Written Evidence Submitted by the UK Civil Aviation Authority (CAA)

(SPA0014)

Introduction

  1. The UK Civil Aviation Authority (CAA) welcomes the Science and Technology Committee’s inquiry into the UK’s space strategy and satellite infrastructure. The UK has the chance to be at the forefront of new UK launch, satellite development, build and operations. This is, therefore, an important and timely inquiry.

 

  1. The draft Space Industry Regulations 2021 (The Spaceflight Activities (Investigation of Spaceflight Accidents and The Space Industry (Appeals) Regulations 2021) are currently before Parliament and within these regulations the CAA would become the sole safety regulator for the space industry in the UK. We have been developing and implementing comprehensive plans for this eventuality over the course of the last 18 months and are ready to stand up as a fully operational regulator by summer 2021, should Parliament approve the secondary legislation.

 

  1. It is in this context – as the UK’s future space regulator – that we are responding to this inquiry. While the inquiry’s terms of reference are broad, our submission focusses on the areas where the CAA currently, or may shortly, have core responsibilities. Namely:

 

 

  1. In developing this regulatory function within the CAA, we are working in lockstep with the Government – in particular, the Department for Transport (DfT), the Department for Business, Energy and Industry Strategy (BEIS), and the UK Space Agency (UKSA) and its LaunchUK programme. The UK is well-placed to capitalise on the growth of the space sector, with the right geography, business environment and a thriving industry all underpinned by a safety regulatory regime that has high standards of public protection, while being proportionate and enabling innovation.

 

Benefits of the incoming regulatory regime

  1. As the potential future safety regulator of the industry, the CAA wants to see the space sector thrive. We therefore welcome the secondary legislation that the Government has developed which will underpin the regulatory framework for the sector. The UK Government, through BEIS and the UKSA, will continue in its role setting the overarching strategy and policy framework for the UK space sector, and will provide support and encouragement. DfT and BEIS will be the respective Government sponsors of the legislative and regulatory framework under the Space Industry Act 2018 (SIA) and Outer Space Act 1986 (OSA). 

 

  1. This framework will create one of the most assured and agile regulatory regimes for the space industry in the world. It has been created to be necessarily wide-ranging, but also flexible to innovation and so allowing for the development of new commercial spaceflight technologies, including satellite construction and operations, traditional vertically launched vehicles, air-launched vehicles, sub-orbital spaceplanes and balloon launch.

 

  1. The CAA is already experienced in harnessing innovation whilst regulating for safety in aviation and has overseen the provision of approvals for testing and trialling several new technologies including, full scale non-hydrocarbon propulsion demonstration aircraft, highly novel electric vertical take-off and landing (eVTOL) aircraft intended for “flying taxi” services, and beyond visual line of sight (BVLOS) drone operations.

 

  1. Once established, the framework will facilitate an agile commercial spaceflight sector with industry operators able to hold a licence that covers multiple launch campaigns against high safety of public standards. We recognise that the regulator will play a critical role in allowing the industry to grow safely within this new regulatory environment.

 

Our plans and the role of the regulator

 

  1. The CAA’s preparations for developing the regulatory capability to oversee the safety and security of the space sector are well advanced.  Regulatory oversight will be delivered through a robust performance-based oversight regime while meeting the statutory requirements outlined in the SIA. Under the SIA and the Space Industry Regulations 2021, the CAA will oversee the licensing of spaceports, launch operators and range operators as well as in-orbit activities under both the SIA and OSA. We will also retain our existing obligations for rocket operator permissions under the Air Navigation Order (ANO) 2016.

 

  1. For all licences, the CAA will oversee licence conditions, eligibility criteria, prescribed roles, liability and insurance, enforcement, international obligations and security against the policy framework established by Government. The CAA will issue licences and carry out monitoring and oversight as operations are conducted.

 

  1. Working in the public interest, key areas of consideration for the CAA in spaceflight regulation are set out in regulation and include:

 

  1. For in orbit licensing of space objects (under both the SIA and OSA) the CAA will follow the assessment principles that are built on the proportionate approach taken from decades of experience of licensing space objects by the UK under the OSA. They are: 

 

  1. Many of our existing regulatory responsibilities, such as those relating to the design and operation of UK airspace or the licensing of aerodromes, mean that spaceflight will be integrated into existing regulatory frameworks for safety.

 

  1. Along with experienced colleagues from the UKSA joining the CAA’s new Space Regulation team, we have also undertaken an extensive recruitment campaign to bring in the skills we need to undertake these new responsibilities. Our team is almost fully staffed, with 34 people working across policy, engineering and licensing functions. The majority of the team has significant experience in space, while other colleagues bring regulatory experience from other sectors, including from elsewhere in the CAA.  Colleagues in the team are all undertaking a comprehensive and intensive training programme so that they are prepared to oversee the industry from the end of July 2021 onwards. We also intend to have an experienced FAA space regulator join the CAA on a 12-month secondment in July 2021 and we have secured access to European Space Agency (ESA) specialist technical consultancy and / or contractors through Commercial Space Transport Scheme funding if required.

 

  1. In addition to making sure we have the right people in place, we have been developing the processes and systems to allow us to be an effective and proportionate regulator. This includes a programme of training and warrant authorisation of licensing officers/inspectors; digitising aspects of the licence application process helping to streamline the application journey; and building a case management system that will create an auditable repository of applicant information.
  2. It is also important that the industry prepares for the incoming regulatory regime. To this end, we have been working closely with the DfT and UKSA in running a series of plenaries for the industry to explain what the regulations mean and explaining how the new framework will work. In addition, we have:

 

  1. We will continue to build on this programme of engagement so that the industry is as prepared as possible for the incoming regulatory framework.

 

  1. Finally, we recognise that if we are to oversee a growing sector, then our plans must be scalable. While we believe the regulatory capability we are finalising will meet the needs of today’s industry, its organisational design means that we will be able to increase the size of the function as the sector expands.

 

Our approach to regulating the space sector

 

  1. Building on our long track record of safely enabling innovation in aviation, the CAA is very keen to support the Government’s ambitions for space. Over the course of our discussions with the industry, we are setting out our principles of regulation[1] and how we will adhere to them in our regulation of space, in addition to the priorities for spaceflight established for us by Parliament. These principles are reinforced by the government’s Better Regulation framework and its Regulators’ Code.

 

  1. This includes, firstly, a commitment to acting proportionately. Our aim throughout our regulatory activity of this sector – as it is of the aviation industry – is to only regulate where we have to and to tailor our approach to meet the specific needs of a given organisation. In doing so, the benefits expected from our regulation will outweigh any burden or cost we impose. In recent years, we have simplified how aviation innovators engage with the regulatory system – principles which we will apply to our regulation of the space industry.

 

  1. We are also committed to engaging proactively and transparently with the industry. As a safety and security regulator, we will need to make decisions that may be unwelcome by a particular organisation. While we will not shy away from making the right decision, we will always strive to be clear about the rationale for our actions and decisions and publish appropriate information in a clear and accessible way.

 

  1. One key area of our future responsibilities where we are already proactively engaging with the industry is with regard to the licensing of spaceports, range and launch operators. In developing our process for this work, we have taken account of the requirements under the draft regulations, an understanding of other regulators’ processes, and our experience of licensing the aviation industry.

 

  1. We estimate the process of launch operator licensing will take between nine and 18 months to complete, with the length of time dictated by the complexity of the space mission, the heritage of the technology, the experience of the operator and the quality of the initial application. In our engagement with the sector, we have been clear that the responsibility for developing credible operational technology and regulatory proposals lies with operators. They must, as part of the licensing process, show us how they manage their risk. It is our responsibility to act independently in assessing the quality of how they do this in order to support public confidence in the safety of their operations.

 

  1. The process itself will require the applicant to provide us with documentation detailing a range of safety and security considerations, including, inter alia, a comprehensive safety case, a separate risk assessment for participants on the spacecraft, financial resources, security and cyber risk mitigation and an environmental assessment. Should any of the requested information be missing or inadequate, this will have an impact on the application process timetable for the applicant as we will pause the application process until we have received all required details. Once we have received the complete and high quality information we have requested, we will then undertake a full assessment of the application, including seeking independent assurance, before finally seeking the Secretary of State’s consent for the licence to be issued.

 

  1. This estimated timeline to assess launch licence applications is both realistic and internationally competitive. The US Federal Aviation Authority, for instance, mandates a maximum of 180 days to evaluate applications. This, however, only begins after an extensive period of pre-application engagement and when the FAA decides the application is sufficiently mature to be evaluated. This process can often take between two and five years. The FAA can also pause the 180-day evaluation period at any time. As a comparison major military exercises using rockets at high altitude take between 18 and 36 months to plan and approve.

 

  1. While the CAA cannot accept licence applications until we formally become the regulator, we are engaging closely with the sector so that they understand the process, the requirements under the regulations, and our expectations as the regulator. Ultimately, we hope this will allow for the swift submission of applications once the process is available.

 

Liabilities & Insurance

 

  1. The UK Government is responsible for setting the policy for insurance requirements and liabilities for spaceflight activities licensed under the SIA. The CAA as the safety regulator will implement the Government’s policy.

 

  1. The Government has set out its policy intentions for liabilities, indemnities and insurance under sections 34 to 38 of the SIA. Last year the Government ran two public consultations on the draft Space Industry Regulations and guidance material. The second consultation focused on the Government’s proposals for liabilities, insurance and charging requirements. The Government response to both consultations was published on 5 March 2021. The response sets out the policy intention[2] from Government that all operator licences issued under the SIA will contain a limit of operator liability with respect to claims made under both section 34 and section 36 of the Act. This is also set out in guidance. Operators will therefore not face unlimited liability for activities carried out in compliance with the Act.

 

  1. For launch activities from the UK, as part of the licensing assessment process, the CAA will inform operators of the insurance requirements using the Modelled Insurance Requirement[3] (MIR), the policy approach established for financial risk management for third parties by Government. This approach is similar to the Maximum Probable Loss approach used in the US and will tailor the insurance required to the diverse range of UK launch activities anticipated and reduce operator costs in general compared with a fixed limit. The limit of liability will be set generally at the same amount as the MIR value. This proportionate approach will reduce the cost burden on operators by tailoring the insurance requirement to the risk associated with each mission.

 

  1. The MIR is based on the outputs major accident hazards identified by the applicant in the safety case and follows a three-stage process:

        Identify major accident scenarios

        Mission phase risk assessment

        Insurance requirement determination

 

  1. The financial values to be applied in the MIR have been published and updated for the first launches. These will be kept under annual review and updated if there are significant changes. There will also be a formal review of the methodology every five years.

 

  1. Policy options are still being developed for insurance requirements for launch vehicle components that remain in-orbit, as well as for the re-entry of satellites and launch vehicle components. A wider review of liability and insurance is currently being conducted, as the Government committed to in its response to the consultation.  

 

  1. We are encouraging operators to engage with us, insurers and other regulators where licences are required ahead of the submission of the application to discuss handling of insurance arrangements. The CAA will provide the applicant with the insurance amount needed following the assessment above to ensure sufficient time to finalise the insurance policy.

 

International considerations and partnerships 

 

  1. Like aviation, space is inherently international. Vehicles cross into different jurisdictions, either under the purview of different national authorities or international organisations; rockets designed and built in one country, may be launched from another; and the rules and regulations are underpinned by both the OSA and SIA which implement our international obligations. We therefore want to highlight to the Committee the importance of international collaboration in facilitating the success of the industry in the UK.

 

  1. We have existing strong relationships with bodies such as the FAA Office of Commercial Space Transportation (AST), the Centre National D’Etudes Spatiales (CNES), the International Civil Aviation Organisation (ICAO), the European Union Aviation Safety Agency (EASA) and the European Space Agency (ESA). We are already working with the FAA to streamline and share regulatory assessments for US operators wishing to come to the UK. We are also working informally with other regulators in Europe to understand the launch ambitions of our neighbours, share best practice and work collaboratively on areas of mutual interest.

 

Conclusion

 

  1. The UK already has a leading satellite industry and can capitalise on further growth within the indigenous space sector. The regulatory framework that the Government is putting in place will allow for innovation and new technology underpinned by high standards of safety and security, and we are working to make sure there is an effective and proportionate regulator in place should the secondary legislation come into force.

 

  1. In this submission, we have explained the benefits of the incoming regulatory framework; the work we are doing to prepare to be the safety and security regulator for the UK space sector; how we would intend to regulate the sector; and our view on the value of international collaboration. We stand ready to support the Committee in providing any further evidence, both written and oral, as required.

 

(June 2021)


[1] Our Strategy | UK Civil Aviation Authority (caa.co.uk)

Regulators' Code - GOV.UK (www.gov.uk)

Better regulation framework - GOV.UK (www.gov.uk)

 

[2] UNLOCKING COMMERCIAL SPACEFLIGHT FOR THE UK (publishing.service.gov.uk) pg.23 para 4.109

[3] Technical guidance on the Modelled Insurance Requirement (publishing.service.gov.uk)