Written evidence submitted by the Department for Science, Innovation and

Technology & Scotland Office – (SSS004)

Introduction

The Department for Science, Innovation and Technology (DSIT), the UK Space Agency (UKSA) and the Scotland Office are jointly submitting evidence for the Scottish Affairs Committee follow up inquiry into Scotland’s space launch sector, as the leading organisations for the UK space sector in terms of high-level policy, strategy and delivery.

DSIT is the UK Government department that leads on civil aspects of space and in 2021 developed the National Space Strategy. The DSIT Space Directorate has dedicated teams working on priority areas such as Strategy, Skills, Launch, Regulation and Sustainability and Regional Growth. The UKSA is an executive agency, sponsored by DSIT, responsible for the UK’s civil space programme. The UKSA plays a major role in delivering the UK Government’s National Space Strategy and its role is to catalyse investment into the UK space sector, deliver missions and capabilities and champion the power of space to inspire people, offer greener, smarter solutions and support a sustainable future.

The Scotland Office supports the Secretary of State for Scotland in promoting
the best interests of Scotland within a stronger United Kingdom.

Q. What are the current key opportunities and challenges for Scotland’s space launch sector?

• The Government is committed to making the UK a nation that regularly launches rockets into orbit, using both British and foreign manufactured launch vehicles. As home to SaxaVord Spaceport, the only multi-user spaceport in Europe, and two rocket manufacturers, Orbex and Skyrora, we recognise the significant opportunity that Scotland’s launch sector will play in developing Government’s ambitions for launch.
• An independent launch capability will enhance national security, given the critical importance of space for both civil and defence uses. Without access to space, we will be entirely dependent on the capacity and consent of other countries.
• Having a UK launch capability is a significant part of the UK contribution to European access to space and provides opportunities to collaborate with international partners including ESA members, EU Member States and NATO allies, enabling them to launch from European soil, meaning satellites can be launched closer to where they are manufactured.
• The UK has a once-in-a-lifetime opportunity to harness our budding launch startups and unique geography to secure our future and become a major space nation. The global demand for commercial launch significantly outstrips supply. The backlog for rideshare on a SpaceX launch vehicle, for example, can be over two years, and the only operating European launcher, Ariane 6, is at full capacity until 2028. While the majority of the demand for launch consists of mega-constellations and is largely captured, there is still a significant addressable market opportunity for the UK. 
• Unlike traditional launch sites located near the equator, sites in the north of Scotland gives the opportunity to launch satellites into polar orbits. This enables coverage of the Arctic region, an area of growing national security and economic interest.
• UK launch companies are already attracting investment from across the globe, creating high-value jobs and stimulating growth across the whole space sector. This economic opportunity is set to grow: market intelligence suggests that European operator demand for satellites up to 2033 is forecasted to be worth $50 billion. By way of example, capturing even 2% of this represents $1 billion in revenues for a UK launch. 
• There are a number of European launch startups seeking to enter the market over the next few years, many of which are supported by substantial government funding. Our expectation is that the European launch market is likely to consolidate around a small number of key players within the next five years.
• The European Space Agency’s (ESA) European Launcher Challenge (ELC) will provide competitive launch contracts to up to four European launch providers to mature current technology and develop larger launch vehicles to service future European institutional demand. The Government recognises the opportunity provided by the ELC for UK launch companies and we will be interested to see who applies and who is selected by ESA. Decisions on UK participation in the ELC will form part of the ESA Ministerial Council (CMIN25) negotiations in the Autumn. 
• The UK has also recently signed up to NATO’s Starlift project which will explore opportunities for responsive launch from allied nations, and facilitate the use of spaceports across the alliance. As one of the two nations in NATO with a licensed European Spaceport, we are exploring options to enhance our industrial capability and assured access to space.

Q. How can Scotland’s launch capabilities be developed for the future?

• The immediate priority for the Scottish launch sector is to achieve successful launch to orbit through small-lift launch vehicles. This is why the Government has made significant investments to support this, including £10 million provided to SaxaVord Spaceport to support RFA to launch from the site, and £20 million to Orbex this year to support the development of their small-lift vehicle Prime ahead of a planned launch from Saxavord.
   
• In the longer term, the European launch market is likely to shift towards larger “medium-lift” launch vehicles capable of launching greater total payloads, and at a more competitive price point per kilogram. While we expect there to be sufficient demand for small-lift launch to sustain the Scottish launch sector, in order to truly capitalise on the potential market opportunity, Scottish launch companies are already looking to upgrade their launch capacity.
   
• ESA’s ELC is likely to be instrumental in supporting European launch providers to increase their capacity to medium-lift launch vehicles, and UKSA are engaging with Scottish launch providers who are interested in applying for this programme. Whether the ELC will provide opportunities for Scottish spaceports is still unclear.
• We are also seeing increasing interest in the concept of “responsive launch” i.e. the ability to deploy satellites into orbit at extremely short notice, with particular applications in the defence and security sectors. While considerable technical progress needs to be made for the Scottish launch sector to develop this capability, Government is engaging allied nations, in particular through NATO, to ensure that Scotland is able to access opportunities for responsive launch missions in future as the technology matures.
   
• The Government also recognises that there is a skills gap in the Scottish launch industry, as is the case in much of the space sector. This includes highly specialised technical skills such as launch vehicle assembly, integration and testing and composite flight structure design, analysis and manufacturing, and a lack of people with practical experience of rocketry propulsion and system integration. We are investing to address the UK’s launch skills gaps, by funding rocketry PhDs, and we have set up a rocketry competition grant fund. UKSA has undertaken a range of education-focused initiatives to inspire the next generation of space professionals, such as the 2023 Space For Everyone replica rocket tour which engaged over 160,000 young people.

Q. How does Scotland’s space launch sector compare with European and global competitors?

• Scottish companies are developing both spaceport and rocket manufacturing capabilities. This, combined with a strong satellite manufacturing sector gives us the opportunity to develop a convenient end-to-end offer for customers to design, build, launch and operate satellites from the same country.
• Apart from SaxaVord, there is only one other licensed vertical orbital spaceport in Europe – Andøya Spaceport in Norway. As with SaxaVord, Andøya will facilitate “small-lift” launches that can carry payloads of under 1,500kg to Low Earth Orbit. SaxaVord is looking to develop three launchpads, with the second due to complete this year.
• SaxaVord was the first European vertical spaceport to receive its operating licence and to commence on-site engine testing. Although an anomaly with RFA’s testing has pushed back their first launch date, the site is ready to launch.
• SaxaVord has the potential to be the busiest spaceport on European soil for the specific type of launches which are currently feasible from Europe i.e. small-lift launch into high-inclination orbits. Some other major spaceports e.g. Korou in French Guiana or Cape Canaveral in Florida, are designed to facilitate launches of heavy payloads, including into lower-inclination orbits. Larger launch vehicles offer a more competitive price point, but can mean customers have little choice about the timing or specific orbit for their payloads. For this reason, we expect there will remain a reasonable market share for small-lift launch for the foreseeable future. Launches into lower-inclination orbits are unlikely to be competitive from Europe as launching as close as possible to the equator makes use of the Earth’s higher rotation speed at these latitudes which reduces the amount of fuel needed to reach orbit.
• Scotland’s two rocket manufacturing companies, Orbex and Skryora, are both developing small-lift launch vehicles and targeting first orbital launch in the near future. The European landscape for launch operators is competitive, with a number of European rocket manufacturing startups seeking to launch over the next few years. However, Scottish companies are among the frontrunners in terms of both investment raised and readiness for launch.
• In future, Orbex, like many other European rocket manufacturers, intend to develop a larger “medium-lift” launch vehicle, capable of delivering larger payloads into space, which will allow them to capture greater market share due to the more competitive price point. They also plan to launch this vehicle from equatorial launch sites, in addition to Scotland, to enable them to access lower inclination orbits.
• All countries with a domestic launch capability have required significant state support, and the Scottish launch sector is no different. The UK Government has invested around £97 million in the Scottish launch sector, with a further £37 million invested by the Scottish Government. While total public investment figures from competitor European countries cannot be verified from publicly available information, we have seen competitor countries announce similar or greater investment into their launch sectors. Government investment into the European commercial launch sector is significant below the scale of that in the United States, where companies such as SpaceX have received public funding totalling in the billions of dollars, primarily through government launch contracts.

Q. What strategies can Scotland’s space launch sector use to differentiate itself and stand out from competitors, both in the European market and on a global scale?

• Scotland’s potential to provide a complete end-to-end launch offering unique in Europe means it has a unique opportunity to stand out in the global market. Scotland has a strong small satellite ecosystem, both in manufacturing and operations, which has attracted launch service providers. The convenience will be an attractive unique selling point to customers, but will not be enough to ensure that the Scottish launch sector is competitive internationally.

• It is essential that the Scottish launch sector is able to compete internationally on price. Research and engagement with industry has shown that price is the most important, although not the only factor that customers consider when deciding where to launch. This does not necessarily mean that Scotland must be the cheapest, but it cannot afford a substantial gap to lower priced alternatives on a like-for-like basis i.e. same orbit and similar service offering.
   
• Launch from Scotland has the potential to provide logistical benefits for UK and other European customers which make Scotland a more attractive destination for launch. Scotland’s close proximity to the European space market provides an attractive launch alternative to existing global options.
   
• The UK has put in place a modern legal framework via the Space Industry Act and a regulator (Civil Aviation Authority) designed for the new commercial space age, with no charge for a launch licence.
   
• Having multiple launchpads and active launch operators available means that Scotland provides a range of options to organisations considering launch from Europe. There are significant differences in the offer from the various providers seeking to launch from SaxaVord e.g. the payload capacities of Orbex’s Prime rocket and RFA’s One launcher vary by almost an order of magnitude. Having a variety of launch operators present in Scotland will likely increase competitiveness and consequently drive down prices.
   
• The Scottish launch sector needs to demonstrate technical proficiency early on. This does not necessarily mean being the first country in Europe to successfully deploy satellites into orbit, but operators launching from Scotland cannot afford to fall significantly behind European competitors in their technical milestones, otherwise they risk being out-competed. Our research has found that most customers want to see a track record 3-5 successful launches to have confidence in an operator.

Q. How can Scotland’s spaceports ensure a sustainable long-term pipeline of launch activity, and what should government’s role in this be?

• In order to secure a long-term sustainable pipeline of launches, the Scottish sector will need to become competitive in the above factors, particularly price and technical reliability.
   
• Rather than the Government directly owning and managing rocket launch attempts, Government is supporting a commercial approach to building launch heritage following the US SpaceX model, i.e. enabling commercial providers to build the technical experience and learning from the first launch attempts that are most prohibitively costly and with highest risk of failure.
   
• While the UK and Scottish governments are highly unlikely to provide sufficient demand to sustain the Scottish launch sector in and of themselves, the Ministry of Defence (MoD) supports the UK’s launch ambitions and works closely with allies and partners to assure appropriate and timely access to space. Two defence payloads were on board the Virgin Orbit launch from Spaceport Cornwall, and a further defence payload is planned for a Government pathfinder launch from SaxaVord Spaceport.
   
• The ELC has the potential to be largest source of institutional demand for Scottish launch. UKSA is representing our national interests in discussions with ESA counterparts and advocating within Government for the benefits of UK participation.
   
• Launch operators are already considering or preparing proposals for development of a medium-lift rocket, and the UKSA has already received proposals and representations from prospective ELC applicants. Alongside offering support of written proposals, UKSA is able to support operators with bid-writing training.
   
• If prospective ELC applicants seek to engage with the UK or European supply chain, partners, investors/decision makers in preparing a bid the UK may organise or support meetings or events for that purpose. UKSA is happy to consider requests to provide letters of support to encourage attendance or engagement at such events.
   
• The Department for Transport and the Civil Aviation Authority continue working to ensure that the UK’s regulatory regime is fit for purpose and competitive internationally, while ensuring that standards of safety are maintained.

Q. To what extent is the UK Government gearing itself to take full advantage of the potential of Scotland’s space launch sector?

• The Government is committed to enabling a Scottish launch capability that delivers benefits to the whole of the UK. Our ultimate ambition is to make the UK one of the best places in Europe to launch rockets from.
• Scotland’s geography provides unique and easy access to high-inclination orbits that cover the Arctic region, particularly valued by earth observation and communications satellites, which offers a significant opportunity for UK launch. It has huge potential from a diverse space ecosystem, with Glasgow being the leading city for satellite manufacturing in Europe.
• These advantages are already attracting investment from across the globe, creating high-value jobs and stimulating growth across the whole space sector, and the economic opportunity is set to grow, with European operator demand for satellites set to increase significantly.
• We are proactively supporting this opportunity by investing over £30m and working closely with launch companies to deliver the first Scottish launches, which will build private investor confidence by demonstrating technological readiness.
• Orbex’s launch will be the first orbital launch conducted by a Scottish launch operator using a Scottish-manufactured rocket from Scottish soil. This is significant, as the Government wants to promote the UK as a great place to manufacture rockets and support high-value British jobs.
• The £20 million investment in Orbex will provide a host of economic benefits to Scotland, firstly by supporting 140 highly skilled jobs in Forres, with many more anticipated as the company continues to grow. Much of the value of launch stems from the manufacturing of the rocket. Because of the specialist skillset needed – from engineering and technical jobs that require specialist knowledge in software, avionics, and carbon fibre structures – the company has attracted some of the most qualified individuals in the world, with employees coming from 27 nationalities.
• The UK is supporting the Scottish launch sector through participation in NATO’s Starlift Programme. This is an opportunity to collaborate with our Allies on launch capabilities and we are keen to promote the UK’s emerging launch activities including spaceports and rocket manufacturers. 
• UKSA is supporting the development of Scotland’s space ecosystem by investing in its not-for-profit sector development body, Space Scotland. This includes programmes that equip the nation’s space workforce with the expertise and skills they need, and is unlocking new market opportunities for space with adjacent industries like FinTech, AgriTech, and Robotics.

Q. To what extent does the UK Government’s National Space Strategy align with the priorities and needs of Scotland’s launch sector?

         The aims and ambitions of this Government align with the priorities and needs of Scotland’s launch sector. We are committed to making the UK a leading provider of small satellite launches in Europe, working in collaboration with our European launch partners to ensure an effective launch capability. These aims were reiterated more recently in the Space Industrial Plan, published 7 March 2024, which highlighted how our spaceports have brought inward investment to Scotland, where launch operators like Orbex and Skyrora have established their headquarters. The Government supports the ambitions of these companies to grow and export from the UK.

         The steps taken so far have established an environment that will promote sustainable growth in Scotland, where 12% of space jobs overall are based. Regulations have been put in place, which has enabled SaxaVord Spaceport to obtain its spaceport and range licences, and RFA to obtain its launch licence. The infrastructure and technology are being developed to support the first launches, which is a critical part of launch. These mark significant steps towards developing this strategically and economically important capability.

         Government investments are supporting key companies operating in Scotland as they seek to build and scale up their launch offerings. SaxaVord is preparing to host their first launches following the Government’s £10 million investment last year to complete construction. UKSA has provided £3.5 million to RFA through the Boost! programme, to help them develop and operate the infrastructure and test equipment ahead of their launch from SaxaVord. Government has recently invested £20 million in Orbex to support the development of their rocket, as they prepare for their first launch.This funding is intended to solidify the UK and Scotland as a European leader in the space sector.

         A launch capability will enhance the attractiveness of Scotland as an inward investment opportunity as well as helping to accelerate growth within an already successful emerging sector.  

         A thriving launch industry combined with the wider Scottish space sector, will support numerous high skilled employment opportunities across Scotland as well as capturing the imagination of young people of all ages to pursue education in the STEM subjects and subsequent careers in science and engineering.  
 

         The Space Sector Skills Survey 2023 provides a comprehensive mapping of the current recruitment and retention challenges facing the UK space sector. Acknowledging that regional challenges and issues do exist, UKSA already engages locally through the established cluster network to deliver targeted skills interventions. As part of the current Ecosystem Development Programme, Space Scotland is delivering a series of projects that focus on workforce development and includes funding for a range of both short-term and long-term measures.  Outputs so far from this project include: 
 

        Development and delivery of a hands-on programme that allowed school students from remote and underrepresented communities to build their own miniature AmbaSat satellite. 

        Delivery of a Rocketry Academy Course for graduates, providing sought after hands-on engineering skills not provided by academic curricula. 

        A white paper identifying potential future training pipelines and skills needs for Scotland. 
 

         We encourage Skills Development Scotland (SDS) to collaborate with Space Scotland to maximise the impact of this UKSA funded project.

Q. What role can the UK and Scottish Governments play as a customer for launch services in Scotland? 

• The Government is playing an active role in supporting the development of the launch sector, and deliver a capability that enables UK access to space and reduces reliance on international operators. This includes through providing funding and investments to emerging launch providers to deliver the infrastructure and technology required for launch, and through supporting other areas to ensure a resilient capability, such as skills.
• Government’s approach is focused on supporting a commercially sustainable sector, through building launch heritage, i.e. enabling commercial providers to build the technical experience and learning from the first launch attempts that are the most costly and with highest risk of failure. We will continue to monitor that approach and review progress as the first launches are delivered.
• The Government is considering the potential of UK launches for defence and security uses in the future, subject to requirements. MoD provided the Prometheus-2 payload to Virgin Orbit’s launch from Spaceport Cornwall, and are reviewing other opportunities to launch from the UK. This will be judged on a case-by-case basis based on the operational requirements, costs, risks and orbital physics of each payload.

March 2025