The UK’s space industry has experienced exceptional growth in recent years following the implementation of the Space Industry Act 2018. This has prompted the UK Space Agency to undertake a consultation to consider the important policy questions that will dictate how the space industry grows over the next decade.

Ahead of the government’s response to the consultation expected in the new year, trainee solicitor Gemma Laing and senior paralegal Zeenat Hasham consider some of the proposals set out in the consultation. They also highlight the importance of these proposals balancing sustainability and commercial viability to help the UK space industry continue its exceptional growth.

 

The government’s ambitions for the UK space sector

Last year, the turnover of British space organisations grew to £17.5bn, with space exports reaching a staggering £5.9bn. As technology develops, space presents increasing opportunities for commercial and non-commercial activities.

The UK has major ambitions for the space sector and has outlined four priorities for UK space policy, including:

  • Unlocking commercial investment and growth in the space sector
  • Deeper collaboration internationally to enhance space sustainability and security
  • Growing the UK as a science and technology superpower, and
  • Developing resilient space capabilities and services as a key part of the UK science and technology superpower mission.

 

Space sustainability

There are growing concerns about space sustainability as the orbital environment is inevitably becoming congested. The 6th Summit for Space Sustainability, in June 2024, brought together voices from across the world to discuss the global effort to solve the space sustainability challenge, with the UK Space Agency participating in panel discussions at this event. Julia Black, the Director for Discovery and Sustainability at the UK Space Agency, hosted a panel discussion exploring how we can use different commercial partners to open up space exploration to more stakeholders.

The Space Agency’s CEO, Dr Paul Bate, and Richard DalBello from the US Office of Space Commerce spoke at the event about space situational awareness (SSA), which relates to the ability to monitor objects in space and the surrounding environment. SSA is often discussed in the context of collision avoidance and debris generation. In this keynote, Dr Bate highlighted the importance of coordination between the systems in different regions worldwide to improve our SSA.

These conversations built on the discussions addressed by the UK Space Agency in the 5th Summit for Space Sustainability in 2023 about the Space Sustainability Standard (SSS). The SSS was announced by the UK in June 2022 and is being developed by the UK space sector and supported by the UK government. The aim of the SSS is to encourage companies to adopt best practices in space sustainability, which includes incentivising the industry to safely deorbit satellites and make better choices in choosing materials less likely to deteriorate and shed.

The significance of the deorbiting problem can be seen in the developments concerning the International Space Station (“ISS”). In the past year, NASA has developed plans to use American aerospace company SpaceX to develop and deliver the US ‘Deorbit Vehicle’, a vehicle intended to safely deorbit the International Space Station to a remote ocean location in 2031. Other options, including boosting the ISS to a higher orbit, were dismissed due to problems associated with the orbital debris environment. The deorbit must be achieved in a manner that maintains the ISS’s structural integrity in order to avoid a proliferation of space debris and the risk of large parts falling onto populated areas.

The recent consultation undertaken by the UK Space Agency focused on several proposals that address the UK government’s concerns around space sustainability. The proposals aim to promote accessible opportunities in space but in a safe and responsible way. A selection of these proposals is explored in more detail below.

  1. Developing variable liability limits for orbital operations

This proposal is centred around developing a variable liability limits approach to orbital operations.

The Outer Space Act 1986 (“OSA 1986”) exists to ensure UK enterprises comply with the UK’s obligations under international treaties, including conventions about liability for damage caused by space objects. The OSA is the legal basis for regulating space activities carried out from outside the UK by organisations or individuals in the UK. Operators in the UK that want to conduct space activities must obtain an OSA licence.

An OSA licensee has various duties, including holding an insurance policy that indemnifies the UK government. This is because Under Article II of the 1972 UN Convention on International Liability for Damage Caused by Space Objects (“the Liability Convention”), the UK government is liable to pay compensation for damage caused to the ground or aircraft in flight by space objects. If the damage is caused other than to the ground or other aircraft, the UK government is only liable if it can be shown that the government or the persons responsible were at fault (Article III of the Liability Convention).

The Space Industry Act 2018 (“SIA 2018”) provides that all orbital operations will follow the requirements set out by the OSA 1986. Section 10 of the OSA states that any person to whom the Act applies has to indemnify the UK government for their liability under the Liability Convention. Operators must, therefore, indemnify the government for the claims brought against it.

The Space Industry Regulations 2021 (“SIR”) are a statutory instrument created under the SIA 2018. Both the SIA 2018 and SIR were developed by building on the experience the UK gained in licensing satellite operations under the OSA 1986 to enable the UK to carry out launch, spaceport and range control activities. The SIR allows the Civil Aviation Authority to receive applications for orbital activities licences.

Currently, a ‘one-size-fits-all’ approach to licensing is set out in the OSA, whereby standard orbital missions require a flat-rate third-party liability insurance/indemnity limit of €60m as a condition of granting the operation license. This may be higher for higher-risk missions. The insurance may be waived for lower-risk missions, but the €60m indemnity obligation would still apply. The proposed approach seeks to reconsider the flat rate to include a sustainability quotient so that the mandatory insurance minimum can be waived if the particular mission is deemed “sustainable”. The UK Space Agency has consulted on a proposed two-stage method to determine the liability for future missions in this way. This method is summarised below.

Stage 1: Determining the baseline liability limit

This would be based on the proposed activity and the orbit in which the activity will take place. Further work is needed to develop the approach to Stage 1, but the intention would be to determine a baseline liability limit by focusing on addressing two questions:

  • What is the mission categorisation of the applicant’s proposed activity?

Missions would be loosely categorised as either:

  • Standard
  • Constellations (for example, coordinated spacecraft groups)’ or
  • Rendezvous and proximity missions.

The UK Space Agency is undertaking further work to refine these categories.

  • What is the highest indicative sustainability risk category of the intended orbit(s) of steady state operations? (This can include consideration of sustainability risks post-operations).

Sustainability risk would be either low, medium or high.

Again, further work is being undertaken to refine these categories, but the intention is to categorise sustainability risk based on collision risk and other parameters, such as financial risk.

Once the methodology and risk categorisations have been developed, the mission and risk categories would be translated into a baseline liability limit and/or insurance amount. The scoring mechanism would translate to three proposed liability thresholds:

  • Lower risk category – £0 baseline requirement (green)
  • Medium risk category – £20m baseline requirement (amber)
  • High risk category – £50m baseline requirement (red)

The suggestion is that the baseline liability limit would help operators consider the liability implications of their missions as part of their design by providing an overall assessment of the mission’s boundaries.

Stage 2: Sustainability.

This would assess the mission against a number of sustainability aspects, including recognising:

  • Early adoption of regulatory requirements that may become mandatory in the future, or
  • Engagement in behaviours which, while not mandatory for licensing purposes, are being promoted by the UK government as part of the sustainability agenda.

The methodology of this approach needs to be developed, but the current proposal is to have a basic set of ‘yes’/’no’ questions that would score either ‘0’ or ‘1’. These questions would be divided into four criteria:

  1. Minimising risk through satellite and mission design.
  2. Minimising potential debris during operations.
  3. Minimising risk post operations.
  4. Use of third-party providers to reduce risk. (This will only apply to certain mission )

The outcome of Stage 2 would then determine whether the baseline liability limit should increase, decrease or stay the same. A higher score in Stage 2 could mean the baseline liability from Stage 1 is decreased, or vice versa.

This proposal aims to incentivise the reduction of space debris and the resulting impact on the orbital environment from a sustainability perspective. However, given the risks associated with space debris and orbital collisions, this could also help to reduce costs and exposure to operators. In turn, this could bring down the insurance premiums required for missions and ultimately increase the commercial viability of future space operations.

Part 2 of this article will consider the UK’s longer-term plans for space sustainability as a concept and how to balance sustainability with commercial viability.

 


 

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