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Brexit Consequences For Orbex Space And Other UK Space Industry Companies

Brexit for Space Industry: A Boost or Stagnation

In the wake of Brexit, many UK businesses feared the separation would affect them. Currently developing space industry particularly relies on foreign partners, so many companies started creating legal entities in Europe fearing that Brexit would become a step back for the budding UK space sector. At the same time, companies like Orbex Space already had legal entities in Europe. But are those concerns justified?

ESA, EU & UK Legal Relations Explained

Even though the UK established its own space agency, UKSA, in 2010, the country is still an active member of the European Space Agency, taking part in its initiatives and allocating 300 million pounds a year to the ESA projects. This only seems confusing if one thinks of the ESA as a purely European organization or an entity restricted to the EU member states. In practice, ESA is neither of those, as both the UK and even Canada are valid members.

On the other hand, some ESA projects are still restricted to EU countries — in particular, in the military and defense sphere. So, while 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 losing access to Galileo’s military and defense functionality. Regular users will still receive European satellite data to their mobile defense without any changes or restrictions. The UK and UKSA, however, lose access to some sensitive data and will not be able to affect further development of the leading European satellite navigation systems.

The UK’s participation in the Copernicus Earth observation program is under big question as well. Technically, there is an agreement for the UK to take part, but since the country is no longer a EU member (and this project is funded by EU states), some legal frameworks will have to be established first. In any case, according to the EU Space Regulation, the UK will only have a chance to participate as the third country, which may impose certain restrictions as well.

On the other hand, some developments do inspire hope. British company OneWeb has re-emerged after bankruptcy and keeps working on its satellite constellation for broadband Internet. Currently, the company is not 100% British since it is co-owned by a consortium of the UK government and the Indian Bharti Global conglomerate. The bright side is that OneWeb constellation may result in the US Airbus manufacturing base moving to the UK.

What does Brexit mean for UK projects?

So, does all of these mean that UK space projects will be unaffected by Brexit? Yes and no. Currently, the UK and 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 forming legal entities in Europe. One of such companies is Orbex Space, with offices in the UK, Germany, and Denmark.

The Denmark-originating launch provider, plans to carry out vertical launches with its Prime rocket from Sutherland Space Hub. Still, its manufacturing facilities are based in Denmark, and it is not yet clear how much rocket component export will cost the company. Curiously, Orbex Space previously announced that it has a plan B to launch from the Azores. The turn is not a very promising one.

Orbex is not the only UK company facing challenges. Surrey Satellite Technology Ltd (SSTL), a leading satellite manufacturer working on Galileo navigation, delivered only part of the negotiated payloads so far, and when the final delivery is finalized, it is unlikely that the company will secure another contract. In turn, CGI UK already lost $290 million worth of ESA contacts to Spanish GMV.

So, while Brexit does not envision solid changes for the UK space industry, some adjustments might be necessary. 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 British companies and support local industry.

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Brexit Consequences For Orbex Space And Other UK Space Industry Companies

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