UK Space Regulatory Review – the way forward for UK regulation?

Background

In issuing its UK Space Regulatory Review in May 2024, the then UK Government set out its core principles on creating and operating a clear and effective framework of space regulation. The aim: to support the nation's space sector (and beyond) for the years to come and deliver on the UK's ambition to enhance its share of the global market in space.

A primary objective of the Review is to provide an assessment of the Space Industry Act and the current licensing regime. This builds on stakeholder engagement across the space and satellite industry, as well as from the defence, finance and insurance sectors.

Why a Review is Needed

A number of key drivers for the Review are highlighted.

First, being ready for the future. Given the rapid evolution of the space sector, regulation must keep pace with technological and commercial advances. Indeed, the Review cites estimates of £108 billion in space investment by 2032 and more than 400 lunar missions planned in the next decade.

Secondly, building a sustainable space environment. Regulation plays a critical role in ensuring a sustainable environment, trying to minimise space debris and congestion, as well as ensuring the capability of surveillance technology to track debris.

Thirdly, a thriving space sector promotes economic growth and foreign direct investment, and should be supported by an attractive regulatory environment for investors.

Priorities for Action

Drawing on the analysis, the Review identifies four key priorities:  the need for clarity, certainty, confidence, and competitiveness in the sector.

Improving regulatory clarity will deliver a collective understanding amongst regulators, industry players and academics. This will include publishing clear information on the roles and responsibilities of relevant government bodies, clarifying government policy and priorities in emerging priority areas such as artificial intelligence and quantum technology.

The Review acknowledges that the revised approach must not undermine flexibility in the regulatory framework. Given the rapid changes in the global landscape, with established and emerging markets expecting operators to prove their commitment to space sustainability, the UK will strive for certainty by spelling out its strategy in the sector and developing clear policies to provide confidence to potential investors.

In addition, the objective is to craft an effective framework supporting opportunities for a competitive market. This will entail balancing the needs for flexibility to encourage innovation, but not at the expense of protecting the space environment for all. Interestingly, the UK government will look to reward responsible space players by linking sustainable practices to investment opportunities through incentives.  

Finally, the Review highlights the desire to create international partnerships, working with other leading nations in the field to build an alliance focused on space regulation. This will involve developing best practice principles with partners, agreeing approaches to link domestic initiatives to secure broader global adoption, and maximising UK leadership in international fora such as COPUOS.

Next Steps and Timelines

Among the key recommendations are:

• Cross-Sector Implementation Team: Establish a team facilitated by the Department for Science, Innovation and Technology, accountable to the National Space Board, to oversee workstreams for each priority outcome.
• Partnerships: Collaborate with industry bodies, finance experts, scientists, academics, and international partners to design optimal conditions for space regulation.
• Governance and Resources: Balance ambition with capacity to deliver, ensuring value for taxpayers and the sector through clear, planned steps.
• Phased Approach: Implement recommendations in three phases: assessment and prioritisation, action plan design, and action plan delivery. The timeline aims for implementation through 2024. However, the recent UK general election and the advent of the new government may mean that, assuming there is no change in the underlying policy approach, the timing may become more extended.

Commentary

This Review is welcome in flagging many of the most important issues facing the sector globally, and the UK space industry, in particular. Achieving a clear, consistent and efficient regulatory landscape will be key to the continued growth and effectiveness of the UK space sector.

By supporting the ambitions of the space industry and other stakeholders, and realising the vision for an efficient regulatory process, the UK can secure and expand its role as a leading space nation. The vital element will now be translating the principles into effective and efficient practice.

Importantly, the Review flags the need for close collaboration with the investor and insurance communities. These stakeholders will be keen to see how far the Review leads to real clarity and consistency in the regulatory landscape – a vital element in unlocking the future financing of the sector. In addition, delivering a proportionate and transparent regulatory framework should enable innovators and their investors to support R&D and market development. So the headlines are encouraging.

However, some big questions remain. Will we see a new regulatory settlement which genuinely supports the UK's leading space innovators in seizing the opportunities for growth in the current space markets, the emerging lunar economy and beyond? Will the valuable principles in the Review be translated into efficient and accessible licensing practices? How far will the new frameworks enable growth and encourage investors to support this thriving industry more widely? As ever, the devil will be in the detail.

Perhaps most significantly, will this new regulatory landscape be readily supported by the incoming UK government, enabling effective implementation of the vision spelled out in the Review? So industry will be keen to see how the new government approaches space sector regulation as part of its broader engagement with the sector and, if the proposed new regime is adopted, how quickly it is rolled out.