign 
economic value to an impact generated as a result of information provided by GMES. 
Key  assumptions  and  calculation  processes  inherent  in  generating  these  indicators 
were reviewed for consistency with the assumptions underlying the analysis of GMES 
benefits  (in  particular,  the  time  frames  over  which  benefits  were  being  assessed  and 
the  geographic  coverage  of  the  services  were  considered  with  respect  to  the 
assumptions supporting the generation of each indicator); 

The discount rate applied to express projected benefits in present value terms is taken 
to be 4% real. This is coherent with the Impact Assessment Guidelines; 

The timeframe over which the projected annual benefits are appraised is 25 years and 
these are brought together and expressed in present value terms. Terminal Values (the 
continued economic value of a benefit stream beyond the core appraisal period of 25 
years) were also used to supplement the analysis and capture perpetual benefits. 

3. 

PRESENTATION OF THE RESULTS 

The  main  body  of  the  PWC  study  is  structured  around  policy  areas  (global  environment, 
security,  natural  resources,  European  environmental  protection,  risk  and  civil  protection, 
sustainable growth). 

However, different levels of effort are inherent in realising particular impacts by GMES and 
the  subsequent  benefits.  For  example,  a  forest  change  monitoring  service  impacts  on  the 
formulation of new agreements where states subject to heavy illegal deforestation implement 
effective  control  measures  to  reduce  the  level  of  forest  loss,  while  maritime  surveillance 
integrating satellite and conventional techniques improves the cost efficiencies for current oil 
spill monitoring practices within an existing well defined legal framework. 

Clearly  it  is  significantly  more  straightforward  to  realise  benefits  in  the  second.  To  better 
represent  the  substantial  variation  over  different  benefit  areas  in  the  effort  implied  for 
successful implementation of the underlying policies, benefits realised under individual policy 
areas were aggregated into three higher level categories. This categorisation is based on the 
inherent difficulty in effectively implementing the underlying policies including the extent to 
which  an  appropriate  legal  and  operational  framework  already  exists,  the  degree  of 
institutional  reform  required,  the  difficulty  in  securing  agreement  on  new  European 
environmental  legislation,  the  agreement  of  states  to  implement  effective  policies  etc.  The 
three categories are summarised below: 

•  Category 1: (Efficiency benefits) – these benefits relate to improved cost effectiveness in 
responding  to  the  implementation  or  enforcement  of  policies  currently  in  place.  In  these 
cases,  access  to  GMES  information  readily  available  from  precursor  GMES  services  or 

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from services that are planned in the near future directly generates the benefits cited. These 
benefits  are  analogous  to  the  benefits  of  data  continuity  that  GMES  will  bring.  Category 
One  benefits  are  assumed  to  be  delivered  through  existing  institutional  and  policy 
channels, and as a result these benefits could be achieved in a more timely manner; 

•  Category 2: (European policy formulation benefits) – these benefits relate to improved 
definition,  structuring  and  implementation  of  European  policies  as  a  result  of  GMES 
information  being  available  during  the  policy  formulation  process.  Their  realisation 
depends  upon  policy  developments  at  European  level,  or  significant  changes  in  the 
working  practices  of  target  user  institutions  with  a  view  to  making  operational  use  of 
GMES information. In these cases the benefits will be realised once the policies begin to 
achieve  their  objectives.  Implementing  such  policies  usually  requires  investment  on  the 
part of Member States while the benefits take longer to accrue. These considerations imply 
that  the  benefits  stream  will  begin  later  in  the  appraisal  period,  to  reflect  the  extent  of 
policy and institutional change required for the benefits to be realised; 

•  Category  3:  (Global  action  benefits)  –  these  relate  to  the  use  of  GMES  information  in 
setting up or improving the implementation of global agreements (e.g. for climate change, 
desertification,  deforestation).  In  these  cases,  realisation  of  the  benefits  is  critically 
dependent  on  international  agreements  and  cooperative  actions,  which  are  successfully 
implemented  and  lead  to  behavioural  changes.  Such  international  agreements  take 
considerable  time  to  set  up  and  to  make  an  impact.  Implementing  these  agreements  also 
implies considerable investment by the signatory states (e.g. in transfer payments, income 
foregone or investing in alternative technologies). Given these issues, it was assumed that 
these benefits are realised from 2025. 

On this basis, the table below summarises the phasing of each benefit category and shows that 
whilst Category One benefits are assumed to accrue in the near-term, Category Three benefits 
are assumed to arise only in the period from 2025. 

4. 

LIMITATIONS OF THE PWC BENEFITS ASSESSMENT 

The  assessment  of  GMES  benefits  in  specific  policy  areas  was  limited  by  access  to 
stakeholders  within  the  time  constraints  of  the  study  period.  In  particular,  many  of  the 
stakeholders  consulted  were  working  within  European  or  international  organisations  or  in 
research and policy development institutes in order to ensure as wide an overview as possible. 
Although  more  than  120  stakeholders  were  contacted  (approximately  double  the  number 
usually  considered  for  an  assessment  of  this  type),  there  were  gaps  in  the  contributions 
received. These included: 

•  Stakeholders from southern Europe working at national and regional level in sectors where 

GMES may impact; 

•  Stakeholders from industry sectors where GMES may be expected to impact; 

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•  Stakeholders working in policy sectors where there is low level of policy focus or limited 

experience within the European Union (e.g. polar issues, security issues). 

Throughout the study stakeholders provided valuable input but often the diversity of interests 
represented (for example during the climate change workshop there was representation from 
specialists  in  forests,  urban  planning,  emissions  trading)  limited  the  ease  with  which 
consensus could be achieved on the magnitude of potential benefits. Where appropriate, the 
consultants filtered information provided by the stakeholders in order to reach a consensus in 
their views. 

Other  inherent  limitations  existed  in  relation  to  the  level  of  understanding  and  hence 
availability of information on the value of potential benefits, and in the ability to assess the 
benefits of GMES information in the context of other dependencies for benefit realisation. In 
particular: 

•  Where  prototype  services  exist  (e.g.  under  the  ESA  GMES  Services  Element)  and 
stakeholders  had  experience  in  using  the  information  provided,  the  impact  and  benefit 
characterisation was significantly easier and more explicit than for stakeholders who as yet 
have had no direct exposure to the products and services presently being provided. 

•  For  areas  where  new policies  are  about to  be implemented  or updated (e.g. air pollution, 
marine  environment)  or  where  the  full  impact  is  yet  to  be  seen  (e.g.  water  framework 
directive,  soils  thematic  strategy),  stakeholders  were  less  certain  about  impacts  and 
benefits  due  to  ambiguity  with  respect  to  the  precise  content  of  the  baseline  "Without 
GMES" situation. 

The  baseline  scenario  does  not  include  any  radical  change  in  stakeholder  responsibilities  or 
organisational structure over the time period being considered (2005-2030). The benefits and 
impacts  are  estimated  by  stakeholders  on  the  assumption  that  their  operational  roles  and 
responsibilities  will  evolve  gradually  over  the  next  25  years  and  that  the  impacts  made  by 
GMES will be a gradual part of this evolution process. 

Moreover,  it  is  important  to  note  that  the  understanding  of  what  is  included  in  GMES  has 
evolved  since  the  study  (and  even  during  the  course  of  it).  However,  it  is  fair  to  say  that 
assumptions  documented  in  Annex  4  to  the  PWC  study  on  the  definition  of  the  different 
scenarios used are still largely valid today. 

Finally, it is important to reiterate that the value of the information provided by GMES and 
the value of the benefits identified does not materialise unless the information is actually used. 
It has been assumed throughout the PWC study that this effective utilisation would occur. In 
some cases, the resulting economic benefits can be considerable. In general, for the benefits 
assessed  in  the  PWC  report,  benefits  that  can  be  realised  in  a  straightforward  manner  are 
much  smaller  in  magnitude  (i.e.  below  €  5bn  discounted  over  the  total  25  year  timeframe 
under  consideration)  while  benefits  that  relate  to  the  implementation  of  new  policies  arise 
only  when  these  policies  begin  to  achieve  their  objectives.  Clearly  this  is  a  more  complex 
process and requires significant additional investment, political commitment and time for the 
benefit realisation. However these benefits are much larger in magnitude (of the order of tens 
of billion of Euros). 

These  processes  leading  to  Category  two  and  Category  Three  benefits  will  result  in  costs 
being  incurred  by  the  signatory  states  (e.g.  consider  the  implementation  of  the  Montreal  or 
Kyoto  Protocols).  However,  the  resulting  benefits  are  very  large.  In  these  cases,  the  impact 
estimated by the stakeholders refers to the total impact of GMES on the process to set these 

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agreements  up  while  the  estimates  of  the  benefits  refer  to  the  benefits  from  the  successful 
implementation of the resulting policy or international agreement. This means that the benefit 
assessment assumed that the required investments necessary for these benefits to be realised 
would be effectively be made. 

An  alternative  approach,  more  related  to  the  contingent  valuation  (willingness  to  pay) 
methodology, would address only the value represented by the information and not count the 
total  value  of  the  resulting  benefits.  After  extensive  consultation,  this  approach  was  not 
adopted in the PWC study. 

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ANNEX V 
LIST OF ABBREVIATIONS 

AR: 

CDR: 

DAP: 

DRS: 

Acceptance Review 

Critical Design Review 

Data Access Portfolio 

Data Relay System 

ECSS: 

European Cooperation for Space Standardisation 

EGNOS: 

European Geostationary Navigation overlay System 

EM: 

EPS: 

ESA: 

Engineering Model 

Eumetsat Polar System 

European Space Agency 

EUMETSAT:  European Organisation for the Exploitation of Meteorological Satellites 

EUTELSAT:  European Telecommunications Satellite Organization 

FAR: 

FM: 

FOS: 

FP6: 

FP7: 

Flight Acceptance Review 

Flight Model 

Flight Operations Segment 
6th Framework Programme for Research, research, technological development  

and demonstration activities 
7th Framework Programme for Research, research, technological development  

and demonstration activities 

GEO: 

Group on Earth observation 

GEOSS: 

Global Earth Observation System of Systems 

GMES: 

GNSS: 

GSC: 

Global Monitoring for Environment and Security 

Global Navigation Satellite System 

GMES Space Component 

INSPIRE: 

Infrastructure for Spatial Information in the European Community 

IOCR: 

In-Orbit Commissioning Review 

IOV: 

IR: 

LEOP: 

LTDN: 

LTS: 

MTG: 

NPV: 

OLCI: 

In-Orbit Validation 

Implementation Review 

Launch and Early Orbit Phase 

Local time at descending node 

ESA Long term Scenario 

Meteosat Third Generation 

Net Present Value 

Ocean Land Colour Instrument 

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PDGS: 

Payload Data Ground Segment 

PDR: 

PPP: 

PRR: 

QR: 

R&D: 

ROM: 

RR: 

SEIS: 

SRR: 

SLST: 

SME: 

TT&C: 

UVNS: 

Preliminary Design Review 

Public-private partnership 

Preliminary Requirements Review 

Qualification Review 

Research and development 

Rough Order of Magnitude 

Requirements Review (for Data Access) 

Shared Environmental Information System 

System Requirement Review or (for Data Access) System Readiness Review  

Sea and Land Surface Temperature 

Small and medium-sized enterprise 

Telemetry, Tracking & Command 

UV/VIS/NIR/SWIR (Ultraviolet/Visible/Near Infrared/Short Wave Infrared) 

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