Will the new Space Strategy help or hinder the thriving UK space sector?
The UK space sector is thriving and has attracted 17% of global investment in space since 2015, second only to the US, according to a recent UK Space Agency PwC report. The government has introduced a refreshed strategy which aims to walk the tightrope of promoting the safe and sustainable use of space while also encouraging innovation and investment in space businesses. The National Space Strategy in Action sets out a huge raft of proposals for revised regulation, alongside some ambitious timelines.
John Worthy, a space expert at European law firm, Fieldfisher, gave his analysis of the 'next steps' proposed by the government.
"As the UK space sector continues its rapid evolution, the UK government strategy focuses on unlocking growth and delivering resilience. This includes dynamic regulation, promoting a Space Sustainability Standard and encouraging finance for space business. All of these are of course complex issues. So how will industry be affected by the new proposals?
Promoting safety whilst encouraging innovation: In refreshing the regulatory space landscape in the UK, the UKSA needs to maintain a delicate balance. Key to this is promoting safe and responsible use of space, while also encouraging innovation and investment in space businesses, which will contribute to the ongoing expansion of the UK space economy. The space industry will be hoping the regulators have taken on board the dangers of cumbersome regulatory processes, as flagged by the recent House of Commons Committee report. If the UK is to realise its ambitions in space, as mapped out in the Strategy (with so many new opportunities building on leading UK technologies), the baseline of a clear and efficient regulatory licensing process will be fundamental, alongside the need to promote responsible use of space.
A tidal wave of regulation on its way: In this latest plan, the government has set out a huge raft of proposals for revised regulation, alongside some ambitious timelines. Changes are slated across liability and insurance, licence fees, sustainability, constellations and Active Debris Removal, all by the end of 2023. Others will follow in the coming years. The UKSA consultations over the coming months will enable space industry to digest and respond to the proposals and contribute to the process. Given the likely impact of the new policies, industry will be keen to take this opportunity to steer the thinking towards a clear regulatory environment which sets achievable standards and encourages innovation. Whatever comes out of the current legal refresh will be in place for some years to come, so it is vital to strike the right balance.
Streamlining complex licensing rules: Among other issues, the UKSA aims to respond to the pointed comments from the recent House of Commons Science, Innovation and Technology Committee report directed at some of the features of the space licensing regime. That regime was brought in to govern the launch of satellites from UK soil, such as the Virgin Orbit mission from Newquay in January. However, the MPs found that, as a result of insufficient coordination between the multiple regulatory bodies involved in launch licensing, there is an unnecessary burden on space companies. So they recommended improving the interfaces between the various regulators and carrying out regulatory processes in parallel rather than sequentially, to reduce the risk of delays. Space launch businesses in particular will be looking closely to see how the policy refresh responds to the MPs' comments.
In creating the new regulatory environment, the government will also carry out a broader review of orbital regulation, which will impact on all UK satellite operators. It will also aim to reduce the effects of duplicated regulation for operators who are regulated by the UK and another country in parallel. Among the big questions for industry are: how far will this lead to a streamlined licensing process; and how will this review impact on current pending licence applications, which may have been prepared to align with the (potentially more demanding) current processes?
Making space sustainable: In the new round of policy, there will undoubtedly be a greater emphasis on sustainability of space – ensuring that defunct satellites and space debris do not prevent effective use of space for future generations. This is one of the most pressing challenges for space globally. The UK has set out its stall by planning a new Space Sustainability Standard, designed to set world-leading requirements for reducing space debris and managing the removal of disused satellites which can interfere with other space users. Among other objectives, the standard is intended to enable better insurance risk analysis and support insurance for low earth orbit (LEO) missions and facilitate investment in space companies.
Just as we have seen over recent years in the debates around upgrading environmental regulation on earth, the key will be to promote sustainable use of space without adding unnecessarily to the compliance burdens. Setting the bar too high may simply encourage space businesses to relocate to countries with more achievable standards. Setting it too low will exacerbate the problem of space debris.
Importantly, the UK has some of the world's leading players focussed on solving the problem of space debris. They will be keen to understand how the new guidance on in-orbit servicing and manufacturing (IOSM) and active debris removal (ADR), due in 2024 and 2025, impacts on their operations. More pressing is the question how far the wait until the new regime is issued leads to a risk of holding back IOSM and ADR companies in the meantime. These businesses will want assurances that their activities will not be disadvantaged by regulatory uncertainty or, indeed, the possibility that licensing may become simpler, with benefits for later applicants. A new model for financing space business? The latest UK proposals include creating a Space Venture Capital Framework, designed to focus venture capital investors (VCs) on the opportunities in the UK space sector. While the detail of the new Framework is limited at present, it will aim to identify the priority areas for investment and support investors in showcasing the sector, as well as providing support and analysis to certain prioritised investable companies. In addition, the plan will aim to encourage more VCs investing in space to be based in the UK.
This initiative will be welcomed by many across the industry who have been calling for greater VC investment in space. What remains unclear at present is how the prioritised investable companies will be selected and how the engagement with VCs will be orchestrated. We look forward to seeing how this new concept will help attract financiers, both UK and overseas, to invest in innovative UK space ventures and act as a catalyst for sector growth."
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