Yes that would be correct, you would need three physical dimensions in a 3D space to know the position of something. In this case, what the European Space Agency means when they say they're using time as the third dimension is that the further an object is from Earth, the further back in time we are looking. This is because the further something is from Earth the further the light has to travel to reach us. So we are seeing these very distant objects as what they looked like millions or billions of years ago, while we would see an object much closer as it looked only a couple hundred to thousand years ago. In that sense, the Z axis becomes "time."