One Small Leap: Clyde & Co Space Bulletin - January 2024
Market Insight 23 January 2024 23 January 2024
Aviation & Aerospace
At Clyde & Co we are proud to be one of a handful of law firms that have been instructed over the years to assist on various satellite and space matters. Our instructions have ranged from matters relating to a Space Shuttle loss, way back when, to recent issues related to in-orbit anomalies and losses. We have been at the forefront of providing legal advice, both non-contentious and contentious such as the provision of contractual licensing, regulatory and policy interpretation advice, to commercial and finance needs and finally disputes and dispute resolution.
23 highlights of space-related happenings in 2023
2023 has been a busy and exciting year in the space industry. We have seen developments in many important areas of space including the return to the Moon with India’s Chandrayaan-3 which landed on the south pole of the moon. There was the successful launch of the ESA JUpiter ICy moons Explorer (JUICE) in April whereby ESA in partnership with NASA has embarked on a mission to study Jupiter’s moons Ganymede, Callisto and Europa in search of liquid water from 2031. Policy makers and governments around the world were also active in instigating various space law consultations, all with a view to try and grapple with some of the thornier issues facing the space sector. For example, proposals regarding how we access space and in-space activities under the “big tent” topic known as Space Sustainability have been put forward. Additionally, regulators are increasingly noting that space situational awareness is becoming an urgent issue to be resolved. If not there is a real risk that LEO and MEO orbits may become unusable. Consistent with this theme, we also saw the first fine levied on a satellite operator for littering in space!
Below we set out our choice of highlights from 2023 space-related happenings which we consider demonstrate the dynamism of the current space industry.
Legal and regulatory
1. The Government of Canada invited submissions from Canadians in respect of their views on Canada’s regulatory framework. The consultation process ran from 31 January 2023 to 4 April 2023 and was designed to help inform the review that is already underway regarding Canada’s regulatory space framework. The high-level conclusions were as expected, in that there were calls to modernise the regulatory framework in order to provide more legal certainty. However, there was also the pragmatic suggestion that any updated regulatory framework must be drafted in such a way as to provide both certainty and flexibility, in order to keep the regulatory framework relevant for the future and thus keeping Canada competitive.
2. In late 2023, The US Senate unanimously passed Bill S.4814 (117th), known as the “Orbital Sustainability Act of 2023 or the “Orbits Act 2023” the primary focus of which is to reduce space debris and promote safe space activities in both low earth and nearby orbits. The two key features of this Bill were: firstly, mandating a publicly available, non-classified, “list of orbital debris deemed to pose immediate risk to the safety and sustainability of orbiting satellites and on-orbit activities”. Secondly, the development of a competitive award program concentrating on technologies to identify and actively remediate space debris.
3. In October 2023, the US Federal Communications Commission (FCC) levied a fine of US$150,000, on the Satellite operator DISH Inc for failing to adhere to its disposal requirements in relation to its Geo satellite EchoStar-7. This is reportedly the first fine of its kind levied against an operator for littering in outer space (breach of debris mitigation obligations). The quantum of the fine is ‘de minimis’ and this we understand is because DISH did make some good faith efforts to comply with its licence requirements to put the satellite into its graveyard orbit but failed. The fine is nevertheless clearly designed to send a message to operators that the FCC is serious about enforcing its sustainability rules. It is also noteworthy that DISH was also required, we understand, to admit liability and going forward they will also be subject to more stringent audits in respect of their disposal plans.
4. On 20 December 2023, during the meeting of the National Space Council, the White House released a policy framework on mission authorisation and continuing supervision. The framework will serve as guidance to the Commerce and Transportation Departments the aim of which is to “better prepare for and shape the future space regulatory environment”.
UK and Europe
5. The EU commenced consultations on various legislative initiatives, such as the potential creation of a uniform EU space law, which closed on 28 November 2023. Additionally, the EU Council approved the first EU Space Strategy for Security and Defence and released statements of its intention to undertake future legislative initiatives in relation to a range of space activities (e.g. space traffic management, sustainable uses of space).
6. The European Space Agency (ESA) published a world-first Zero Debris Charter which is their internal standard intended to significantly limit the production of debris in Earth and Lunar orbits by 2030.
7. Italy, Netherlands and Austria joined the Anti-Satellite Ascent Testing ban, following the US lead, and pledging not to perform destructive, debris-spawning satellite tests.
8. The UK Space Agency launched a consultation regarding introducing variable rather than fixed liability limits for satellite operators. Currently, operator liability, following an incident in space, is fixed at 60 million EUR. There are also planned discussions regarding refunding licence fees for those that engage in sustainable practices.
9. The UAE has announced that it will release an updated version of its space law in the first quarter of 2024. The new law is expected to cover important issues such as authorisations and inspections of licensees.
Global / multijurisdictional news
10. The UN COPUOS Legal Sub-committee held its 62nd Meeting in Vienna, in May, and featured debates on how to utilise national policy and regulatory frameworks for space activities to limit space debris, the potential development of a non-legally binding UN instrument to recognise and promote measures to protect designated areas on the Moon and the possibility of initiating discussions on legally binding instruments for the implementation of the guidelines for the long-term sustainability of outer space activities.
11. The 2023 World Radio communication Conference (WRC) was held in Dubai (Nov-Dec) and updates to the Radio Regulations were agreed that will support technological innovation and increase access to and equitable use of radio resources.
12. The following countries set out their space policy agenda in 2023 in the form of new space policies and laws:
- Switzerland (Federal Space Policy)
- Slovenia (Draft Space Strategy)
- India (Space Policy)
- Ghana (Space Policy)
- New Zealand (Space Policy)
- Azerbaijan (Law 16:45 on Space Activities)
- Germany (New Space Strategy)
- Italy (Space Strategy)
13. The US, UK and Australia entered into an agreement on deep space radar. As part of the trilateral security partnership known as “AUKUS”, a network of three space-tracking radars will be set up in each country, with sites constructed in each by 2030.
14. In January 2023, Japan and the USA entered into a framework agreement for space covering a broad spectrum of activities between the countries, including space science, earth science, space operations, technology and safety.
15. UNIDIR (United Nations Institute for Disarmament Research) published a much needed Lexicon for outer space security seeking to facilitate a shared understanding around frequently used terminology. Helpfully, the approach adopted by UNIDIR is not to establish universal definitions for all, but rather for the lexicon to be used as a reference aide to clarify the interpretation of key concepts.
The Moon and other celestial bodies
16. The Kingdom of Saudi Arabia formally resigned from the Moon Agreement in support of the Artemis Accords. New joiners to the Artemis Accords in 2023 include:
- Czech Republic
17. In an historic first, India’s Chandrayaan-3 moon landed near the south pole of the moon in August 2023. It is noteworthy that the mission costs were reported to be in the region of around $74 million which is considerably cheaper than other recent comparable missions such as those undertaken by Russia and NASA. It is reported that one of the reasons why the mission costs were so reasonable was because India, as it did with Chandarayaan-2, did not rocket directly to the Moon (a journey of 3-4 days) but rather used the Earth and Moon to propel and grab the spacecraft by undertaking ever wider orbits around Earth to gain speed which then propelled the space craft towards the Moon where it was then captured by the Moon’s gravity. This process took around 30 days.
Spaceports, companies and launches
18. A number of countries have announced their intention to build and develop new spaceports, the success of which will diversify how and where launches occur:
- Djibouti signed a Memorandum of Understanding with Hong Kong Group to build seven satellite launch facilities and three rocket testing pads.
- Oman announced it is building the first Middle East spaceport.
- Norway opened its Andøya space port in November 2023.
- SaxaVord, the UK’s first vertical launch spaceport, was granted its licence in December 2023.
19. The Spaceport Company demonstrated offshore launch capabilities from floating platforms on US territorial waters.
20. Virgin Orbit’s LauncherOne rocket represented the first launch from Spaceport Cornwall in the UK.
21. Virgin Galactic made its fifth successful suborbital flight.
22. Project Kuiper’s protoflight was successful (launched with ULA Atlas 5).
23. The US Space Force, in pursuit of its National Security Space Launch Phase 2 (NSSL) goals, assigned 11 launch missions to United Launch Alliance (ULA) and 10 for SpaceX. All these launches are expected to take place over the next 2-3 years. It is expected that the NSSL program will, over the next 5 years, require around 48 launches most of which are to carry US military satellites.
2024 - Insurance in focus
The space insurance market ended 2023 with significant claims arising from several missions, with two satellite claims making up a substantial chunk of those claims namely Viasat-3 and Inmarsat-6 F2 both reportedly suffered in-orbit problems. The claim losses across the market are estimated to be in the region of $800 million. The effect of these unexpected claims was an increase in premiums “signalling a market-wide revaluation”.
It is also noteworthy that in late 2023, BRIT exited the direct space insurance market possibly leaving a capacity gap going into 2024. This is not the first departure, in 2019 Swiss Re left the space underwriting market. The 2024 forecast is currently described as “uncertain” mainly because further significant losses are anticipated and if they do materialise premiums may increase further. In parallel, the industry is expected to keep growing, with further private launches and project announcements expected.
We head into this new year with an optimistic but cautious mindset, noting that 2024 is likely to be a critical year for the space industry in more ways than one. Watch this space…
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