UK Space Law Explained: How the CAA Licenses Satellites and Launches, and What Changes on 1 December

The UK has quietly become one of the more interesting places to license a satellite. On the government’s own account, UK operators generate most of the world’s demand for third party liability cover in orbit. It has a domestic launch industry trying to get off the ground in Shetland, and a reform programme built on the 17 recommendations of its Space Regulatory Review. On 8 September 2026, the same day it published a new UK Space Strategy, the government announced a package of changes to liability and insurance that will reshape the cost of an orbital licence from 1 December.

This explainer sets out how UK space licensing works: which Act applies, what each licence covers, how liability is capped, and what changes in December. It is written for operators and their advisers, including those outside the UK who may need a UK licence because of where their company is incorporated.

Two Acts, one regulator

The older statute is the Outer Space Act 1986. Section 2 applies it to “United Kingdom nationals, Scottish firms, and bodies incorporated under the law of any part of the United Kingdom.” It requires them to hold a licence to launch or procure the launch of a space object, operate a space object or carry out any other activity in outer space. Since 2021 it applies only to activities carried on outside the UK. A British company operating a satellite from a ground station in another country, or procuring a launch from New Zealand or the United States, needs an Outer Space Act licence.

The newer statute is the Space Industry Act 2018, which received Royal Assent on 15 March 2018 and came into force on 29 July 2021 together with the Space Industry Regulations 2021. It regulates space activities, sub-orbital activities and associated activities “carried out in the United Kingdom”. Section 3 prohibits anyone from carrying out spaceflight activities in the UK or operating a spaceport in the UK without a licence. The 2018 Act also amended the 1986 Act so that the two do not overlap: activities in the UK fall under the 2018 Act, activities abroad under the 1986 Act.

Both are administered by the Civil Aviation Authority, which has been the UK’s space regulator since the 2018 Act came into force. Policy sits with the UK Space Agency, which according to the September 2026 government response now operates within the Department for Business, Innovation, Science and Trade.

Which licence do you need?

The 2018 Act creates three kinds of licence: operator licences, spaceport licences and range control licences. In practice the CAA groups them by activity.

An orbital operator licence allows a person to procure the launch of a space object, operate a space object in orbit, or conduct other activity in outer space. The CAA explains that it “is not limited to activities in Earth’s orbit”. The same licence type is issued under the 2018 Act for activities from within the UK and under the 1986 Act for activities from outside it. Where one company operates the satellite and another procures the launch, each needs its own licence.

A launch operator licence authorises launches from the UK, whether vertical rockets or horizontal launches using a carrier aircraft. A spaceport licence authorises the operation of a launch site, and a range control licence covers the services that manage the range during a launch.

The CAA’s guidance on the orbital operator licence sets out the practicalities. The application fee is £6,500, non-refundable. Assessment takes “at least 6 months”, and a novel or complex mission, “for example close proximity operations or in orbit manufacturing”, may take at least 12 months. Applicants answer technical, spectrum, financial and national security question sets, and the CAA must be satisfied on tests that include the UK’s international obligations, national interest, financial resources, fit and proper persons and safety. Applicants are expected to show that risks are “as low as reasonably practicable”.

Liability: strict on the ground, capped for the government

The UK is internationally liable for damage caused by space objects for which it is a launching State, under the Liability Convention discussed in our piece on space debris liability. Domestic law passes that risk back to operators in two ways.

First, section 34 of the 2018 Act makes the operator strictly liable to third parties for injury or damage caused on land or water in the UK, or to aircraft in flight, by a craft or space object used for spaceflight activities, or by anything falling from it. Damages are recoverable “without proof of negligence or intention or other cause of action”. Section 34 also excludes liability in trespass and nuisance for activities carried out in compliance with the Act.

Second, both Acts require operators to indemnify the government against claims arising from their activities: section 10 of the 1986 Act and section 36 of the 2018 Act. This indemnity is what the UK relies on if another State brings a claim against it.

The key protection for operators is the cap. Under the 1986 Act, the indemnity has been subject to any limit specified in the licence since 2015. Under the 2018 Act, section 12(2) originally said a licence “may” specify a limit. The Space Industry (Indemnities) Act 2025, a Private Member’s Bill that received Royal Assent on 18 December 2025, changed that to “must”, with effect from 18 February 2026. The government says the change means “no UK operator will be exposed to unlimited liability” under that indemnity.

For standard orbital missions the limit has been €60 million, and operators insure against it. Our explainer on space insurance covers how that third party liability cover is priced.

What changes on 1 December 2026

The space regulatory financial tools package, published on 8 September 2026, answers a consultation the UK Space Agency launched on 14 September 2023. It contains five measures.

Variable liability limits. For orbital operations licence applications received on or after 1 December 2026, under either Act, the flat €60 million limit for standard missions is replaced by three tiers: £50 million (the default, described as the equivalent of the current €60 million), £20 million, or £0. Operators can voluntarily submit evidence against two criteria. The first is whether the operator has registered for, and had an audit under, both UK Space Agency funded cyber security and physical security assessment schemes. The second is whether it has “demonstrated having access to the latest information on sustainability”, shown by supplying a copy of ISO 24113, the British Standards Institution’s Flex 1969 space sustainability standard, or evidence of paid access to the Earth and Space Sustainability Initiative’s updates and database. Meeting one criterion brings the limit to £20 million; meeting both brings it to £0. Licences granted on earlier applications will not be reassessed.

Waivers for innovative missions. Orbital licences issued from 1 December 2026 for in-orbit servicing, assembly and manufacturing or lunar missions will carry a £0 limit unless the applicant asks otherwise, for missions planned to launch before the end of 2030. That covers rendezvous and proximity operations, including the client object being serviced, and the government will review the policy in 2029. A limit and insurance requirement still apply to procuring the launch.

Alternative insurance models. The government endorses sector-led mutuals and collective policies covering several operators, and says it will explore a “Space Re” scheme along the lines of Pool Re and Flood Re, without any commitment.

Decommissioning funds. Funds set up to deorbit a constellation if its operator becomes insolvent will be wound up, with the CAA taking a proportionate approach to financial security instead.

Currency. Liability limits in orbital and launch procurement licences move from euros to sterling for applications received from 1 December 2026.

The UK Space Agency will publish a technical framework on the criteria before 1 December, and the government expects a second iteration, possibly with new criteria and higher bands, in late 2027 or early 2028.

Is the trade a good one?

I think the direction is right and the first set of criteria is weak.

The case for lower limits is strong. The government’s own earlier call for evidence found the UK’s approach to liability limits uncompetitive, and the response notes that most global demand for third party liability cover comes from UK operators. A £50 million default is no worse than today, and the ISAM and lunar waiver addresses a real problem: the government says it is meant to help de-risk the insurability of missions that have little precedent. Our piece on the Swift servicing attempt shows how awkwardly existing regimes handle these missions.

But the route to £0 is easy. The sustainability criterion is met by showing access to standards documents, and the government states that this “does not mean that you need to have followed these guidelines and standards in your mission design”, unless the CAA requires it. For the security criterion, operators are not expected to provide the audit reports or show what they did in response. Reducing an operator’s indemnity to zero shifts any uninsured international claim onto the UK taxpayer, because the UK’s liability under the Liability Convention does not change. I would expect the technical framework, or the second iteration, to tie lower limits to conduct rather than paperwork.

Launching from UK soil

The 2018 Act was passed to bring launch to the UK, and the CAA’s public list of licences tracks progress. Spaceport Cornwall at Newquay received the first spaceport licence on 15 November 2022. Shetland Space Centre Limited, which operates SaxaVord on Unst, received its spaceport licence on 15 December 2023 and a range control licence on 23 April 2024.

Launch licences have followed. Virgin Orbit received one on 20 December 2022 for its horizontal launch from Cornwall, which failed to reach orbit in January 2023, and the company is now defunct. Rocket Factory Augsburg received a vertical launch licence on 14 January 2025 and Skyrora on 24 July 2025. On 1 October 2026 the CAA granted a launch licence to HyImpulse UK for its SR75, a suborbital research rocket that the company hopes to fly from SaxaVord in spring 2027. The CAA’s Sue Kee said: “Momentum continues to build towards vertical launch from the UK.”

For operators, the main point is that the same Act, the same regulator and the same liability architecture apply whether the activity is a launch, a spaceport or an orbital mission from UK soil. Launch services agreements still need to allocate risk between the parties, as our piece on cross waivers and indemnities explains.

How it compares

The UK model is unusual in one respect: a single regulator licenses launch, spaceports and orbital operations, and the same licence type covers activities both at home and abroad. In the United States, launch and reentry licensing sits with the FAA under Part 450, spectrum and orbital debris with the FCC, and remote sensing with NOAA. In the EU, the proposed EU Space Act would add an EU-wide layer of rules alongside existing national space laws. For non-UK operators the practical question is often whether a UK incorporated subsidiary brings the whole mission within the 1986 Act. It usually does, because section 2 turns on nationality and incorporation, not on where the satellite was built or launched.

What I would watch

The first is the UK Space Agency’s technical framework, due before 1 December 2026. It will show how strictly the security and sustainability criteria are applied and how evidence is reused across applications by the same operator.

The second is updated CAA guidance on liability and insurance, and how it treats policies written in other currencies once limits move to sterling.

The third is the multi-mission licence. The government says the CAA and UK Space Agency are exploring how to authorise multiple missions under a single licence through a regulatory sandbox, and that application fees will be considered as part of that work. For constellation operators, that may matter more than the liability tiers.

The fourth is the first vertical launch from SaxaVord. A successful launch would test the strict liability rule in section 34, the range control regime and the CAA’s capacity to supervise live operations, not just paper applications.

Anuj KumarEditor-in-Chief

Anuj Kumar is the founder of Legal Desire Media and publishes Fashion Law Journal and Space Law Journal.

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