Just as the commercial space industry reaches new peaks for the UK, it is safe to say that the timing of Brexit against the backdrop of Covid19, is unfortunate at best. On the 31st of January 2021, the UK kicked off the new decade with a ‘separation’ of sorts from the European Union.
Whilst there are still many facets of trade, travel, and economics to sort through, relations between the UK Space Agency (UKSA) and its European counterpart, the ESA, appear to be still intact. It could be argued that this industry isn’t exactly going through a ‘Brexit’ at all, so long as the UK continues to pump funds into what is seemingly a European space organization.
Brexit in Space
The UK is an impactful member of the international space community. Its notable contemporary efforts are the ever-expanding International Partnership Programme (IPP) from the UKSA, the current race to launch the first-ever vertical rocket into orbit from UK soil, as well as the ongoing manufacturing, and academic prowess of the island nation.
With every stride, it too makes a huge contribution to the international community at large. So how will this affect its future relations with the ESA? Whilst complicated and marred, there are some relatively simple takeaways to at present.
Firstly, to save any confusion, it must be made clear that the UK’s membership in the ESA remains intact, unaffected by Brexit. Despite its title, the ESA isn’t an EU organization, with nations such as Canada also being members.
However, there are several areas where the UK will no longer have any involvement, with the most notable losses being the UK’s role in the future developments of the Galileo and EGNOS programmes, Europe’s foremost satellite/GPS programmes. Whilst this will not affect end-users at a public level, it is still contentious within the UK aerospace industry.
The Copernicus Earth observation program was a distinct object of the debate as the UK has a rich history of involvement. Whilst there is an agreement in place for the UK to be able to participate in this EU/ESA-funded project, EU Space Regulation is yet to finalize the deal for the UK to participate as a third country for 2021-2027.
As per an official release:
“The UK will need to assess any potential exclusions applied to third-country participants in the Regulation against the agreement reached to ensure it receives a fair balance of rights in return for an appropriate financial contribution to the programme.”
Despite the relatively small size of the nation compared to many others competing in the space industry, the UK still pulls significant weight, and as such, the loss of its involvement would prove costly for all parties.
At the time of the referendum in 2016/2017, the UK space industry drew £5.5 billion in revenue from exports alone, giving the island-nation a 5.1% share of the global space economy. In terms of total income, this figure stood at £14.8 billion, an increase of just a billion from the previous year, with EU-funded programmes representing around 2.5% of the UK’s total income.
As per an interview with a UKSA spokesperson, the nation’s industry is looking ahead. Whilst the data from 2019/2020 is yet to be compiled and the Brexit transition well underway, the UK is adamant about remaining competitive with a collaborative spirit and will continue to offer some £300 million of yearly investment into the ESA.
Whilst the broader impacts of Brexit and actual implications of the move are yet to be seen for the UK space industry, there are already firms and manufacturers attempting to make sense of the new deal.
British Firms Impacted
That said, in 2018 it was reported that some 200 UK aerospace manufacturers had applied to be filed under the jurisdiction of regulators in EU countries, with British jet engine maker Rolls-Royce considering similar moves.
These concerns were ignited into action somewhat prematurely, yet not without reason. At this time, the UK was wrestling with political turmoil in the wake of the Brexit vote, with the then Prime Minister, David Cameron, resigning and Theresa May taking his place. Throughout her position as PM, Theresa May worked tirelessly to secure some ‘deal’ with the EU, a deal which wasn’t struck until the very end of 2020 under a new PM, Boris Johnson.
Business and industry had all the reason in the world to be concerned, and firms within the space industry were impacted all the same.
As this period of uncertainty through 2017 and 2020 remained extremely precarious, UK firms such as CGI UK lost out of extremely lucrative contracts in European project such as Galileo to Spanish firm GMV, who was instead awarded a $290 million contract.
In that same vein, Surrey Satellite Technology Ltd (SSTL), a leading firm in the Galileo navigation project, was forced in 2018 to move certain aspects of its work to Europe to continue working post-Brexit. Having provided 22 payloads in partnership with German firm OHB System worth some £126 million to date, SSTL labs is still under contract to finalize a further 12 payloads over the coming year, making the Brexit separation all that more difficult.
The story remains similar for most UK/EU space firms; Orbex, for example, is based in both Denmark and Germany, with offices also in the UK. The firm is one of a few companies that are leading the UK vertical launch ambitions. Now, to do with Orbex’s manufacturing facilities in Denmark, export permission might be necessary to transfer rocket parts to the UK. Yet, costs might be high, so moving to the Azores, as they’ve already mentioned the location as a backup site launch site, is plausible despite all the money the UKSA has invested in the company’s promise to launch from Sutherland.
It is types of ongoing relations that should signify healthy continued collaboration between jurisdictions. Still, with so many creases to iron out, namely in the field of export and import tariffs, we’ll likely see many firms seek a sort of dual existence between EU regulations and UK business.
Looking ahead, however, we can see that the UK is preparing for its future as a space-faring nation with rumours of an enormous manufacturing effort to be based on the island. OneWeb, a firm now owned by a consortium of the UK government and Indian conglomerate, Bharti Global, is building a mega constellation of high-speed broadband satellites, which may see the Florida-based Airbus supported manufacturing base move to the UK.
It is plain to see that Brexit has impacted an almost indescribable number of business and regulation elements. Yet, there is plenty to suggest that the space industry will remain in flux as it always has, simply due to the sector’s hyper-competitive nature.
With the ESA being perhaps a more active and influential industry player than the EU alone, international collaboration remains critical. As such, it’s unlikely that the UK’s role will be diminished all that greatly in the years to come.