Thirty-ninth Report of Session 2012-13 - European Scrutiny Committee Contents

3   Space policy




COM(13) 108




+ ADDS 1-2

COM(13) 107

Commission Communication: EU Space Industrial Policy: releasing the potential for economic growth in the space sector

Draft Decision establishing a space surveillance and tracking support programme

Legal base(a) —

(b) Article 189(2); co-decision; QMV

Documents originated28 February 2013
Deposited in Parliament5 March 2013
DepartmentBusiness, Innovation and Skills
Basis of consideration(a) EM of 8 April 2013

(b) EM of 18 March 2013

Previous Committee ReportNone
Discussion in Council(a) 30 May 2013

(b) Not known

Committee's assessmentPolitically important
Committee's decisionNot cleared, further information requested


3.1  In its April 2011 Communication "Towards a space strategy for the European Union that benefits its citizens" the Commission set out proposals for a space policy and said a specific industrial policy was necessary to deliver greater competitiveness on the world stage, independence for specific sub-sectors such as launchers and the development of the market for space products and services. It made a case for establishing an independent space situational awareness (SSA) capability based on new EU infrastructure.[9]

The documents

3.2  In this present Communication, document (a), which builds on the areas highlighted in the 2011 Communication, the Commission sets out five specific objectives for a space industrial policy:

  • to establish a coherent and stable regulatory framework;
  • to further develop a competitive, solid, efficient and balanced industrial base in the EU and support SME participation;
  • to support the global competitiveness of the EU space industry by encouraging the sector to become more cost-efficient along the value chain;
  • to develop markets for space applications and services; and
  • to ensure technological non-dependence and an independent access to space.

3.3  Underpinning these objectives are 37 specific proposals divided into six work streams, as follows.

Improving framework conditions

3.4  The Commission asserts that with the expansion of space activities it is necessary to ensure that there is an appropriate regulatory framework in place. It believes that national legislation alone will not ensure a coherent coverage of space related legal issues and suggests that it may be necessary to establish an EU space regulatory framework to exploit the potential of an internal market for space.

3.5  The Commission sets out a number of areas where action could be considered to improve so-called framework conditions. These include:

  • examining whether there needs to be legislation on the production and dissemination of private satellite data and potentially a Regulation on EU global navigation satellite systems (GNSS) third-party liability;
  • action at an EU level in relation to dual-use export control;
  • a need to ensure that there is sufficient radio spectrum available for space operations;
  • exploring whether commercial sub-orbital space flights need an appropriate EU legal framework (either to better guarantee passenger safety or to establish an innovation friendly environment to facilitate this emerging market);
  • pursuing the development of EU standards for the space industry;
  • supporting development of skills needed by the space sector; and
  • ensuring the EU space industry is taken into account during trade negotiations to foster reciprocity and a level playing field.

Supporting research and innovation

3.6  The Commission says that research, development and innovation are not only key for space industrial competitiveness but are also essential to sustainable economic growth and suggests the need for the EU to develop and maintain its own technologies and production capacities. It also recommends that the joint European non-dependence process that started in 2009, which involved the Commission, the European Space Agency (ESA) and the European Defence Agency (EDA) creating a joint task force to produce a list of critical technologies for priority development, should be pursued. The Commission notes that list has been agreed and will be used in connection with EU research and development on critical technologies.

3.7  The Commission suggests that there is a need to increase promotion of space based services in order to encourage the exploitation of satellite infrastructures and develop the market for satellite based services and says there should be an increase in space based applications in EU policies as well as stimulation of new applications across a wide range of public and private users. The Commission says that the GNSS Action Plan to foster development and adoption of satellite navigation applications using the EU programmes, EGNOS and Galileo,[10] is a first step in the right direction.

Expanding the array and use of available financial instruments

3.8  The Commission says that:

  • space infrastructure funding needs significant financial input over long periods of time, continuity is important and postponement will result in additional costs;
  • there is a market failure and public funding is required to support the growth potential of these types of projects;
  • the next Multiannual Financial Framework (MFF) includes a proposal for a new type of financial instrument — the EU project bond initiative;
  • currently, space is not within the scope for the first stage of this initiative but could be considered for the second; and

this would, however, be subject to any proposed projects fulfilling the project bond criteria, in particular regarding revenue generation.

3.9  The Commission also focuses on the need to support the participation of SMEs, as appropriate, in the supply chain and in the fast growing sectors such as satellite enabled services. It notes that:

  • there are a number of financial instruments available to SMEs, for example, the Competitiveness and Innovation Framework Programme and the Risk Sharing Financial Facility; and
  • from 2014 SMEs may also be able to benefit from the EU financial instruments under the forthcoming programmes COSME (Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises, 2014-20) and HORIZON 2020 (Framework Programme for Research and Innovation, 2014-20).

3.10  The Commission highlights the key role played by local authorities and regions in enhancing the competitiveness of the space industry but does not elaborate in what way.

Making a better use of procurement policy

3.11  The Commission:

  • notes that several Space Council[11] Resolutions have highlighted the need to develop adequate EU instruments and funding schemes that take into account the space sector;
  • says that it is necessary to establish whether the current approach to space procurement could be improved;
  • proposes, to this end, to analyse the impacts of implementation of Directives on public and defence procurement on the national and EU space markets; and
  • proposes that there should early coordination for programmes that involve joint funding with the ESA to ensure that there is a smooth transition between the development and operational phases.

Establish and implement a real EU launcher policy

3.12  The Commission asserts the importance of EU autonomy in strategic sectors such as launch services and sets out its objectives for a launcher policy:

  • to ensure a reliable, secure, available and cost effective system; and
  • to create the conditions to maintain and strengthen independent EU access to space.

3.13  It notes the importance of the EU having independent access to space when implementing public programmes such as Galileo and Copernicus[12] and suggests that Member States should ensure that their launcher purchasing policies are in line with the goal of independent access.

Support the setting up and operation of a EU space surveillance and tracking (SST) service

3.14  The Commission notes that the sustainability of space based systems and services is important, saying that:

  • any shutdown would have a significant impact both on the safety of EU citizens and economic activities within the EU;
  • there is an increasing threat of collision risks due to the rise in the number of satellites and space debris and it is necessary to identify and monitor this;
  • monitoring would include cataloguing satellite positions and tracking movements when a potential risk of collision has been identified so that satellite operators can be alerted; and
  • as no EU level SST capability currently exists, it intends to come forward with a proposal outlining the organisational framework for the setting up and operation of such a service, which would be in partnership with Member States and would build on their existing assets and expertise.

3.15  This draft Decision, document (b), would establish a SST support programme for the EU — the proposal is less ambitious than one foreshadowed in the 2011 Communication. The Commission says that:

  • spaced-based systems play a fundamental role in everyday life and are critical to the economy and security;
  • there is a need to protect EU space infrastructure accordingly; and
  • in order to mitigate the growing risk of collisions amongst satellites and orbital debris, it is necessary to identify and monitor space objects in an increasingly congested and contested orbital environment, in order to ensure the safety, security and sustainability of the space operations upon which there is are critical dependency.

3.16  The programme the Commission envisages would aim to establish a SST capability in the EU with emphasis on:

  • exploitation of existing sensors (optical and radar) to survey and track space objects;
  • establishment and operation of a function to process and analyse SST data to support risk assessment involving collision avoidance in orbit and re-entry of objects into the Earth's atmosphere; and
  • setting up and operation of a SST function to support spacecraft operators and public authorities.

3.17  The Commission says that:

  • the level of funding proposed for the SST support programme, €10 million (£8.63 million) per annum, is relatively modest and should be drawn from other programmes provided for in the MFF framework for 2014-20;
  • it envisages providing support and oversight for the development of services, but does not intend to invest in new SST sensors, relying upon the coordination of existing sensors, owned and operated by the Member States;
  • those Member States wishing to participate in the programme would need to demonstrate ownership of SST sensors or capabilities and services and adequate resources to operate and deliver them and to provide a plan for engagement in the SST programme;
  • it anticipates a coordinating role and funding for the EU Satellite Centre (EU SatCen) based in Torrejon, Spain; and
  • information generated in the framework of the SST programme would be managed and exchanged in accordance with data security and governance rules, which would likely reflect similar existing measures developed by the EU SatCen for handling sensitive remote sensing data products.

The Government's view

3.18  In his Explanatory Memorandum on the Commission Communication, document (a), the Minister for Universities and Science, Department for Business, Innovation and Skills (Mr David Willetts), says first that:

  • the Government notes the Commission's proposals for a EU space industrial policy;
  • the Communication is very wide ranging and extensive in scope with little detail provided in most cases about what exactly is proposed;
  • the Government will need to consider carefully the proposals for new EU initiatives as they emerge;
  • the thrust of the Communication is on space as a driver for growth and innovation, which is welcome and in line with Government policy; but
  • the Communication lacks a clear vision on what the industrial policy is intended to achieve and what the measures of success will be.

3.19  In more detailed comments the Minister continues that:

  • the Government is concerned that under the proposals to improve framework conditions, no evidence has been presented to justify potential legislation on the production and dissemination of private satellite data;
  • it will seek further information from the Commission on why it believes legislation is required in this area and the evidence base to support it — it is unclear when any proposal would be made by the Commission;
  • the Commission suggests an examination of the possibility of a legislative instrument on certain aspects which impact on the emergence of a single market for space products and services, which could include obligations of insurance, registration and authorisation of space activities and service, sanctions and environmental issues;
  • these areas are currently regulated in the UK by the Outer Space Act 1986, in accordance with UN Space Treaties;
  • the Act is the legal basis for the regulation of activities in outer space carried out by organisations or individuals established in the UK or one of its Crown Dependencies or Overseas Territories;
  • the Government is concerned that the Commission's proposal has the potential to duplicate effort and increase red tape;
  • the UK will always remain responsible for its space activities under the UN Treaties — the Government will seek clarification from the Commission on how it envisages this proposal working alongside Member State obligations under the UN Treaties and what additional benefit it sees from EU legislation;
  • further information is needed on the substance of the proposal to monitor and improve the export control and intra-EU transfer frameworks;
  • in particular more analysis is needed on what might be wrong with the existing frameworks or what improvements are envisaged and the Government will seek further information on the Commission's rationale for proposing action in this area;
  • the Government supports the need to ensure the availability of radio spectrum for space operations but would welcome more details from the Commission on how it proposes to take this forward in the longer term;
  • on the proposal to explore whether commercial space flights need to be embedded in a EU legal framework, the Government considers more could be done than just a study and is disappointed that this is all that is being proposed;
  • without swift movement in this area the EU will fall behind key international competitors such as the US;
  • any regulatory regime that is developed must take proper account of the available scientific and technological evidence and make correct use of the distinction between risk and hazard;
  • the Government will challenge any Regulation that justifies an excessively cautious approach, particularly if it is based on a misunderstanding of the "precautionary principle";
  • it sees substantial economic benefits from encouraging the development and operation of space planes to undertake commercial flights in the short term and to further develop space planes so that they can deliver spacecraft into low Earth orbit, geostationary orbit and beyond;
  • there is no regulatory framework for space planes in the EU and that is acting as a barrier to the research and development of space planes by UK companies;
  • this reduces the EU's ability to attract inward investment from overseas companies that could plan to operate space plane services;
  • the Government has therefore committed to working with international partners to secure a regulatory environment for space planes in its Growth Review;[13]
  • the proposals relating to skills are welcome and the Government would expect that these proposals will build on the work already being undertaken in this area;
  • the Commission proposes establishment of academic space qualifications and the Government will seek clarification from it on what is envisaged by this;
  • there are already many engineering, science and business qualifications already available and the Government needs to ensure that what is being proposed does add value — it will seek to ensure that any measures do not infringe on Member State competence;
  • the Government will seek clarification from the Commission on what it proposes in respect of ensuring that the EU space industry is taken into account during trade negotiations — it is vital that competition remains open and fair, however, the Government would support the possibility of the opening up of those markets that are currently closed to EU industry;
  • the Government agrees that research and development are essential elements of sustainable economic growth — it is, however, essential, if investment is to be directed to best effect, that space related research and development is fully co-ordinated using the detailed harmonisation and planning processes already developed and operated by the ESA;
  • the Government recognises the importance of Key Enabling Technologies (KET) to technology-based innovation generally and in the specific domain of space technologies and will ensure that the opportunities for funding from KET elements of Horizon 2020 are promoted to the UK space research and development community;
  • the Government welcomes a stronger focus on research and development — the budget Heading 1A, which covers Horizon 2020 and other pro-growth investment, will now account for 13% rather than 9% of the total EU budget and is an increase of 37% compared to the present MFF — however, these figures are subject to the consent of the European Parliament;
  • the Government supports the objective of strategic non-compliance in critical technologies but this should not be at any cost — it will work with the Commission to ensure that proposals brought forward in this area are affordable;
  • the joint planning around critical planning for non-dependence already undertaken by ESA/EU/EDA using the ESA harmonisation methodology provides a sound basis for future planning of investment in this area;
  • further information is required on the proposal to promote the use of space-based technologies and applications in EU policies — the Government would support such use where appropriate, for example, further analysis of where space services derived from Copernicus could assist compliance with Directives concerning environmental monitoring and management;
  • in relation to expanding the array and use of available financial instruments the Government notes that these proposals are broader than space and would welcome further details from the Commission on how it envisages these proposals working in practice — the Government would support efforts to ensure that financial instruments are fully exploited by industry;
  • in relation to the Commission's proposal on restricting third country market access in public procurement, the Government has previously challenged this proposal because of its protectionist nature;
  • however, the public procurement section of the Communication is helpful in setting out that the public procurement Directives apply in this area and that EU institutions are required to follow the Financial Regulation and Implementing Rules — the Government would welcome clarification from the Commission on how it intends to take forward this work;
  • the Government notes the Commission's desire to establish and implement a real EU launcher policy and supports the policy of access to space;
  • the UK is a signatory to the 2008 Ministerial Declaration on Launchers Exploitation from the Guiana Space Centre, that entrusts Arianespace through the ESA with the execution of the production of Ariane launchers and the exploitation of Ariane, Vega and Soyuz;
  • although the UK does not subscribe to the ESA's launcher programmes, the Government recognises the importance of independent access to space — it will, however, seek clarification from the Commission on the scope and affordability of the proposed policy;
  • the Government believes that any launcher policy will need to look carefully at customer requirements and current model for launcher development and production to ensure that the best option is taken forward for the EU's independent access;
  • this could involve a radical change to the current arrangement that is in place — the Government will therefore be seeking clarification from the Commission on what it envisages by a "real European launcher policy" and how it sees the governance structure developing; and
  • the Communication does not say anything about the Commission's strategic view for the future of the EU space industry in the long term, nor does it include any performance indicators against which progress can be assessed — the Government will continue to urge the Commission to address this deficiency.

3.20  Finally the Minister tells us that the Irish Presidency has indicated its wish to secure Council Conclusions on this Communication at the Competitiveness Council on 30 May.

3.21  In his Explanatory Memorandum on the draft Council Decision, document (b), the Minister, telling us that the Government supports the principle of an EU SST capability which draws upon existing sensors owned and operated by Member States (rather than development of new capability owned and operated by the Commission or another EU institution) and says that this would be regarded as best use of existing capabilities in a time of resource constraints.

3.22  In more detailed comments the Minister says that:

  • the Government recognises the importance of working with the EU, Member States and the ESA on an integrated approach to security in European space programmes and wider space policy, including in infrastructure and systems resilience;
  • it supports a coordinated international effort to improve SSA of which SST is the main, and most important element;
  • good SSA is vital in underpinning international efforts in striving towards a safer and more secure space environment;
  • this involves the surveillance of space, and the analysis and assessment of potential threats and hazards to space activities;
  • SSA/SST provides the ability to anticipate and respond to threats in a timely manner, thus reinforcing resilience, and national and international security;
  • SST is one of the means by which UK fulfils its obligations under the Outer Space Act 1986 in monitoring objects licensed for launch by the UK;
  • this EU initiative has the potential to enhance the Government's ability to fulfil these obligations under the Outer Space Treaties;
  • the Government recognises that SSA/SST to support a safer and more secure space environment is best achieved collectively;
  • the US maintains the strongest national capability through its space surveillance network, to which the UK contributes through RAF Fylingdales, with national coordination through the UK Space Operations Coordination Centre at RAF High Wycombe;
  • this arrangement gives the UK access to much better SSA than it could achieve alone, but it still does not meet all of its national needs, or those of UK-based commercial or civil operators;
  • as space becomes more congested, there is a growing need in the UK and other countries for a more holistic SSA picture and more predictive capabilities;
  • the proposed programme presents an opportunity for the UK to build on its existing civil SSA activities and build capability/capacity to serve its growing civil requirement via EU funding;
  • governance and management of the proposed system will require greater consideration and clarification in order to ensure that EU aspirations are practicable and deliverable and the Government will seek to exploit its expertise and experience in existing SST provision to facilitate this process and influence the evolution of the programme;
  • the role proposed for the EU SatCen is new and it will be important to seek verification from the Commission that these new functions are entirely compatible with its current competencies and capabilities;
  • the draft Decision could result in more staff at the EU SatCen, but it is being funded by a customer (in this case, the Commission), which is the customer-funding direction the Government wants the Centre to take, as opposed to fixed funding from Member States;
  • Member States should also retain ownership of the overall EU SatCen product, where security sensitivities may apply;
  • data security will be a fundamental prerequisite for the success of this support programme since close analysis of satellites for example can be sensitive; and
  • the draft Decision addresses data security but the Government will explore in negotiations whether the proposed arrangements are sufficiently robust to deliver the necessary level of protection.

3.23  On the financial aspects of the draft Decision the Minister says that:

  • the Commission's impact assessment sets out the estimated cost for options for the development of an EU capability on SST support services and concludes that a budget of €70 million (£60.4 million) over the period 2014-20 is needed;
  • the draft Decision does not set a cap for the level of expenditure for the programme and the Government will seek to include one in negotiations;
  • the EU funding envisaged for the programme would be drawn from other programmes provided for in the MFF for 2014-20, such as the Galileo Programme, Horizon 2020 and the Internal Security fund — therefore the proposal does not constitute a request for funds additional to the budget proposed for the MFF; and
  • the Government wishes to understand the Commission's rationale for proposing the Internal Security Fund as a source of funding since it is not apparent that it is within the scope of that programme.


3.24  Noting the Presidency's intention to have Council Conclusions on the Commission Communication, document (a), agreed at the Competitiveness Council in May, we presume that the Government will be ensuring that these either confirm the various clarifications it is seeking or do not pre-empt resolution of the caveats it has expressed to us. Accordingly we should like to have an account before that Council of the thrust of the proposed Conclusions. Meanwhile the document remains under scrutiny.

3.25  As for the draft Decision, document (b), before we consider it further we should like to have, in due course, an account of progress in the negotiations on the various issues drawn to our attention, including the financial implications, particularly the proposed use of the Internal Security Fund. Meanwhile this document also remains under scrutiny.

9   (32660) 8693/11 + ADDs 1-6: see HC 428-xxvi (2010-12), chapter 1 (11 May 2011) and Gen Co Debs, European Committee C, 23 May 2011, cols. 3-14. Back

10   (31718) 11137/10 + ADDs 1-2: see HC 428-ii (2010-11), chapter 19 (15 September 2010). Back

11   The Space Council is a ministerial body combining the EU's Council of Ministers and the ESA's ministerial council. Back

12   Copernicus was known formerly as GMES, Global Monitoring for Environment and Security. Back

13   See "Plan for Growth implementation update", HM Treasury and BIS, March 2013 at Back

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