Consultation outcome

Space regulatory financial tools package: Including government response to the liability, insurance, charging and space sustainability consultation

Updated 8 September 2026

Executive summary

The Department for Business, Innovation, Science and Trade (BIST) brings together business, innovation, science and trade to support growth, investment and opportunity across the UK.

The space sector has been identified as a frontier sector as part of the government’s Modern Industrial Strategy. The space sector is a prime example of where rapid innovation is taking place, with UK space companies and universities developing world-leading technologies such as In-orbit Servicing, Assembly and Manufacturer (ISAM), satellite communications and Earth observation and taking a leading role in influencing global thinking on space sustainability and lunar activities.

Developing new regulatory frameworks for these activities is a key priority for the government and an important enabler for such missions. They provide the space sector with the clarity needed to conduct missions and commercialise these innovative new mission types, which have the potential to bring billions of pounds into the UK economy over the coming decade. Regulation can also help support growth of the space sector and the wider economy, key objectives for the government, as space data and services are increasingly supporting a broader section of the total UK economy.

The measures announced in this package have been designed to support the development and growth of these key new activities as well as existing operators and mission types. They aim to remove administration and cost burdens for operators, support innovation by helping to de-risk liability and insurance considerations for early adopters and developers of technology for novel missions such as ISAM and lunar and look to incentivise and reward better behaviours that operators adopt. The policies also align with wider government policies and ambitions on growth and risk appetite.

The package supports recommendation 7 of the Space Regulatory Review. This looks to ‘reward responsible space system developers by identifying potential financial tools, incentives and market access schemes that promote sustainable activities and in turn encourage self-investment, inward investment and support a level playing field for UK companies.’ The package also aligns with the Regulation Action Plan, supports reduction in operating and administration costs for UK satellite operators and the UK government’s ambitions on promoting growth throughout all parts of the UK. 

The full package of measures announced today is as follows:

• The introduction of variable liability limits for orbital operations licence applications received after 1 December 2026.
  • The approach will be structured using three tiers (£50 million, £20 million and £0), to incentivise responsible behaviour by operators through security and space sustainability criteria.
  • £50 million will be the default limit applied however operators may submit evidence on a voluntary basis to seek a reduction in their limit of liability for the activities covered by the orbital operations licence.
  • The initial criteria will assess whether operators have completed UK Space Agency cyber and physical security assessments and how they educate themselves on space sustainability.
  • A next iteration of the approach will be considered for implementation in late 2027 or early 2028, with possible alternative criteria to reflect security and space sustainability policy in place by that time, and could include additional/higher liability bands to further incentivise responsible behaviours.
• To support innovation, liability and insurance requirements will be waived for in‑orbit servicing, assembly and manufacturing and lunar missions launched before 2030, aligning with a recommendation from the Rendezvous and Proximity Operations regulatory sandbox. This will apply to licences issued from 1 December 2026 for such missions.
• Alternative insurance models, such as voluntary mutuals and collective sector policies, are endorsed. We propose also to explore establishing a Space Re concept, similar to flooding and terrorism insurance models, to help with longer term stability of the space insurance market. Unlike discussions on the sector-led mutual and collective policies, this is still an exploratory consideration, with no commitment being made to introduce or support such an approach.
• Any existing decommissioning funds set up to de-orbit satellites in the event of a constellation operator’s insolvency will be wound up. Going forwards the Civil Aviation Authority (CAA) will balance risk and proportionality for any financial measures, allowing a more proportionate approach to deposit and security requirements.
• Licences issued for orbital operations and procuring a launch from applications received after 1 December 2026 will contain liability limits in pounds sterling, replacing the current euro‑based limit determination.
• Finally, from February 2026 all licences issued under the Space Industry Act 2018 have legally been required to include mandatory liability limit for the liability that arises under Section 36 of the Act, ensuring UK operators are no longer exposed to unlimited liability. This addresses a key ask from the space sector to make it a mandatory requirement in legislation for this to happen.

The package has been brought together using a One Government approach, working closely with the UK’s space regulator, CAA, as well as supported and developed with the Regulatory Innovation Office (RIO).  

The government would like to thank the space sector and insurers for their input into informing the scope of this package over recent months, as well as their input into the consultation on orbital liabilities, insurance, charging and space sustainability. This package addresses the main proposals raised in that consultation.

BIST, working through the new UK Space Agency, will work with CAA and others across government to implement these changes at pace through guidance and, where applicable, through legislation changes / revocations.

The UK Space Agency will hold a workshop with the space sector and insurers to run through these measures in more detail.

Background on the space regulatory financial tools package

This package of measures has been developed in response to a number of key government initiatives on growth, risk appetite and regulation.

The package builds on the ambitious programme of regulatory reform that is underway arising from the 17 recommendations in the Space Regulatory Review. The measures in this package align with the growth aim set out in recommendation 7 of the Review which looks to ‘reward responsible space system developers by identifying potential financial tools, incentives and market access schemes that promote sustainable activities and in turn encourage self-investment, inward investment and support a level playing field for UK companies.’

The package also supports the Regulation Action Plan and UK government ambitions to reduce costs for business, as well as supports growth across the whole UK.

A number of possible measures have been proposed by Government or have emerged as proposals from the space sector through the consultation on orbital liabilities, insurance, charging and space sustainability. These were explored with the sector and insurers in workshops and other meetings between summer 2025 to early 2026. Proposals considered were:

• Changes to third-party liability (TPL) and insurance requirements for orbital operations. This considered one option of abolishing the requirement, with another to adopt variable liability limits, as proposed in the consultation on liability and insurance.
• Abolishing orbital operations and procuring a launch licence application fees or implementing variable fees;
• Insurance Premium Tax (IPT) Relief for pre-launch insurance;
• Abolishing decommissioning funds for operators of large constellations; and
• Developing an HMG-backed space bond for public investment.

The package announced today covers the proposed changes to TPL and decommissioning funds. These measures have been broadly strongly supported by the space sector through the engagement. The Government does not currently plan to take forward the other proposals.

There has been a significant level of discussion around the approach on liability limits. The abolition of liability and insurance requirements raised serious concerns amongst both the space sector and insurers. This feedback has influenced the thinking on the government adopting the variable liability limit approach.

The main reasons cited were that operators supported the approach as a measure to demonstrate their sustainability credentials to investors, which is of increasing interest to investors. Insurers were very concerned that capacity for TPL could disappear and not return in response to the UK abolishing such requirements, as the majority of global demand for TPL is from UK operators. They are also supportive of initiatives such as the Earth and Space Sustainability Initiative and the development of the first two flex standards on space sustainability now published by the British Standards Institute. The variable liability limit approach in its first iteration will link into these initiatives.

The scope of the variable liability limit has been altered significantly since it was proposed in the consultation. The approach is more focussed in terms of the elements it is looking to promote. Along with space sustainability, security has also been included as a key focus for the approach to reflect the growing need for operations to be more secure in response to increasing threats, to be able to maintain resilience as our use and dependence on space increases.

As policy on security and space sustainability develop, BIST will adapt the criteria needed to achieve liability reductions. In the next iteration, BIST may consider additional/higher liability bands to further incentivise responsible. Additional requirements will be considered for future iterations to maximise impact.

CAA and UK Space Agency are developing proposals to streamline licensing for orbital operations by exploring approaches to authorise multiple missions under a single licence. This includes commissioning a regulatory sandbox by CAA and UK Space Agency to work with the sector to trial such approaches. The treatment of application fees for orbital licences is being considered as part of this project and will be informed by the licensing model proposed through that project.

The proposal on Insurance Premium Tax Relief is also not being taken forward at this stage.

As announced in the Space Strategy, the government intends to propose a second package of space regulatory financial tools. The scope of such measures for future discussion with the sector is yet to be agreed but the government is exploring the potential for this to cover a broader consideration of financial measures for the wider sector beyond those required for licensing purposes.

Further detail on the package of space regulatory financial tools measures

This section provides some further detail on the measures. The existing guidance on the CAA’s website and on gov.uk will be updated prior to the measures taking effect. Further information will also be provided at a workshop to be held in September 2026.

Measure 1 - Variable liability limits for orbital operations

Where an orbital operations licence application is submitted on or after 1st December 2026, a variable liability limit approach will be applied in such licences issued under either the Space Industry Act 2018 or the Outer Space Act 1986. This will apply to new licence applications only and any licences issued for applications received before this date will not be re-assessed under the variable liability limit approach.

For further information on how limits of operator liability are included in orbital operations licences, please find details in CAA’s guidance on applications for orbital licences. This includes details of model licence terms and conditions and can be found in the guidance here - CAP2224 Guidance on applying for a licence under the.

Rather than the single, fixed value for standard missions being applied (€60 million), one of the following three values will be included as a licence condition in licences:

• £50 million – the equivalent of the current €60 million requirement for standard missions;
• £20 million; or
• £0.

The default value to be included in licences will be £50 million.

Operators may submit evidence as part of the licence application information sent to CAA to seek a reduction of this default limit of liability for activities covered by the orbital operations licence. CAA will forward this information to UK Space Agency in BIST for assessment.

The UK Space Agency will assess the evidence provided to determine whether it meets the requirements to enable a reduction in an operator’s liability to be applied.

Two criteria have been identified for the first iteration of the variable liability limit approach. These are based on security and space sustainability criteria to incentivise responsible practices.

Where sufficient evidence is provided to meet one of the criteria, the limit of operator liability applied will be £20 million. Where sufficient evidence is provided to meet both criteria, the limit of liability will be reduced to £0.

It is entirely voluntary whether applicants submit this evidence to seek a reduction in liability and insurance requirements to be included in the licence. Operators may also choose to submit evidence to meet only one, rather than both, criteria, if they so wish. If applicants choose not to submit evidence in support of lower liability limits, the default limit of £50 million will be applied.

Details of the criteria to be assessed under the variable liability limit approach

The initial two criteria to be assessed against will be:

Has the operator provided evidence of having registered an interest in and had an audit conducted under both of the UK Space Agency-funded initiatives on cyber security and physical security assessments? [Yes / no]

• The cyber security scheme is a UK Space Agency-funded cyber security consultancy support and/or a Cyber Essentials/plus assessment and certification programme.
• It is aimed at getting participants to achieve a baseline level of cyber security using the UK government approved Cyber Essentials scheme Cyber Essentials - NCSC.GOV.UK or enhance their cyber security arrangements.
• The physical security assessment is a UK Space Agency-funded Physical Security Penetration Test and Assessment to address vulnerabilities, give applicants an improvement plan and demonstrate to investors and partners an applicant’s commitment to physical security.
• Both programmes are fully funded by UK Space Agency however any remediation arrangements as recommended in the final assessment is at your company’s own costs.
• For recognition under the variable liability limit approach, you would not be expected to provide the reports of the outcomes of the audits, or demonstrate what you had done in response to the recommendations from those audits.

Further information on both of these schemes can be provided on request by contacting UKSA.Resilience@dsit.gov.uk.

If you have applied for but have yet to have these assessments completed at the time of application or are ineligible for the schemes but have made an enquiry to undertake the assessments, this will be taken into consideration as part of the assessment.

Has the operator demonstrated having access to the latest information on sustainability to educate themselves about relevant standards and developments? [Yes / no].

Relevant evidence for applicants to submit to the CAA as part of the licence application will be:

• Supplying a copy of the latest version of ISO standard 24113;
• Providing a copy of the new British Standards Institute Flex 1969 Space Sustainability Standard – Overarching Principles and Framework;
• Evidence of having signed up for paid for access to the Earth and Space Sustainability Initiative’s sustainability updates, as well as having access to the ESSI database of space sustainability standards.
• To inform wider policy development on space sustainability measures by BIST, applicants will be asked to provide, on a voluntary basis, a short outline of which space sustainability measures from these standards and latest developments that they have adopted. This can use information provided as part of the wider licence application and will not be used to determine the application itself.

It is important to note that this does not mean that you need to have followed these guidelines and standards in your mission design, except if this is required by CAA. The summary information requested on space sustainability to help policy makers understand which are the more commonly used space sustainability standards and measures being considered by applicants.

Technical framework and further guidance on the variable liability limit assessment

As part of BIST’s approach to providing further detail on matters of government policy for orbital operations matters, the UK Space Agency will publish a technical framework before 1 December 2026 setting out the further details on the following:

• The more detailed elements on the two criteria to be used in the assessment;
• How the information will be reused for subsequent applications by the same operator.
• Handling of other matters of liability arising from this package, including for ISAM and lunar missions.

CAA will also be updating existing guidance on liability and insurance matters for spaceflight activities to assist operators.

Next iteration of the variable liability limit approach

The two criteria set out above are for the first iteration of the variable liability limit approach. We anticipate that potential future iterations will take place 12-18 months (i.e. late 2027 / early 2028) after the implementation of the variable liability limit approach.

Future iterations would reflect developing policy and landscape on security and space sustainability and may include introducing additional criteria to achieve liability limit reductions and additional/higher liability bands to further incentivise responsible behaviours.

BIST will continue to monitor developments in the space insurance market to consider the impact of the approach, and will take this into account in developing the next iteration of the variable liability limit approach.

Measure 2 - Waivers of liability for innovative missions

The limits of operator liability included in orbital operations licences issued on or after 1 December 2026 under the Space Industry Act 2018 or the Outer Space Act 1986 for in-orbit servicing, assembly and manufacturing (ISAM) or lunar missions will be set at £0, unless otherwise requested by the applicant.

This will apply to the duration of the licensed activity of the orbital operations licence, which would include transit to client objects for Rendezvous and Proximity Operations missions and re-entry phase for in-orbit manufacturing missions for example.

This will apply to any licences issued for planned launches of such missions before the end of 2030 (including those which are planned to launch before that date but which are delayed beyond the control of the operator).

This policy will be reviewed in 2029 to determine whether this approach is still appropriate for such missions.

This means that operators of such missions will not be required to hold third-party liability insurance for the activity covered by the orbital operations licence.

Limits of liability and an insurance requirement will still apply to the procuring of a launch of the object conducting the ISAM activity.

This also means that any space object licensed by the UK as a client object for an UK-licensed servicing object operator would also have their liability set at £0 for the duration of the licensed RPO activity, including the remainder of the de-orbit phase of the client object post interaction with the servicing object, rather than for the duration of the mission prior to the RPO activity.

Further detail on this measure will be provided in the technical framework and updated CAA guidance.

The purpose of introducing this measure is to support a key area of focus for the government, as announced at Space-Comm Expo in a speech by Minister Lloyd in March 2026. It also helps de-risk insurability of such missions moving forwards and reduce the greater costs associated with developing these pioneering activities. This also meets a recommendation from the Rendezvous and Proximity Operations regulatory sandbox.

Measure 3 - Alternative third-party liability insurance models

The consultation on orbital liabilities referred to above set out two proposals for further consideration following a previous call for evidence which looked at possible alternative models to the current approach of orbital operators taking out an individual insurance policy. This was to understand whether there could be alternatives to provide more cost-effective solutions for orbital operations third-party liability insurance provision.

The consultation considered that two possible models were viable based on the previous analysis.

The first was a space sector proposal received to establish a mutual to provide third-party liability insurance to small operators of satellites. Members would pay membership fees which would accumulate a self-sustaining fund over time from which a third-party liability claim could be met if launched against any of the members of the mutual.

The other model considered was a collective insurance policy, where more than one operator would be covered by a single TPL policy.

This announcement agrees that a sector-led mutual and collective insurance policies are endorsed by the government to reduce costs and address current or future capacity issues.

Where such policies are proposed, the CAA and BIST will need to work with the proposers of such policies to ensure that they meet the necessary requirements placed on licensees.

Also, the government wishes to explore establishing a Space Re concept, similar to the Pool Re and Flood Re insurance models, if that would be of interest to the space insurance market. Unlike the models suggested above, this is not a matter that has been discussed in detail, therefore the government would like to have some further discussions with the space insurance market to determine whether such a model would be of benefit and how it could operate.

Such a model would be used to support wider market fundamentals rather than be a response to a realised market failure in space insurance provision. As the scope of activities in space grows, the innovation of the City of London insurance market can help deliver products that support these novel activities, with the potential to deliver significant benefits for operators and the insurance sector alike.

Measure 4 – Winding up existing decommissioning funds

The government will wind up any existing decommissioning funds established to mitigate risks arising from a constellation operator going insolvent. Such funds were established to ensure the safe de-orbiting of satellites to prevent orbital debris by providing resource to fund retention of staff and third-party liability insurance policy coverage to de-orbit the constellation safely over a period of time.

CAA’s responsibility to assess and monitor the financial health of an operator to ensure that the licensed activities can be conducted safely means that HMG-imposed requirements to establish a decommissioning fund are no longer appropriate, as the necessary measures are a matter for CAA to determine, taking a proportionate approach to financial security.

BIST and CAA will contact relevant operators to discuss the process for winding up such funds, and any additional measures that need to be put in place before a fund is wound up.

Measure 5 - Currency amendment in licences

The currency for liability limits in orbital operations and procurement of launch licences will change from euros to pounds sterling for licence applications received on or after 1 December 2026 to align with the proposed implementation date of the variable liability limit approach. This aligns with the currency used in other licence documents.

Further guidance will be issued to inform operators whose TPL policy is set in a currency other than pounds sterling as to whether the coverage provided is sufficient.

Legislative update - Mandatory liability limits in licences

A legal change effective from February 2026 now requires all licences issued under the Space Industry Act to include a limit of operator liability to indemnify government for claims made against the UK government, to align with other areas of liability that arise under UK space legislation.

This change was made possible by a recent Private Member’s Bill receiving Royal Assent, meaning that no UK operator will be exposed to unlimited liability.

The government supported the passage of the Bill through Parliament and wishes to highlight this change, which has been a key ask of the space sector to address to provide certainty to operators and investors that this liability will be limited in operator licences (launch, orbital and procuring a launch).

Background on the orbital liabilities, insurance, charging and space sustainability consultation

On 14 September 2023 the UK Space Agency launched a consultation on orbital liabilities, insurance, charging and space sustainability. This followed a commitment in the National Space Strategy to launch a review of options to consider a lower limit of operator liability for in-orbit operations and alternative insurance models to support the needs of small satellite operators. The response to a call for evidence issued as part of the review was published in the June 2022 liabilities and insurance call for evidence, which found that the UK’s approach on operator liability limits was uncompetitive.

The consultation on orbital liabilities, insurance, charging and space sustainability put forward proposals for introducing a variable liability limit, assessed against sustainability criteria, with the aim of incentivising the adoption of sustainable practices. This followed a commitment by the previous government in response to Sir Patrick Vallance’s Pro-Innovation Regulation of Technologies Review to consult on a variable liability limit approach. Reference to a variable liability limit as an incentivisation mechanism was also made in the Space Regulatory Review.

The consultation also provided an overview of policy areas which influence the proposed variable liability limit approach and could impact on any future adaptions.  

The consultation put forward a range of other proposals regarding liabilities and insurance including alternative insurance models for third-party liability (TPL), particularly the viability of introducing a mutual model or a collective insurance policy, as well as inviting comment on end-of-life and re-entry practices. The consultation also asked for views on a proposed refund scheme for orbital operator licence fees, which would be aligned to the proposed variable liability approach. The consultation also sought views on introducing waivers for both insurance and licence fees in certain circumstances.

The consultation additionally invited views on longer-term actions that the UK could take to promote space sustainability and demonstrate leadership, including a proposal to develop a Space Sustainability Roadmap to 2050.

To support publication of the consultation two plenary sessions were held, each attracting approximately 150 attendees.  The consultation on orbital liabilities, insurance, charging and space sustainability closed on 5 January 2024.

Responses to the consultation were received from industry, academia and the legal and insurance sectors in the UK, as well as non-UK respondents.

Annex A lists the respondents and shows the distribution of responses by respondent type.

The views expressed in responses have informed further consideration of the proposals raised in the consultation, some of which have been the subject of more recent discussions as part of the space regulatory financial tools package development. The following sections provide a short overview of views received and how this has informed the development of the proposals included in this space regulatory financial tools package.

Section 1 of the consultation

Section 1 of the consultation covered measures capable of being implemented in the near to mid-term. Matters covered included: 

• the proposal to adopt a variable liability limit approach for orbital operations based on mission sustainability criteria;
• the views on the viability of alternative approaches for insuring third-party liability obligations for orbital operations;
• the industry-led Space Sustainability Standard announced in June 2022;
• views invited on the overall benefits of the above proposed measures in reducing insurance premiums and other potential benefits;
• the intended policy on other areas covered by the liability and insurance review - including insurance requirements for end-of-life and re-entry; and
• views invited on a variable refund approach for orbital operations licences to align with the proposed approach to setting variable liability limits.

Variable liability limit approach

The proposal in the consultation set out a two-stage process to determine the liability limit for a satellite:

Stage 1 determining a baseline limit of liability using two parameters based on the activity being undertaken and the orbit in which the activity is to take place.

Stage 2 assessing the proposed mission against a series of sustainability aspects. The score for this stage determining whether the stage 1 baseline liability limit should be reduced, increased or remain the same.

Views received in response to the consultation

• There was general support for the adoption of a variable liability limit approach, although some respondents did not agree with the variable approach. There was general recognition of the importance of encouraging sustainable practices.
• There was also general support for adopting the two-stage approach proposed.
• Suggestions for alternatives to the current approach included applying the Modelled Insurance Requirement (MIR) to determine a bespoke liability limit, as per launch activity (which has already been discounted) or linking the liability limit to compliance with mission sustainability criteria during the mission lifetime; and retaining insurance beyond the end of the mission where operators have not met requirements.
• There was little active support for the suggested £20m middle limit, with respondents highlighting that a £20m middle limit would be unlikely have a meaningful impact on premiums. However, this does not allow for the possibility of insurers adapting their pricing structures to reflect the proposed £20m limit. In addition, a £20m limit would send a positive signal about UK competitiveness.
• The consultation identified a need for more detail / guidance regarding the criteria used in the Stage 2 assessment. In addition, areas of duplication in the information required from operators to support the proposed variable liability approach were also identified.

Government Response

The government has noted the general support for the variable approach, and the strong support indicated in more recent discussions.

Based on feedback about complexity of assessment and the number of criteria applied in the consultation proposal, significant modifications for the first iteration of the approach have been made compared to the original proposal in the consultation.

The three levels of liability (£50 million, £20 million and £0) are retained but the number of criteria covered has been reduced to two to aid clarity, ease of assessment and achievability. As noted above, future iterations may introduce additional criteria and liability bands, and reflect developing security and space sustainability policy and landscape.

A study was commissioned to look at how the stage 1 assessment could be structured. The report was received and considered and provides a useful basis for possible integration into future iterations. The first iteration of the approach will not contain a stage 1 assessment.

Views on alternative third-party liability insurance models

The consultation requested views on the following insurance models:

• Discretionary Mutual Insurance Scheme for Small Satellite Operators, based on a proposal received from the space sector. Rather than all operators purchasing TPL insurance individually from the commercial insurance market, members would pay a reduced premium to the Mutual, in which a fund would be built up over time. In the case of a third party claim the Mutual would pay the claim up to the amount of the liability limit out of the insurance-backed managed fund.
• Collective insurance policy - A single policyholder would arrange a pool policy for applicable operators. The policyholder would pay an initial nominal fee to establish the policy and each operator eligible to be covered could then declare the satellites they would want to include on the policy. The fee for each satellite would be determined by the risk of each mission, but in practice would be less than for a policy agreed by individual operators.
• A model of establishing a government-backed space bond which could also be used to meet any liability claims had been discounted.

There was a clear consensus against adopting the proposal for a Government Space Bond for the purpose of using such a funds to meet liability claims. However, both the Mutual and Collective models of insurance received support but with differing views expressed between operators and insurers.

Government Response

Government has endorsed the adoption of such models. Any organisations interested in setting up such models must discuss their proposal with BIST and CAA before being finalised to ensure that orbital operations licensees’ obligations can be met by the scope of the proposed insurance model / policy.

A study was commissioned to look at how a collective insurance policy could be structured and will be used to inform discussions on any future insurance policy agreed under this model.

Waivers of insurance requirements and liability limits

Insurance waivers are currently applied to certain low-risk missions, for example missions launched from the ISS. 

In recognition of their significant development costs, the consultation sought views on the potential extension of such waivers, or the application of a £0 liability limit, to licences issued in respect of first-of-a-kind technologies.

It was proposed that any such waivers would be subject to a risk assessment by the regulator to be determined on a case-by-case basis. Additionally, it was proposed that where novel technologies were unable to meet the criteria for such a waiver, the regulator may, at its discretion, apply a lower insurance requirement than would otherwise be the case.

There was general support for the approach as proposed. In addition, it was suggested that the proposed approach be extended to include missions with national strategic importance or missions generating valuable sustainability data.  

However, concerns were raised that the consultation did not go far enough in defining what would constitute a ‘first-of-a-kind’ technology, and that any assessment process should not unduly extend the normal licensing timeline for such missions.

Government Response

As covered in the financial tools package, the government intends to set liability limits at £0 for licences covering ISAM and lunar missions for such missions launched before the end of 2030.

Other mission types or programmes may be covered following further review.

End-of-life TPL requirements

The consultation did not propose that the current approach should change in any significant degree.

However, concerns were raised over the lack of detail presented in the consultation regarding those changes that were proposed, and over the lack of clarity regarding what would constitute intended end-of life and what would constitute unintended end-of-life.

Government Response

CAA is reviewing its guidance on liability and insurance and this will be updated to reflect the new variable liability limit approach and other matters being taken forward as part of the financial tools package. Further clarifications on end-of-life insurance position will be considered as part of those updates.

Re-entry insurance requirements

Presently, the current approach to disposal via re-entry assumes that satellites will be destroyed on re-entry into the Earth’s atmosphere and that therefore insurance is not required to cover this activity.

However, where it is intended that a satellite should survive re-entry, for example in-orbit manufacturing missions, the consultation considered what liability limits and insurance requirements could apply to such activities, including conditions for requiring a controlled re-entry.

Government Response

As set out above, the government intends to waive insurance requirements for ISAM missions, which will include for re-entry activities for those activities, for such missions launched before the end of 2030. We are not aware of any other mission types in train that would require re-entry insurance requirements.

This financial tools package does not look at the controlled / uncontrolled re-entry requirements and any updates to the current approach applied will be considered separately.

Other matters covered in Section 1 of the consultation

The consultation also sought views on the following questions:

• Development opportunities for other insurance products
• Issues on insurance in the next 5-10 years
• Managing limited capacity
• Key challenges with novel technologies
• Other issues to consider

Points raised by respondents

A proposal to remove Insurance Premium Tax was received in a response to the consultation, arguing that IPT was becoming a burden to industry and potentially stifling UK satellite manufacturing.

Just under a third expressed support for business interruption or continuity insurance. However, it was recognised that large operators with built-in redundancies may not require this product.

Concerns were raised about the impact of space debris and increasing congestion on premiums and the future insurability of satellite operations. In addition, given space insurance is a specialised market, concerns were raised about market capacity and its knock-on effect on future financing.

More generally there were calls for more collaborative working between the space sector and the government with a view to developing and bedding in new space-related activities, with concerns also raised about how liability operates for evolving mission types such as (In Orbit Servicing) IOS missions where cross-jurisdictional considerations come into play. It was suggested that consideration be given to clarifying the position for operators.

There was support for better monitoring and tracking of satellites and space debris, as well as improved data sharing about the orbital environment.

Government Response

The government is not proposing to apply IPT Relief to pre-launch insurance at this stage.

As noted above, the government is exploring the potential for a second package of financial tools to cover a broader consideration of financial measures for the wider sector beyond those required for licensing purposes.

The government also intends to set liability in operator licences for ISAM and lunar missions at £0 for such missions launched before the end of 2030. The government and CAA will issue further guidance for RPO operators, which includes handling of liability aspects. The government has also developed a template arrangement with the New Zealand Space Agency to help facilitate RPO missions involving other jurisdictions.

The government also wants to have further discussions with space insurers to develop further products and also consider establishing a Space Re concept and will continue to monitor developments in the sector, including available capacity, although the alternative TPL insurance models can help with managing capacity.

The government also views Space Domain Awareness as a key priority and is taking forward a programme of work in this area, building on recent developments.

SIA 2018 and OSA 1986 satellite licensing: charging for Orbital Operator Licences

The consultation proposed applying a variable refund to the fixed fees currently charged for orbital operations licences, as a means of reflecting the sustainability aspects of the proposed mission and to align with the variable liability limit approach, and to waive fees in certain circumstances.

There was general support for the proposed refund structure being aligned to the proposed variable liability limit approach, and for the inclusion of the current Constellation Refund Scheme. However, counter views submitted said that the proposed refund structure could be overly complex; a fixed fee structure would be clearer; the current licence fee is not restrictive and that therefore the proposed refund scheme offers little financial incentive.

The proposal to introduce new fee waivers was generally supported. Views on the Procurement-Only Operator Licence said it was unnecessary; it was not required in other jurisdictions; it adds duplication as a licence would still be required in the country where the satellite would be operated from and therefore a specific lower fee or fee waiver should apply.

Government Response

As set out above, CAA and UK Space Agency are developing proposals to streamline licensing for orbital operations by exploring approaches to authorise multiple missions under a single licence. This includes commissioning a regulatory sandbox by CAA and UK Space Agency to work with the sector to trial such approaches. The treatment of application fees for orbital licences is being considered as part of this project and will be informed by the licensing model proposed through that project.

Section 2 of the consultation

Section 2 of the consultation provided a policy overview of issues influencing the proposed variable liability limit approach. Matters covered included:

• Dark and Quiet Skies;
• Manoeuvrability and collision avoidance;
• Post-mission disposal timelines;
• Astra Carta;
• Active Debris Removal (ADR) as it relates to other activities;
• Monitor Your Satellites: the UK Space Agency’s digital service sharing Space Surveillance and Tracking (SST) warnings;
• Space Traffic Management (STM);
• Safety and sustainability principles for the regulation of in-orbit missions;
• Life Cycle Assessments (LCAs)

Government Response

Further work is underway to develop the government’s policy on these areas and the government will provide an update on decisions reached when these are available.

Section 3 of the consultation

Section 3 of the consultation sought views to help inform the UK government’s longer-term priorities on space sustainability, planning and the development of a Space Sustainability Roadmap. This included questions on the following:

• Views on international engagement – where there was support for the UK building on the UK’s undoubted leadership on space sustainability should be actively fostered through bilateral partnerships and that the UK should play a substantial role at UNCOPUOS.
• Developing a Space Sustainability Roadmap to 2050 – where there was support for developing such a roadmap, with possible targets for debris removal at UK and international levels once technology had been proven, further action on debris mitigation and that there is the opportunity for the UK to lead the way in RPO services.
• Consultation feedback on activities the Government could consider prioritising. These included:
  • providing clear guidance on current sustainability requirements for orbital operator licence applicants, coupled with incentives;
  • developing RPO policy and services;
  • promoting communication between operators;
  • mandating minimum sustainability criteria in new licenses;
  • continuing to lead and engage on sustainability with domestic and international stakeholders, including alignment with wider international standards and initiatives (for example the ESA Zero Debris Charter ^{[footnote 1]});
  • supporting and advancing the Earth Space Sustainability Initiative / development and enforcement of sustainability standards and guidelines, including in UK contracts;
  • prioritising enhanced tracking and monitoring capability;
  • protecting dark and quiet skies, including developing policy and guidance regarding ‘rules of the road’;
  • identifying a suitable aggregate threshold for the probability of space debris generation for LEO constellations;
  • researching the impact of satellites re-entering the atmosphere; and
  • giving due consideration to spectrum issues.
• Establishing a UK space sustainability concept linked to international initiatives, similar to the Net Zero concept for climate change, with support for alignment with ESA and other relevant international initiatives.
• Defining sustainability with regards to space activities – where there was a consensus that the sustainability of the Earth’s environment be included in any definition of sustainability and suggestions as to how the UN long-term sustainability guidelines could be adapted in developing a UK space sustainability definition.
• International co-ordination on space sustainability – with suggestions received on further organisations beyond UN COPUOS that could be engaged with on space sustainability, including through the use of bilateral and multilateral agreements such as the UK entered into with New Zealand on RPO missions.
• Insurance / finance sector involved in space sustainability – with suggestions received on measures that could be taken by the sector to improve access to finance and insurance based on sustainability.
• Commercialisation of Active Debris Removal and In-Orbit Servicing – with general consensus that there is a place for government in the provision of ADR and IOS, the need for financing (including a possible global fund) and the need to develop domestic and global regulatory frameworks to support such missions. This included looking to maritime salvage as a model for developing ADR protocols.
• Timelines on establishing a circular economy in space, where there was general consensus that 10 to 50 years was the most feasible timescale for development of a circular space economy. However, there was support for the potentiality of small-scale efforts, such as limited re-use, being developed within a shorter timescale together with a recognition that various aspects of the market would develop at different speeds over time but that challenges remained such as maturing the ecosystem, regulations, and technologies and the need for active collaboration between global jurisdictions.
• Sustainability of the Lunar environment – where responses cited the importance of regulations, international interaction (for example through UN COPUOS and COSPAR), as well as preventing the creation of debris of any kind, as necessary factors in protecting the Lunar environment and other celestial bodies.
• Other suggested actions on sustainability, which included:
  • clear guidance on current sustainability requirements for licensing, including establishing a space sustainability standard, whilst retaining flexibility within these to accommodate different mission types and parameters / technology development;
  • providing education on space sustainability challenges to a wider audience;
  • international collaboration and agreements;
  • further consultation and engagement with the sector on any proposed sustainability measures;
  • when assessing Environmental, Social and Governance (ESG), greater recognition of the societal and governance arrangements since space is a small contributor to environmental impacts on the earth compared to other industries;
  • debris removal and In Orbit Servicing (IOS) capability to include satellites designed with facilitation of such services;
  • considering collision risk on a constellation basis;
  • data sharing and space traffic co-ordination / management, including continued investment in and development of Monitor Your Satellites;
  • monitoring in general;
  • looking holistically across mission phases, including satellite construction;
  • research into the impacts of de-orbiting spacecraft in the Earth’s atmosphere and into actions to promote dark and quiet skies;
  • implementation of a five-year de-orbit rule and requiring satellite manoeuvrability;
  • government support such as creating the right regulatory framework, funding and incentives;
  • developing a circular space economy;
  • consolidating the many channels and entry points to funding into a central gateway, including both national and ESA-supported missions, so new entrants to the sector have a clearer understanding of funding routes and opportunities; and
  • tailoring orbital missions to mitigate collision risk and better modelling to account for space weather and spacecraft characteristics.

Government response

The government intends to take a multifaceted, holistic approach to achieving a sustainable space environment for the use of future generations. Sustainability of the space environment cannot be achieved by the UK alone and it is likely that some measures needed to address longer-term space sustainability may only be achieved in partnership with the global community.

The government is working with the UK space sector and international partners to develop policy in this area and has shared with the UK space sector the scope and priorities for action.

The government has already taken forward work on a range of the points covered above, including research, promoting space sustainability in global fora (for example the dark and quiet skies agenda at UN COPUOS, developed new space sustainability standards, improving SDA capability and putting in place a new technical framework on planetary protection).

Government is considering the feedback received on the range of topics raised relating to space sustainability.

Next Steps

The government intends to hold a workshop in September 2026 to discuss the measures covered in the financial tools package and will work with other government departments, the CAA and the space sector to implement these measures.

Further thinking on wider policy matters covered in this response is being taken forward and will be announced when ready.

The government will continue to monitor developments in the space sector to determine whether further financial tools can be developed to support sector growth, and will review the variable liability limit to implement a potential new iteration in late 2027 / early 2028.

Annex A - List of organisations that took part in the consultation and respondent type

Respondents who asked for their contributions to be confidential; individuals, and those who submitted written papers rather than responding directly to the questions have not been included in this list.

Atrium Space Insurance Consortium (ASIC) 

Beazley – Lloyd’s of London Syndicate  

Clearspace  

D-Orbit  

Eutelsat OneWeb (Eutelsat Group)  

Global Aerospace Underwriting Managers Ltd  

Global Network on Sustainability in Space  

Global Satellite Vu Ltd 

Growbotics Space Ltd  

Lloyd’s Market Association  

Lockheed Martin UK   

Lumi Space Ltd  

Northumbia Law School, Northumbria University  

Prospect Law  

Pupils 2 Parliament  

Royal Astronomical Society  

Satellite Applications Catapult  

SES S.A.  

Surrey Satellite Technology Ltd  

Telesat International Ltd

The Law Society of Scotland  

The Royal Aeronautical Society  

University of Strathclyde  

Weber-Steinhaus Smith & Klein  

Plus, there was a joint response from EchoStar Mobile Limited, Hughes Europe, Hughes Network Systems and DISH Network Services.

Table showing distribution of responses by respondent type

Respondent Type	Number
Medium Spaceflight-related business	8
Large Spaceflight-related business	5
Insurance	4
Academic	3
Business representative organisation	3
Legal representative	3
Other	3
Charity or Social Enterprise	2
Micro Spaceflight-related business	2
Both Legal Representative and Academic Representative	1

1. The UK has now signed the Zero Debris Charter and is considering how to implement the recommendations arising from this ↩