Brexit consequences for Orbex Space and other companies in the UK space industry – Hometown Station | KHTS FM 98.1 & AM 1220 – Radio Santa Clarita
In the aftermath of Brexit, many UK businesses feared the separation would affect them. With the developing space industry currently relying particularly on foreign partners, many companies have therefore started to set up legal entities in Europe, fearing that Brexit could become a step backwards for the budding UK space sector. At the same time, companies like Orbex Space already had legal entities in Europe. But are these concerns justified?
Explanation of legal relations between ESA, EU and UK
Even though the UK created its own space agency, UKSA, in 2010, the country is still an active member of the European Space Agency, participating in its initiatives and allocating £ 300million per year to ESA projects. . This only seems confusing when you consider ESA as a purely European organization or an entity restricted to EU member states. In practice, ESA is neither, as the UK and even Canada are valid members.
On the other hand, some ESA projects remain limited to EU countries, especially in the military and defense field. So while the legal ties between the UK, UKSA and ESA remain intact, some changes will inevitably follow.
Post-Brexit changes for the UK space industry
One of the biggest post-Brexit changes for the UK is the loss of access to Galileo’s military and defense features. Regular users will still receive European satellite data on their mobile defense without any changes or restrictions. The UK and UKSA, however, are losing access to some sensitive data and will not be able to affect the future development of major European satellite navigation systems.
The UK’s participation in the Copernicus Earth Observation program is also in serious question. Technically there is an agreement for UK participation, but as the country is no longer a member of the EU (and this project is funded by EU states), some legal frameworks will need to be first established. In any case, according to the EU space regulation, the UK will only have one chance to participate as a third country, which may also impose some restrictions.
On the other hand, certain developments give rise to hope. British company OneWeb has reappeared after bankruptcy and continues to work on its constellation of satellites for broadband internet. Currently, the company is not 100% British as it is co-owned by a consortium of the British government and the Indian conglomerate Bharti Global. The silver lining is that the OneWeb constellation could result in the relocation of the US manufacturing base from Airbus to the UK.
What does Brexit mean for UK projects?
So does all of this mean that UK space projects will not be affected by Brexit? Yes and no. Currently, the UK and the EU are working on establishing new legal frameworks for mutual collaboration. Last year, the UK finally managed to strike a deal with the EU – something two prime ministers before Johnson have been actively working on. However, during the period of uncertainty, many UK based companies started to form legal entities in Europe. One of these companies is Orbex Space, with offices in the UK, Germany and Denmark.
The Danish-born launch provider plans to perform vertical launches with its Prime rocket from the Sutherland Space Hub. Yet its manufacturing facilities are based in Denmark, and it is not yet clear how much the export of rocket components will cost the company. Oddly enough, Orbex Space previously announced that it has a Plan B launch from the Azores. The turn is not very promising.
Orbex is not the only UK company facing challenges. Surrey Satellite Technology Ltd (SSTL), one of the leading satellite manufacturers working on Galileo navigation, has delivered only a portion of the payloads negotiated so far, and when final delivery is finalized, it is little likely the company will land another contract. In turn, CGI UK has already lost $ 290 million in contacts with ESA to the Spanish GMV.
So while Brexit does not envision any solid changes for the UK space industry, some adjustments may be needed. In particular, the UK and ESA will soon have to create a mutually beneficial legal framework. In the meantime, it would make sense to redirect more funding to native UK businesses and support local industry.
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