UK Space Agency launches consultation on variable liability limits for orbital operations

14 September 2023

The proposals from the UK Space Agency follow a review into the UK’s approach to setting the amount of an operator’s liability in licences for orbital operations, a key commitment of the government’s National Space Strategy. The consultation on the proposals focuses on how the government intends to implement its new approach to setting variable limits of liability to support the needs of satellite operators.

The proposal is to adopt the new variable approach with different amounts of liability for different missions - as opposed to the current ‘one-size-fits-all’ approach of a flat-rate amount of €60 million. The consultation is also seeking views on refunding licence fees for companies that commit to sustainable practices - reflecting the importance of keeping space safe and secure for current and future generations.

George Freeman MP, Minister for Space at the Department for Science, Innovation and Technology, said: The Space & Satellite sector is delivering huge benefits to us all – from high-speed internet to monitoring climate change – but launching satellites is still too expensive, risky & hard to finance.

That’s why as Minister for the Civil Space sector I’m reforming the regulatory framework to give responsible satellite operators better licensing, insurance and financing.

Today’s proposal to adopt a flexible new liabilities framework will help us grow the City of London as a global hub for commercial satellite licensing, financing and insurance - while incentivising companies to build sustainability into the DNA of the new space economy.

Dr Paul Bate, Chief Executive of the UK Space Agency, said: This consultation is an important step forward for the space sector as the proposed changes will reduce the risks associated with satellite operations and promote safe and sustainable practices. This in turn will reduce insurance and regulatory costs for operators, and support our work to catalyse investment into the UK space sector by improving access to finance.

We want the UK to continue to be a world leader in space sustainability which is why this consultation looks at ways to encourage satellite missions to protect the space in which they orbit.

Under the UK regulatory regime for satellite operations, each licence granted to a satellite operator contains a designated amount for the operator’s liability to cover costs arising if an incident, such as a collision, involving their satellite were to occur. Satellite operators are required by licence conditions to insure themselves against these costs to meet their obligations to indemnify claims made by third parties against either the UK government or the operators themselves. 

The consultation will also help inform government policy on a range of areas relating to longer-term space sustainability. Another of the key proposals in the consultation is for the UK government to develop a space sustainability roadmap out to 2050 and beyond.

This would support the extensive work of the UK government and the wider space sector on the issue of space sustainability. In particular, the government is supporting the on-going work of the Earth & Space Sustainability Initiative (ESSI).

ESSI is an industry-led initiative funded by the UK Space Agency that is developing new sets of Space Sustainability Principles. The aim is to support the establishment of global and transparent Environmental, Social and Governance (ESG) Space Sustainability Standards, which are recognised by the finance and insurance communities and by policy makers around the world. Further engagement with the insurance and finance sectors and the development of the Standards is underway. 

Joanne Wheeler, Director of ESSI, said: The benefits we derive from space are too large to be undermined by neglect for the space environment. The research being carried out by ESSI will allow us to understand what space sustainability looks like, how it can be evaluated in an objective way, and what steps can be taken with the finance and insurance communities, industry and stakeholders across the world to promote space sustainability.

The changes proposed in the consultation contain measures which could reduce the regulatory cost-burden to industry. The consultation provides an update on the government’s assessment of three possible alternative ways to insure an operator’s third-party liability requirements set out in UK licence conditions for orbital operations. This includes a proposal from the Satellite Financing Network to establish a sector-led mutual, which was provided in response to the call for evidence issued to inform the liability and insurance review.

Following the end of the consultation, the government will issue its response to the consultation to reflect the feedback received and will implement the recommendations as soon as possible thereafter. 

The consultation is available for 12 weeks.