Introduction and Scope

Following SpaceX’s record-breaking USD1.75 trillion IPO in June 2026, the UK appears poised to benefit from increased investor confidence in the space industry. As arguably Europe’s leading destination for private space investment, the UK’s telecommunications, satellite and wider downstream space economy is hoping to enjoy renewed investor focus in the commercial opportunities enabled by advancing space technology.

This report outlines recent developments in space law in the UK, with a particular focus on changes that have occurred after, and in some respects build upon, the analysis written by Preiskel & Co LLP for Chambers Space Law 2025.

It examines the current architecture of UK space regulation, following the Outer Space Act 1986, Space Industry Act 2018 and the subsequent Space Industry (Indemnities) Act 2025 and Space Industry Regulations 2021.

It also provides an overview of some international developments, including EU space regulation and the proposed EU Space Act, and international standards (ISOs) on space sustainability.

This report addresses cross-cutting policy and standard-setting initiatives. These include the UK government’s response to the House of Lords “Space Economy” report, the evolution of UK-sponsored BSI space sustainability standards, the identification of space as a priority frontier sector in the Advanced Manufacturing Sector Plan 2025, and the priorities set out in the UK Space Agency’s Corporate Plan 2025–2026.

Finally, it highlights some of the UK government’s current space ambitions, notably the development of ISAM and the emergence of regulatory frameworks in these areas.

UK Space Law

Core statutory framework

The broad statutory and regulatory structure of UK space law is as follows.

• Outer Space Act 1986 (OSA).
• Space Industry Act 2018 (SIA), as amended by the Space Industry (Indemnities) Act 2025
• Key secondary legislation (2021).
• Space Industry Regulations 2021 (SIR).
• Spaceflight Activities (Investigation of Spaceflight Accidents) Regulations 2021.
• Space Industry (Appeals) Regulations 2021.
• Air Navigation (Amendment) Order 2021.
• Space Industry (Licence Exemption for Military Activities of Allies) Regulations 2025 (SI 2025/222).

The CAA is the central space regulator. Space activities are only licensable if consistent with the UK’s national interests, international obligations and national security, with the CAA empowered to impose bespoke licence conditions and financial penalties.

Recent emerging themes

These include:

• licensing complexity and timelines;
• liability and insurance;
• space sustainability; and
• the One Government Approach.

Recent UK developments

Since mid‑2025, there have been several notable developments to the UK space law landscape.

Space Industry (Indemnities) Act (December 2025) – resolving liability caps

The Space Industry (Indemnities) Act (2025 Act) amends the Space Industry Act 2018 (2018 Act).

The previous position (pre-2025) was that under Section 12 SIA, spaceflight operator licences “may” specify a limit on the operator’s liability to the government under Section 36 of the Act; however, this was permissive.

In practice, this created uncertainty for investors and operators, as there was no statutory guarantee that any given licence would include a cap or the level at which one would be set.

The post‑2025 position is that the 2025 Act amends Section 12(2) SIA so that an operator licence “must” specify a limit on the amount of the licensee’s liability under Section 36 in respect of the authorised activities.

Consequential amendments ensure that all relevant operator licence types meet this requirement.

The Act entered into force on 18 February 2026.

Practical implications are as follows.

• The 2025 Act provides significantly greater certainty that operators and financiers will not face unlimited liability to the state when operating from the UK.
• It improves the UK’s competitive position as a launch jurisdiction relative to states where liability caps remain unclear or entirely contractual.
• The Act aligns the statutory position more closely with the CAA’s earlier policy direction and in industry commentary (including Preiskel’s own focus on indemnity reform in its 2025 commentary).

UK Government response to the House of Lords “Space Economy” report (2026)

The House of Lords UK Engagement with the Space Committee’s report “The Space Economy: Act Now or Lose Out” (2025) is a focal point in the attached updates and in recent government policy.

The UK government’s response (January 2026) confirms several important policy decisions.

• Funding:
1. according to the House of Lords “Space Economy” report (2025), the UK spends significantly less on space than the EU average and its other international competitors;
2. Preiskel’s 2025 commentary anticipated greater use of industrial policy and funding to drive space growth; the government’s response to the House of Lords confirms this policy direction and gives concrete budgetary and institutional content to that vision; and
3. the government increased civil space spending through the UK Space Agency (UKSA) by approximately 8% for 2025/26, with nearly GBP3.5 billion allocated from 2025/26 to 2029/30. A further GBP2.8 billion is committed over 2026/27–2029/30, with a consolidated “spring space” publication (expected 2026) to set out co-ordinated space spending across government; and
• Institutional reform (One Government Approach) – UKSA and DSIT:
1. responsibility for civil and commercial space policy lies primarily with the Department for Science, Innovation and Technology (DSIT) and UKSA; and
2. in August 2025, the government announced that UKSA would be brought under direct departmental control and merged into DSIT’s Space Directorate by 1 April 2026, with the aim of strengthening coherence of space policy, reducing duplication and improving governance.
• Strategic priorities:
1. confirmed focus on five priority capability areas including:
1. Space Domain Awareness (SDA);
2. In Orbit Servicing;
3. Assembly and Manufacturing (ISAM);
4. Earth Observation (EO);
5. Position, Navigation and Timing (PNT); and
6. satellite communications, as laid out in the 2024 Space Industrial Plan and the 2025 Modern Industrial Strategy;
2. the government’s response also reinforces the strategic importance of Earth Observation (EO), particularly through Recommendation 31, which highlights the need to expand the use of EO data for downstream users and to improve access to EO datasets, such as the National Data Library; and
3. the merger of UKSA into DSIT and the formalisation of priority areas demonstrate that space law and policy are now central to UK industrial strategy.
• Space sustainability and debris removal:
1. UKSA is procuring a national Active Debris Removal (ADR) mission, with a multimillion‑pound contract targeting launch by late 2028, positioning the UK as an anchor customer for debris‑removal services.
• Connection with the European Space Agency:
1. the government’s response highlights a desire to maintain the UK’s current level of support for ESA programmes. The UK invested GBP1.7 billion at the ESA Council of Ministers in Bremen, November 2025, with further commitments set to be made in 2028. The government’s response mentions the outcomes of the ESA Council of Ministers 2025, including further investment planned in missions such as VIGIL (space weather), the UK-built Rosalind Franklin Mars rover, and commercial access-to-space initiatives through the European Launcher Challenge and Boost! Programmes.

However, in 2025, most other ESA countries substantially increased investment into ESA, whilst the UK maintained an almost constant level of investment into ESA (making the UK an exception). The UK is arguably drawing sovereignty more to a national level whilst the other ESA members of Europe are banding closer together.   

Defence‑related exemptions from the SIA

In late 2024, the government consulted on draft policy proposals to exempt certain defence-related activities from the SIA 2018.

The consultation covered activities conducted at Ministry of Defence firing sites by UK Armed Forces, allied forces and NATO-type organisations, proposing that such activities would be exempt from SIA licensing while remaining subject to other defence and international law obligations.

The government decided to proceed with the proposals and to legislate via secondary legislation, creating a more tailored regime for defence space activities and licensing frameworks. These proposals were implemented through the Space Industry (Licence Exemption for Military Activities of Allies) Regulations 2025 (SI 2025/222), made on 27 February 2025 and entered into force on 28 February 2025.

These developments sit alongside continued investment in defence space capabilities, including programmes such as TYCHE (launched in 2024) and forthcoming TITANIA, OBERON and JUNO satellites, highlighting the increased emphasis of space in UK defence policy.

BSI space sustainability standards – from consultation to updated codes

BSI Flex 1969 and BSI Flex 1971 have emerged as soft law instruments.

• BSI launched consultations on BSI Flex 1969 v1.0 (space sustainability – overarching principles) and BSI Flex 1971 v1.0 (space sustainability – launch) in 2025, with UKSA and DSIT sponsorship.
• In March 2026, the UK Space Agency announced updated versions of these standards following public consultation and industry engagement.
• BSI Flex 1969 now sets out ten principles to help organisations identify and manage environmental impacts across the full space activity lifecycle. It covers collision avoidance, debris mitigation, rendezvous and proximity operations, and protection of dark and quiet skies across the full lifecycle of space systems.
• BSI Flex 1971 has been strengthened into a more prescriptive code of practice for launch providers, emphasising early environmental impact assessment and mitigation. It focuses on reducing regulatory and licensing risks for organisations, clarifying how to ensure compliance.

The Advanced Manufacturing Sector Plan (2025)

The Advanced Manufacturing Sector Plan (23 June 2025), part of the UK’s Modern Industrial Strategy 2025, positions space as one of the UK’s six frontier industries alongside automotive, batteries, aerospace, advanced materials and agritech.

The Plan commits to scaling up space technologies through targeted investment and regulatory reform. For instance, it is in the process of introducing regulatory sandboxes for in-orbit servicing and manufacturing, led by the newly established Regulatory Innovation Office.

It acknowledges that the UK previously supported too many companies, universities and institutions across fragmented areas, limiting the ability to scale firms to commercially viable sizes. The UK aims to become a leading European space exporter by 2030 and requires a greater focus on particular capabilities to highlight where its strengths lie and need to be in the future. The government is focusing on five priority capabilities: satellite communications, positioning/navigation/timing, in-orbit servicing and manufacturing, space domain awareness and space data architecture.

The UK will implement a Private Investment Framework for Space, designed to attract private capital into strategically important space technologies, through public funding. This will encompass a mix of grants, procurement and co-investment mechanisms. The government also plans to leverage the UK’s financial services sector to position the UK at the centre of space finance.

Finally, space is embedded in dual-use and defence industrial policy, and major public R&D programmes. For dual-use satellite technologies, products and services, this Plan will increase funding on the five priorities in the Space Industrial Plan and Launch, including through a targeted funding package of up to GBP80 million over five years to ensure the sector can progress from innovation to industrialisation.

UK Space Agency Corporate Plan (2025-26)

The Advanced Manufacturing Sector Plan is closely linked to the UK Space Agency Corporate Plan. This Plan focuses on targeting capability development, commercialisation and investment. The government pledges to focus investment on a targeted set of markets and capabilities where the UK can excel.

ISAM investments and ambitions

ISAM describes the In-Space Servicing, Assembly and Manufacturing of assets directly in-orbit.

ISAM includes extending the working lives of satellites by refuelling and repairing them, through to the manufacture of large structures in space, including space stations and space-based solar power farms. Other opportunities for ISAM include taking advantage of microgravity conditions to manufacture products that cannot be created on Earth, including novel pharmaceuticals, new composites and alloys.

Therefore, the opportunities are broad and could lead to an in-orbit or lunar economy of products created in space.

The development of ISAM is not uniform across all areas. Companies working on in-space servicing, assembly and manufacturing are at vastly different stages in their development. Activities, such as commercial Rendezvous and Proximity Operations (RPO), have long demonstrated their capabilities, whilst other innovations, such as reliably transporting goods manufactured in space back to Earth, are in much earlier stages.

The UK Space Agency in its Corporate Plan 2025–26 committed to developing a long-term plan to advance ISAM capabilities. They aim to create a more stable and predictable environment to encourage innovation. The UK government seeks to capture up to 25% of the global ISAM market, which is projected to reach over GBP10 billion by 2031. This would give the UK a GBP2.7 billion market share by 2031.

As part of a GBP500 million national space programme announced in March 2026, the government allocated GBP105 million to develop civil ISAM capabilities.

ISAM is a fast-developing area with direct implications for licensing (Space Industry Act 2018 and associated regulations), liability, orbital slot and spectrum co-ordination, and M&A in the satellite and space infrastructure sectors. Any transaction involving satellite operators, on-orbit servicing companies, or space infrastructure players will increasingly require ISAM-related regulatory due diligence, particularly around UKSA licensing requirements and the UKSA’s evolving regulatory framework.

RPOs and the regulatory sandbox

Rendezvous and Proximity Operations (RPOs) are the process of manoeuvring a spacecraft close to another object for inspection, docking or servicing. This is critical for satellite servicing, debris removal and space station operations.

RPO capabilities are key to unlocking a serviceable in-space ecosystem, ensuring the sustainability and resiliency of space infrastructure.

There was a recent publication of the Stage 1 Independent Public Report on the Regulatory Sandbox for Rendezvous and Proximity Operations (RPO) delivered by the RPO Operators Consortium (Astroscale, ClearSpace and D-Orbit) for DSIT and UKSA. The Sandbox was the first of its kind in the UK and addressed the regulatory challenges associated with licensing missions in which one spacecraft approaches, operates near, docks with and provides services to another.

The sandbox initiative was designed as a structured, iterative mechanism to test how the existing regulatory framework under the Space Industry Act 2018 operates in practice when applied to complex, simulated RPO missions. Through collaborative workshops and mock licensing exercises involving regulators, insurers, technical experts and industry stakeholders, the sandbox process has identified key areas for clarification and reform.

RPO missions involve distinctive technical and legal challenges, including varying levels of spacecraft co-operation, indefinite mission scopes, cross-border involvement and dynamic risk profiles that necessitate closer scrutiny and potential regulatory adaptation. The outputs of the sandbox process are closely aligned with the UK government’s broader Space Regulatory Review 2024, which emphasised the need for clearer regulatory pathways to accommodate emerging technologies and mission types.

EU/European Space Law

EU Space Programme Regulation 2021/696 and fragmented national laws

The EU’s space law landscape is fragmented, with 13 national frameworks co-existing alongside the EU Space Programme Regulation 2021/696.

Whilst Regulation 2021/696 consolidates flagship programmes (Galileo, EGNOS, Copernicus, SSA, GOVSATCOM) and establishes EUSPA as the operational agency, it does not create a general EU space law. The resulting patchwork of national licensing and supervision rules increases compliance costs, creates duplicative authorisations and complicates scaling for operators.

The proposed EU Space Act

Legislative process and timing

The Commission’s proposal was published on 25 June 2025, and the public consultation ran from 15 July to 7 November 2025.

The Act aims to harmonise rules on space in the EU, with a particular focus on safety, resilience and sustainability.

Article 119 of the draft regulation indicates that, if adopted, the EU Space Act will apply from 1 January 2030, with certain transitional provisions.

By late 2025, a Danish Council Presidency compromise text had been circulated, and Competitiveness Council debates suggested broad support for the objectives but calls for clarification and simplification in specific provisions.

As of early 2026, informed commentary suggests adoption is unlikely before late 2028, with scope for significant amendment during trilogue negotiations.

Substantive refinements and external commentary

Recent commentary by law and policy institutions (eg, White & Case, ICLE, academic blogs) emphasises several points that complement Preiskel’s analysis.

• Regulatory objectives – Article 1(2) confirms safety, resilience and environmental sustainability as the core objectives, framed explicitly in response to geopolitical, cyber and physical risks to EU space infrastructure.
• Extraterritorial reach – commentators highlight that the Act adopts a market‑access approach analogous to the GDPR – many obligations will apply to non‑EU operators whose systems serve EU users or whose satellites are operated from EU territory. Crucially for the UK, the Act will apply to EU space businesses as well as to non-EU space businesses trading with Europe. This was further highlighted by the opinion of the Committee on the Internal Market and Consumer Protection in March 2026, that the Act should be amended to ensure “all operators selling services on the EU market must be abide by the same rules”.
• Economic impact – economic analyses focus on the risk of higher compliance costs for smaller operators alongside the potential benefits of a unified regime, reducing transaction costs and regulatory uncertainty.
• National security clause – academic critique has targeted the breadth of the proposed national security carve-outs, suggesting these may undermine legal certainty and tilt the balance away from free movement and competition.

For internal purposes, these developments underline the need to treat the EU Space Act as a central consideration for any UK or international client intending to serve EU customers.

International sustainability standards

ISO 24113 and ISO 23312 establish debris mitigation objectives and detailed spacecraft requirements, minimising orbital debris, preventing break-ups, managing collisions, and ensuring safe disposal and re-entry processes. ISO 24330 is useful for RPO participants as guiding principles for sustainability and re-entry risk.

Summary

UK focused matters

For UK-centric advisory and transactional work, the key developments are as follows.

• Statutory liability caps under the Space Industry (Indemnities) Act 2025, which should be analysed carefully in due diligence and reflected in contractual risk-allocation provisions for launch and in-orbit services.
• The emerging defence-related exemptions from the SIA, which may affect whether Armed Forces and allied operations proceed under civil licences or separate defence regimes.
• The institutional reconfiguration of UKSA within DSIT and the explicit industrial-strategy framing of space policy, which may create opportunities for clients to engage with procurement-led initiatives (eg, ADR missions, ESA cofunded programmes).
• The increasing likelihood that CAA and counterparties will reference BSI Flex 1969 and 1971 as benchmarks for “good industry practice” in sustainability and STM.
• The priorities for funding, investment and regulation laid out in the Advanced Manufacturing Sector Plan (2025) and the UK Space Agency Corporate Plan (2025–26).
• The increased focus on improving regulations for ISAM, particularly following the expected completion of the Independent Public Report on the Regulatory Sandbox for RPO.

EU-facing and cross-border matters

For clients operating across the UK and EU, or seeking to serve EU markets from the UK:

• the EU Space Act must be treated as a major source of future compliance obligations, with extraterritorial elements;
• transaction documentation and regulatory strategy should anticipate eventual binding EU requirements on safety, resilience and sustainability, particularly where satellite services are critical to EU infrastructure; and
• there may be scope to participate in national and EU-level consultations (directly or via trade associations) to shape implementing measures and guidance.

Conclusion

UK government is projecting the right sound bites to capture market share in these exciting post-SpaceX IPO times, including the Minister for the Digital Economy recently declaring that government:

“Will focus our investments on the technologies required to build the capabilities we need, on scaling up our most promising businesses, and on delivering rapid and sustained growth.”

This is coupled with the new “One Government” approach to deliver these ambitious goals.

Whilst the UK has recently been prioritising the space sector in an unprecedented fashion, the ability to attract significant private investment into the UK space sector remains uncertain. With the UK pulling further away from Europe, and much uncertainty concerning the draft European Space Act, much remains to be seen about the UK’s global position in space.