study on societal riteria in upstream space infrastructure ... · this executive summary sets out...

Study on Societal Criteria in Upstream Space Infrastructure Procurement

Final Report

12th April 2019

Lead authors:

Mark Whittle (CSES), Emanuela Sirtori (CSIL)

Contributing team of authors and researchers:

Malin Carlberg (CSES) Alessandra Caputo (CSIL) Ruhland Sascha (KMFA) Daniela Kretz, IDEA Consult Carla Filotico (SpacetecPartners)

Contents

Abstract 1

Executive Summary i

Study objectives and scope ............................................................................................................. i

Legal analysis and feedback on practical feasibility ......................................................................... i

Options analysis – integrating a societal criteria approach in 2021-2027 ....................................... ii

Scenario analysis ............................................................................................................................ ii

The overall benefits ...................................................................................................................... iv

The overall costs ............................................................................................................................ v

Overall findings .............................................................................................................................. v

Recommendations ......................................................................................................................... v

1. Introduction 1

1.1 Study objectives and background ........................................................................................ 1

1.2 Study scope ......................................................................................................................... 2

1.3 Methodology and desk and field research undertaken ........................................................ 3

1.4 Report structure .................................................................................................................. 4

2. High-level analysis of the feasibility and appropriateness of societal criteria 5

2.1 Introduction ........................................................................................................................ 5

2.2 High-level summary of benefits ........................................................................................... 5

2.3 Analysis of Legal Feasibility .................................................................................................. 6

2.3.1 Summary of the Procurement Rules applicable to the European Space Programme ....... 6

2.3.2 Key issues – legal feasibility ................................................................................................ 7

2.4 Analysis of Practical Feasibility ........................................................................................... 13

2.4.1 Feedback on environmental criteria ................................................................................ 13

2.4.2 Feedback on innovation and knowledge creation criteria ............................................... 17

2.4.3 Feedback on employment criteria ................................................................................... 22

2.5 Analysis of benefits, costs and challenges .......................................................................... 24

2.5.1 Feedback on the benefits ................................................................................................. 25

2.5.2 Summary of benefits, costs and challenges ..................................................................... 26

3. Scenario analysis 30

3.1 Identification of scenarios ................................................................................................. 30

3.2 Scenario 1 – Mandatory or Voluntary Requirement Relating to Space Debris Mitigation and Remediation ............................................................................................................... 30

3.2.1 Problem definition – space debris (summary overview) ................................................. 30

3.2.2 Baseline situation (current state of play, technological developments, technology readiness) ......................................................................................................................... 31

3.2.3 Possible sub-scenarios ...................................................................................................... 40

3.2.4 Costs and benefits ............................................................................................................ 41

3.2.5 Advantages and disadvantages ........................................................................................ 51

3.2.6 Feasibility assessment ...................................................................................................... 53

3.3 Scenario 2 - An award criterion for rewarding minor innovations by companies ............... 57

3.3.1 Problem definition ............................................................................................................ 57

3.3.2 Baseline situation ............................................................................................................. 58




3.4 Scenario 3 – Different mechanisms to promoting innovation adoption in the upstream space sector. ..................................................................................................................... 63

3.4.1 Problem definition ............................................................................................................ 63

3.4.2 Sub-scenarios ................................................................................................................... 64

3.4.3 Baseline situation ............................................................................................................. 65




Annex 1 - Options analysis 79

Assessment of overall feasibility .................................................................................................. 79

Option 0 – Status quo option in new MFF 2021-2027 ................................................................ 82

Option 1 – Mandatory approach with the inclusion of several societal criteria ......................... 82

Option 2 – Mandatory approach with the inclusion of limited societal criteria, but with promotion of voluntary approach to mainstreaming the inclusion of other societal criteria .............................................................................................................................. 82

Option 3 – Voluntary approach to mainstreaming the inclusion of societal criteria .................. 82

Annex 2 - Bibliography 84

Annex 3 - List of interviews 93

Annex 4 – Scenario 1: Problem definition – space debris (detailed assessment). 95

Annex 5 – Ecodesign 101

Tables Table 1.1 – Interview programme .......................................................................................................... 3 Table 2.1 - The C1-C4 clauses ................................................................................................................ 10

Table 2.2 – Indicators of job creation for EU Space Programmes ........................................................ 22 Table 2.3 – Benefits, costs and challenges to the inclusion of societal criteria in upstream space infrastructure procurement .................................................................................................................. 27 Table 3.1 – Components of ESA’s Clean Space Strategy relevant to space debris mitigation and removal technologies ............................................................................................................................ 31 Table 3.2 - Requirements in ESA’s Space Debris mitigation guidelines ................................................ 33 Table 3.3 - Sub-scenarios towards effective Space Debris Mitigation and Removal. ........................... 40 Table 3.4: Overview of planned ADR/OOS missions worldwide (realistic) ........................................... 45 Table 3.5: Overview of planned ADR/OOS missions worldwide (speculative) ..................................... 46 Table 3.6 - Documentary evidence of the costs of ADR missions ......................................................... 48 Table 3.7 - Assessment of the feasibility of different sub-scenarios relating to space debris ............. 53 Table 3.8 - Phases in space engineering ............................................................................................... 64 Table 3.9 - Feasibility assessment of sub-scenarios under Scenario 3 – different mechanisms to promote innovation .............................................................................................................................. 77

Figures Figure 3.1: Key requirements of ESA/ADMIN/IPOL(2014)2 (image right), as derived from ISO 24113 (image left)- SpaceTec Partners ............................................................................................................ 33 Figure 3.2: Expected costs and benefits - mandatory requirement to ensure that satellites are removable in case of unsuccessful EOL disposal, or premature failure ............................................... 43 Figure 3.3: Costs of ADR missions and relationship with the number of removed objects/ mission... 49 Figure 3.4: Assessment of the costs and benefits of ADR missions ...................................................... 51 Figure 3.5: Expected costs and benefits for a voluntary award criterion on minor innovation ........... 61 Figure 3.6: Pre-commercial Procurement v. Public Procurement of Innovations ................................ 69 Figure 3.7: The costs and benefits of a ‘first contract’ approach to the development of capacities ... 74 Figure 3.8: Expected costs and benefits of a PCP approach ................................................................. 75

Case Studies Case Study 1-1 - Methodology overview ................................................................................................ 3 Case Study 2-1 – Environmental requirements in NASA procurement ................................................ 14 Case Study 2-2 – Barriers to the inclusion of new technologies/ innovations: Green propellants ...... 14 Case Study 2-3 – Green Public Procurement (GPP) .............................................................................. 16 Case Study 2-4 – Knowledge spillovers generated by the Canadian Space Agency contracts ............. 21 Case Study 3-1 - Results of a pilot study on Life Cycle Assessment (LCA) ............................................ 35 Case Study 3-2 – Enforcing environmental criteria in CERN procurement .......................................... 36 Case Study 3-3 – The NanoRacks-Remove Debris project – ADR demonstration project ................... 39 Case Study 3-4 – Case study: ADR-related considerations in the Copernicus Space Component ........ 52 Case Study 3-5 – Commercial Orbital Transportation Services (COTS) Programme – Stimulating the Technical Capabilities of the Commercial Sector. ................................................................................. 67 Case Study 3-6 - Case study on use of PCP-type approach by NASA .................................................... 71

Abstract

Abstract

The study assessed the feasibility of including societal criteria in upstream space procurement within the European Union Space Programmes (“EUSP”), Copernicus, Galileo and EGNOS. The three societal criteria addressed in the study were: environmental, innovation and employment-related criteria.

The study required carrying out three tasks: Task 1) Investigate the legal feasibility of including societal criteria in the procurement of infrastructures for the EUSP, Task 2) Estimate the impact of including selected societal criteria (environmental, innovation/ knowledge-related and employment) and Task 3) Draw conclusions regarding the most appropriate societal criteria to be included in future procurement (environmental, innovation/ knowledge-related or employment) and procurement activities best suited to societal criteria.

Overall, the following main findings and pre-conditions of a societal criteria approach are in place:

• A societal criteria approach would be legally feasible to implement. Since 2014, the EU’s legal framework (the EU Financial Regulation and revised 2014 EU Public Procurement Directive 2014/24/EU) for public procurement has explicitly allowed such an approach, provided that the contracting authority ensures clear links to the contract’s subject matter.

• An incremental approach to the introduction of a societal criteria approach would be most effective. This could be achieved, for example, by making one or two criteria mandatory, supplemented by voluntary criteria, which could be integrated into award criteria.

• Contracting authorities already have some relevant experience in implementing environmental and innovation criteria within existing EUSP procurement (e.g. the life-cycle costing approach, and support for the development of early-stage technologies). It is therefore more a question of formalising and systematising existing approaches than starting from scratch.

• Nevertheless, implementing such an approach would require resources to be committed by the European Commission and ESA to make it a success, since a societal criteria approach would need to be implemented throughout the contractual implementation lifecycle, especially in planning for procurements, selecting a contractor, and monitoring compliance with societal criteria.

• There would also be a need for technical capacity-building and implementation guidance for contracting authorities for implementing and monitoring some criteria (e.g. social and employment). Contracting authorities already have broadly the requisite expertise, although knowledge and understanding of different aspects of societal criteria is spread across different functions (e.g. legal, administrative procurement specialists, technical). External support could be brought in wherever necessary.

• Industry should be forewarned as early as possible about the inclusion of one or two mandatory societal criteria in upstream space procurement (e.g. space segment, ground segment), at least for some procurements in the EUSP in 2021-2027.

Key findings in terms of the costs and benefits of such an approach are that overall, the benefits would outweigh the costs. There would be strategic benefits of going ahead with a societal criteria approach in the 2021-2027 period, such as protecting Europe’s strategic access to space by addressing the problem of space debris mitigation and remediation, and heightening attention to the EUSP’s potential positive effects on the environment and innovation. In general, employment-related criteria were found to be less feasible to implement than other criteria, due to different challenges and constraints (WTO rules, high monitoring costs, and trade-off with efficiency goals pursued by industry).

Abstract

To make the analysis concrete, three scenarios were specified to examine different possible ways of incorporating societal criteria into upstream space procurement, and were examined in-depth. The first focused on space debris mitigation and remediation, the second on encouraging industry to introduce minor innovations, and the third examined different ways of systematising the embedding of innovation within the EUSP, including through the role of early TRL precursor programmes (e.g. ESA programmes, Horizon 2020 Space) and the possible role of additional funding mechanisms outside traditional procurement, such as the role of a first contract approach. All three scenarios were found to be feasible, although with differing levels of costs, as detailed in the report. The easiest and cheapest societal criterion to implement was the use of award points to reward contractors able to demonstrate their capacity to deliver minor innovations during contract delivery in their bids.

The high-level recommendations deriving from the study are outlined below:

Recommendation 1: A societal criteria approach should be implemented in the new MFF 2021-2027, provided its introduction is gradual.

Recommendation 2: A holistic approach should be implemented, drawing on available mechanisms and instruments, including those outside the EUSP through precursor procurement, which feeds into the EUSP (e.g. direct contract R&D or pre-commercial procurement (PCP). A first contract approach could be implemented either through the EUSP or through Horizon Europe.

Recommendation 3: Since funding is concentrated in upstream space investment in the space segment, the adoption and implementation of a societal criteria approach in upstream procurement the area with the greatest potential benefits, although opportunities exist as well in midstream and downstream procurements

Recommendation 4: The European Commission could award upstream space procurement contracts, using at least one environmental-related societal criterion as a mandatory requirement (e.g. mandatory removal of satellites at the end of their lifetime).

Recommendation 5: An award criterion could be included in EUSP procurements related to the capacity of contractors to implement incremental innovation during contract execution. This “innovativeness” criterion could be given a 5-10% weight in the total score of the tender.

Recommendation 6: Funding for demonstration projects could be increased to enable the accelerated development and testing of new innovations and technologies that respond to the needs of the EU Space Programme.

Recommendation 7: The European Commission should take political leadership on the inclusion of societal criteria. In particular, it should inform the European space industry as early as possible of its plans to use societal criteria. The Commission could also encourage the wider-scale adoption of societal criteria by other actors (e.g. ESA, Member States).

Executive summary

i

Executive Summary

This Executive Summary sets out the overall findings from the “Study on Societal Criteria in Upstream Space Infrastructure Procurement”. The study research was undertaken between August 2018 and March 2019.

Study objectives and scope

The study’s purpose was to explore the feasibility of including societal criteria in upstream space procurement within the European Union Space Programmes (EUSP). The programmatic scope was on Copernicus, Galileo and EGNOS. The three societal criteria that were reviewed were: environmental, innovation and employment. Whilst the focus was on upstream space procurement, the study was not confined to the space segment, since consideration was also given to the inclusion of such criteria in the ground segment.

Legal analysis and feedback on practical feasibility

A societal criteria approach to upstream space infrastructure procurement is legally feasible, irrespective of whether EU or ESA procurement rules are utilised, provided that there is an appropriate link to the subject of the contract. The research found that some upstream space procurements are tendered under EU procurement law, whereas others are procured through the ESA rules. In procurements contracted using EU legislation, the EU Financial Regulation and the Public Procurement Directive (Directive 2014/24/EU) are applicable. Societal criteria are explicitly referenced in the recast Directive, although the inclusion of such criteria was also possible under pre-existing directives. The ESA rules (minus the geo-return and the ESA industrial policy) are also used for some EUSP procurements (e.g. Galileo Ground Segment, contract R&D within H2020 Space). These do not prohibit the use of societal criteria.

Regarding feedback on the practical feasibility, the scope to include societal criteria depends on factors such as: whether there are proven (and alternative) technologies and technical solutions that would allow more stringent environmental or innovation-related criteria to be mandatorily required during procurements. The extent to which a high level of customisation is required for particular procurements is a further issue that may complicate the inclusion of such criteria. Nevertheless, since some environmental and innovation-related considerations have already been incorporated into ESA and Commission-managed procurements, it is more a question of formalising the approach and making the inclusion of societal criteria more systematic, rather than starting from scratch.

There was strong support for a societal criteria approach among most interviewees from contracting authorities. However, further capacity-building and/ or external support could be needed in relation to strengthening understanding of how to implement social and employment criteria.

In terms of feedback from industry, there was general acknowledgement of the growing importance of environmental-related considerations and of the need to be ever-more innovative in the design and manufacturing of the next generation of satellites, and a broad recognition of the growing pressure for the EUSP to demonstrate that steps are being taken to take societal criteria into consideration in procurement. From an industry perspective, a key challenge is the importance of ensuring that any mandatory requirements are proportionate, and do not impose unnecessary administrative and substantive compliance costs on industry. Large primes stressed the importance of keeping industry informed upfront about any forthcoming developments relating to the inclusion of societal criteria, to allow them to plan ahead and to consider such criteria more explicitly not only during procurement, but to embed innovation and environmental considerations more systematically in R&D&I processes

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looking ahead to the development of new generations of satellite navigation and earth observation satellites.

Various challenges to implementing societal criteria effectively were identified, but possible means of overcoming and remediating these challenges were identified. Examples are the need for contracting authorities to ensure that there is sufficient technical capacity internally to implement criteria and that for criteria where they have less expertise (e.g. the social and employment dimension), external expertise and technical support can be brought in.

The research found that an incremental, rather than a big bang approach to the integration of societal criteria would be preferable. Therefore, a possible way forward would be to concentrate on formalising and systematising criteria which stakeholders are already familiar with. For example, in the space segment, the European Commission and ESA already have expertise in managing and implementing upstream space procurements in a way that integrates at least some environmental and innovation-related considerations. It is therefore a matter of building on ways in which such criteria are already being integrated. For example, ensuring that the technological solutions developed by primes are ‘fit for purpose’, and keeping track of innovative developments in space technologies globally are elements that are already built into some contractual negotiation processes (e.g. the competitive dialogue procedure) for the procurement of satellites.

Options analysis – integrating a societal criteria approach in 2021-2027

An analytical framework was developed during the study based around the mapping of alternative policy options, such as (1) maintaining the status quo (2) adopting a mandatory approach (3) a voluntary approach to societal criteria and (4) a combination of the two.

The research found that a number of options relating to the implementation of a societal criteria approach in the 2021-2027 period were feasible. A central finding was that a mandatory approach to the implementation of one or two criteria in the new MFF could be complemented by the implementation of additional voluntary criteria i.e. mainstreaming societal criteria in at least some award criteria. For example, the inclusion of a small number of award points (e.g. 5-10) in procurement to reward prospective contractors able to demonstrate they have incorporated minor innovations into their technical proposals could be used as a means of encouraging bidders to compete and differentiate their competitive offer on the basis of societal criteria (in addition to offering reliable technical solutions, which would continue to be the main determinant of contract award).

Scenario analysis

Having clarified that it is feasible to implement a combination of mandatory and voluntary criteria in 2021-2027, a scenario analysis was then undertaken of three possible scenarios. The findings from the assessment of each scenario are now presented.

Scenario 1 - Space Debris Mitigation and Remediation required an assessment of several sub-scenarios, namely: 1.1) mandatory compliance with the ESA Space Debris Mitigation Guidelines 1.2) mandatory requirement for contractors to make their satellites ‘removable” (in case planned EOL disposal is unsuccessful) and 1.3) mandatory requirement for mission owners and contractors to contribute to the cost of future Active Debris Removal (ADR) missions, in case of unsuccessful post-mission disposal (PMD) measures. The findings were that all three sub-scenarios are feasible, and could form part of several inter-related steps towards achieving the policy objective of more effective mitigation and remediation of space debris in the new EUSP in the MFF 2021-2027.

However, the costs and benefits would depend on which sub-scenarios are implemented (preferably, to be effective, all three would be implemented in parallel). The findings on costs and benefits are presented further below.

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There would be environmental benefits of taking action to address the problem of space debris, as well as strategic benefits in terms of fostering the competitiveness of the European space industry, by encouraging the development of new commercial services provided by industry relating to ADR removal.

Scenario 2 - Award criterion for rewarding minor innovations by companies to foster incremental innovation. This scenario was also identified as being feasible. It foresees the inclusion of the possibility in at least some future procurements through the EUSP of an optional award criterion that assigns a small number of points (5-10%) to prospective contractors to propose small improvements to existing products, services, processes or methods. Whilst the incorporation of such innovations would not change the fundamental characteristics of the upstream infrastructures being procured, this could be regarded as more cost-effective or efficient from a production, operational or organisational point of view. A similar criterion is already being used by NASA in some contracts to encourage the US space industry to make proposals that achieve the outcomes expected through contract execution, but by using more cost-effective, efficient and innovative solutions.

Moreover, firms are already keen on proposing optional incremental innovations to the contracting authority in the context of the EUSP, even when this is no explicit requirement within the procurement to do so, or any relevant award criteria are included in the Tender Specifications. Minor additional innovations could be proposed, on top of the minimum requirements, so as to differentiate themselves from competitors. Such a criterion would give firms, both SMEs and prime contractors, an additional incentive and stimulus to be creative and flexible in the development of their technical offers and if successful and selected in a procurement procedure, during contract delivery. However, since there is a culture of risk aversion in the EUSP due to the reliance on high-performing and proven technologies, this could serve as a constraint to the adoption of innovation in some domains. Accordingly, the inclusion of an award criterion for minor innovation should be optional, and considered on a tender-by-tender basis, depending on the specific objectives of the procurement concerned.

The small number of award points that could be attributed to this criterion would allow the contracting authority to further discriminate among the proposals received, but still retain other technical criteria as the main determinant factor for the ultimate contract award decision. Of all the scenarios, this was identified as being the easiest to implement, at comparatively low cost, since it would be a question of capitalising on the existing cumulative know-how, experience and knowledge of SMEs and industry, and utilising this in a way that harnesses innovation, and leverages existing know-how within the firm.

Scenario 3 - Embedding innovation within the EUSP by strengthening attention to innovation through various pre-operational procurement mechanisms. This scenario was also found to be feasible. A number of alternative mechanisms were identified to ensure that innovation is fed into the EUSP, by ensuring that innovation is integrated more systematically within pre-operational programmes. Although innovation is one of the hallmarks of the upstream space sector, the three programmes within the EUSP (Galileo, EGNOS and Copernicus) are required to deliver operational services through infrastructure procured. Accordingly, as noted above (Scenario 2), there is a culture of risk-aversion, insofar as the satellites being procured necessarily depend on high-performing and reliable technologies, rather than cutting-edge technologies that remain (as yet) unproven and unqualified. This raises the question as to how in the early space engineering phases (Phases 0, A and B) feeding into the EUSP, steps can be taken to embed innovation more systematically at all Technology Readiness Levels (“TRL”) levels. However, existing mechanisms to ensure that innovation is embedded are already playing an important role, namely the ESA research programmes, and inputs by NSAs focused on more fundamental research, and contract R&D procured through H2020 Space. However, an issue has arisen as to whether there is a gap, since fundamental research carried out by ESA/ NSAs and contract research commissioned through H2020 Space tend to focus on TRLs 1-5, which may create gaps, especially at TRL levels 6, 7 and 8.

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Whilst the above-mentioned instruments already play a major role in fostering innovation, alternative mechanisms were identified that could potentially further enhance innovation, such as the use of a first contract approach, modelled on the NASA COTS programme1, which supports new market entrants and SMEs to gain a foothold in emerging sectors, or through a pre-commercial procurement mechanism focused on higher-stage TRLs. Either of these mechanisms (or both) could provide the ‘missing link’ between earlier-stage research at lower TRL levels and later-stage demonstration projects and pre-operational services. It remains to be studied whether such a first-contract approach should be implemented in Horizon Europe or through the EUSP itself.

Cost and benefits of the scenarios

Regarding Scenario 1, the benefits of effective techniques in space debris mitigation and remediation could be significant, since the most commercially and scientifically important orbital paths are dependent on avoiding such debris. Such a measure could therefore contribute towards strengthening the protection of Europe’s strategic space assets. This would in turn protect the benefits expected from investment in upstream space infrastructures by fostering the development of downstream services. There would moreover be benefits in terms of ensuring that space orbits remain safe for future generations, with attendant environmental benefits.

Regarding the costs, provided that industry has time to adapt satellite design sufficiently in advance, the costs of making new satellites removable would be negligible, due to the fact that a new standard has recently been developed by ESA. the likely delta recurrent cost to design satellites would be extremely limited, around a few thousand euro. These costs would be linked to have on board some additional elements, such as ensuring that there is a grabbling handle capability, visual aids to help navigation which will be recurrent standard pieces. Such technologies would however need to be qualified first, so there would be some R&D expenditure by ESA and by industry in the low millions of EUR.

The costs of ADR missions to remove existing space debris found that the development cost for mission owners would however be much higher, reflecting the fact that such missions would be world-firsts. These have been estimated in the order of €300-€500 million per mission, although it would be possible to eliminate multiple space debris targets within a single mission.

Turning to Scenario 2, the benefits linked to encouraging contractors to make minor innovations would materialise over time through incremental progress in respect of the characteristics of products and services and through organisational-based innovations. Such benefits may by definition be relatively low-key, but promote positive changes by embedding innovation within the EUSP over the medium-longer term, thereby strengthening efficiency and cost-effectiveness during contract delivery. The costs for the minor innovation scenario were found to be minimal, since firms would capitalise on their existing knowledge, and these would therefore largely be ‘business as usual’ costs.

In relation to Scenario 3, the benefits of introducing a first contract approach are that these could help to foster innovation and encourage new market entrants in new and emerging markets, such as the provision of debris removal, in-orbit and space transportation services. Similar programmes in the US suggest that such programmes can be launched for €50 - €500 million (the cost really depends on the level of ambition).

The overall benefits

Among the strategic benefits of going ahead with a societal criteria approach in the 2021-2027 period are: (1) enhancing the EUSP’s contribution to catalysing innovation, generating and harnessing knowledge, thereby strengthening the industrial competitiveness of the European upstream space

1 COTS nurtures industry in emerging areas, such as space transportation services and space debris and other areas where the private sector could play a greater role in future.

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sector (2) minimising the adverse environmental impacts, e.g. by reducing the risk of space debris creation and encouraging research into non-toxic materials used in satellites that do not burn up on re-entry, and (3) promoting high-quality employment.

The nature and magnitude of benefits was found to vary depending on the criteria concerned, and the specific scenarios under investigation. Examples of the benefits linked to each scenario were provided in Section 1.4.

The overall costs

Implementing a societal criteria approach would lead to administrative costs for both contracting authorities and industry. However, the research found that a significant proportion of total costs for primes would be Business as Usual (BaU costs). The extent and nature of these costs would differ markedly, depending on which specific societal criteria are used in the MFF 2021-2027, and whether such criteria are mandatory or voluntary.

For contracting authorities, the costs associated with implementing a societal criteria approach relate to the contractual management lifecycle, from planning procurements, through to the selection of a contractor, the negotiation process prior to a contract being signed, and monitoring activities during contract implementation. Monitoring activities to ensure that contractors are complying (and have complied upon contract completion) with any mandatory requirements, were viewed as being the costliest part of the process. Administrative burdens for contracting authorities would be spread across different roles, such as procurement specialists, legal staff, staff working on overseeing technical solutions, etc. Whilst the skill set of staff was seen as being technically capable of implementing a societal criteria approach for the environmental and innovation criteria, implementing social and employment criteria was viewed as requiring specialist external expertise.

It was difficult to quantify the costs of mandatory requirements for industry, since this study was exploratory. Therefore, until the precise configuration of scenarios was determined, the detailed costs could not be estimated. Nevertheless, some costs estimates are presented in the main report (e.g. sub-scenario 1.3 for ADR missions), but most costs estimates provide an indication of the order of magnitude of the costs. The nature and magnitude of costs were found to vary depending on the scenario concerned, and as to which private sector actors were involved in contractual delivery. Evidently, since primes play such an important role in upstream procurement, most costs would be incurred by large-scale industry, since they dominate the manufacturing of EO and navigational satellites. However, SMEs would also be impacted through their participation in the supply chain. They would be more affected by some scenarios (e.g. minor innovations) than others (e.g. space debris mitigation and remediation), where primes would be the principal actors affected.

Overall findings

A societal criteria approach is both legally and technically feasible. Industry should be forewarned about the refinement to the current approach to managing upstream procurement in the EUSP as soon as possible, in order to ensure that SMEs and primes have sufficient time to plan ahead and to incorporate societal considerations both in the design of new generations of satellites and other space infrastructure. There is a need for the Commission (and ESA where implementing EUSP procurements on a delegated basis) to communicate the evolution in the approach to procurement to all stakeholders.

Recommendations

The following recommendations were drawn from the research.

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Recommendation 1: A societal criteria approach should be implemented in the new MFF 2021-2027, provided its introduction is gradual. Whilst some societal criteria could be introduced on a mandatory basis in the new MFF, others could be made voluntary.

• Recommendation 1.1: Contracting authorities should be allowed sufficient time to familiarise with the new requirements, and to gain experience of the implementation of a societal criteria approach. Experience needs to be built throughout the contractual management lifecycle, from the design and planning of specific procurements, through contract award to monitoring compliance with societal criteria included as mandatory requirements during contract implementation.

• Recommendation 1.2: When determining whether to integrate societal criteria in particular procurements, contracting authorities should check that any requirements demonstrate a clear ‘link to the subject matter’ of the contract (as per Art. 67(3) of Directive 2014/24/EU). In addition, a simple proportionality test could be applied to check that the requirements are appropriate, and can be legally justified.

• Recommendation 1.3: ESA could support the EC in implementing one (or more) mandatory societal criteria in procurements carried out in 2021-2027. This would make sense given ESA’s extensive expertise in managing procurement in the EUSP on behalf of the EC through delegated acts. ESA moreover has strong experience in working on space debris mitigation, and in planning for future debris removal missions using ADRs. The EC would keep the overall coordination and leadership of the initiative, as the main funder of the EUSP.

• Recommendation 1.4: The European Space Industry likewise will need adequate time to adapt to, and plan for meeting proposed new mandatory requirements. There are long lead times in satellite design, so industry will need considerable forewarning before procurements which take place in 2021-2027 are be able to respond to the challenge of integrating consideration of societal criteria into their technical offers, especially for mandatory criteria.

• Recommendation 1.5: Any societal requirements need to be clearly described in Tender Specifications. Contractors will need to understand what is required to be implemented on a mandatory basis, and by when during the contract, including the obligations relating to the provision of any associated monitoring data and information they need to collect so as to demonstrate compliance to the responsible contracting authority.

Recommendation 2: A holistic approach should be implemented to societal criteria that draws on available mechanisms and instruments, including those outside the EUSP through precursor procurement, which feeds into the EUSP (e.g. direct contract R&D, or PCP). A first contract approach could be implemented either through the EUSP or through Horizon Europe.

The impact of a societal criteria approach could be maximised by using parallel mechanisms and instruments that could contribute to achieving societal objectives, and to maximising the socio-economic impacts of the EUSP. Some existing and potential new supplementary instruments fall outside the scope of “traditional” procurement tendered through the EUSP (e.g. H2020 Space, PCP), but have an important role in stimulating early-stage and later-stage innovations to tackle environmental challenges, ensure that state of the art is infused from an early stage of the design process for new generations of satellites, etc. In addition, a first contract approach could be piloted and rolled out in 2021-2027, although further research would be needed to determine whether such an approach should be implemented through the core EUSP or through Horizon Europe.

Recommendation 3: Since funding is concentrated within upstream space investment in the space segment, the adoption and implementation of a societal criteria approach in the new MFF is the area with the greatest potential benefits.

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• Recommendation 3.1: However, in the ground segment, there is greater scope to integrate societal criteria, given that such procurement is less highly customised than the upstream space segment. There is therefore greater possibility to use standardisation processes as a driver of improved environmental standards. Consideration could be given to procuring ground support services using a societal criteria approach. Other areas within the space value chain may also be promising (e.g. the Green Public Procurement (GPP) approach to assessing the environmental capabilities of products developed by the JRC-DG ENV could be extended to space-derived products and services to ensure that environmental considerations are considered in product design from the outset.

Recommendation 4: The European Commission could award upstream space procurement contracts using at least one environmental-related societal criterion as a mandatory requirement.

• Recommendation 4.1: It could be made mandatory for contractors to comply with ESA’s Space Debris Mitigation (SDM) guidelines to reduce the chance of additional debris being created in future. It will be necessary to build on work by ESA to foster the development of effective space debris mitigation using Design for Demise (D4D)2 principles. It is important that the EU, ESA and industry work together to strengthen the effectiveness of existing approaches, and to ensure that these are consistent.

• Recommendation 4.2: Industry could in parallel be strongly encouraged to invest in improving technologies relating to end-of-life satellite removal. This would make it easier for mission owners to better manage and mitigate risks once satellites commissioned through the EUSP have come to the end of their operational lifetime.

• Recommendation 4.3: A mandatory requirement for contractors to provide a Life-cycle Assessment (LCA) in their proposal could be considered. This has already been implemented by ESA and could contribute to space debris mitigation and raise awareness among industry minds about the costs of possible future remediation if end-of-lifecycle planning fails or is judged insufficient. Whilst LCA methodologies relate to the assessment of a wide range of environmental impacts, an LCA-type approach focused on space debris mitigation and on contingency planning could be useful. LCA should linked to actual objectives of the tender, and not a pure reporting exercise.

• Recommendation 4.4: Consideration could be given in the new MFF to ensuring that mission owners and contractors take responsibility for space debris mitigation and remediation through an approach based on shared risks and rewards. Budget could be set aside, and effective remediation measures put in place, to address any new space debris created. This could be achieved by setting aside a contingency budget to pay for remediation space missions, or if ADR technologies take a longer period to move beyond the demonstration phase, then the contingency budget could instead be invested in R&D&I into such technologies to accelerate the deployment of space missions to remove debris and the development of technologies to provide ADR removal services in future.

Recommendation 5: A non-mandatory criterion to promote innovation could be included relating to the capacity of contractors to demonstrate incremental innovation during contract execution. Awarding contractors an additional 5-10% in award points for delivering contracts that incorporate minor innovations, for example, through technological innovations, but also through project-based, process and organisational innovations, would be an effective means of incentivising contractors to deliver better value for money by applying the lessons learned from previous contracts as to how knowledge generated and innovations developed by firms could be deployed during contract delivery.

2https://www.esa.int/Our_Activities/Space_Engineering_Technology/CDF/Design_For_Demise_A_First_Look

https://www.esa.int/Our_Activities/Space_Engineering_Technology/CDF/Design_For_Demise_A_First_Look

Executive summary

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Recommendation 6: Funding for larger-scale demonstration projects could be increased to enable the accelerated development and testing of new innovations and technologies which could be infused more rapidly into the EUSP. Given the risk-averse nature of the EUSP, there is a need to bridge the gap between early-stage contract R&D procured currently, and bringing such technologies through the qualification stage until these are sufficiently proven up to be deployed in upstream space infrastructure contracts. Alternatively, this could be achieved through the implementation of a first contract approach funded either through the EUSP or Horizon Europe, or through a PCP scheme3 funded outside the EUSP.

Recommendation 7: Political encouragement could be given by the European Commission ahead of planning the detailed implementation of the EUSP in the new MFF 2021-2027. Given the scale of investment, for accountability purposes, there is a need to ensure that the effects of such investment are more adequately measured and the qualitative benefits demonstrated.

Since the draft programme regulation has already been adopted, it may not be possible to reference societal requirements explicitly. Nevertheless, given the need for industry to have sufficient time to prepare for the introduction of some mandatory and voluntary societal criteria in 2021-2027, drawing attention to the potential benefits of a societal approach could have an important signalling effect and raise awareness in the European space industry that greater attention is needed to societal criteria.

• Recommendation 7.1: The EC should carry out further dissemination activities to inform industry about the importance of adopting solutions and approaches that contribute to societal impacts.

• Recommendation 7.2: During the next MFF, the efforts made to integrating societal considerations into the design and implementation of the EUSP through a societal criteria approach should be communicated effectively to all stakeholders, including EU citizens. Information and any data about progress made in reducing the environmental footprint of the EUSP, and in strengthening the programme’s contribution to enhancing innovation, promoting knowledge spillovers and creating high-quality employment in Europe should be communicated.

3 The PCP is not subject to the EU Financial Regulation or Public Procurement Directive, and could serve as a mechanism for

proving up and accelerating the rolling out and possible commercialisation of particular technologies.

1. Introduction

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1. Introduction

This document contains the final report for the “Study on Societal Criteria in Upstream Space Infrastructure Procurement” undertaken for the European Commission’s DG Grow (Unit I.3 - Space Data for Societal Challenges and Growth).

1.1 Study objectives and background

The overall study objectives were to investigate the feasibility and appropriateness of including societal criteria in the procurement activities of the European Union (“EU”) Space Programme (EUSP), i.e. the Galileo and EGNOS satellite navigation programmes and the Copernicus Earth Observation Programme. These programmes are being implemented by the European Commission’s DG GROW and the European Space Agency (“ESA”), which is involved in implementing some aspects of the EUSP on a delegated basis.

The specific objectives were to:

1. Investigate the legal feasibility of including societal criteria in the procurement of infrastructures (satellites, launch services) for the EUSP.

2. Having established the legal feasibility, consider the practical feasibility of introducing societal criteria (environmental, innovation and/ or employment-related), including estimate the costs, benefits and impacts of different societal criteria, were these to be included in space-related procurement:

• Impacts on innovation and knowledge-related impacts – consider ways in which innovation could be promoted on an accelerated basis, such as accelerating the lead time for the development of new, more environmentally-friendly technologies to be qualified and sufficiently proven to be used in the EUSP. Consideration of knowledge-related impacts, including technology transfer and knowledge spillovers.

• Environmental impacts – ways in which the environmental impacts of the EUSP might be minimised (e.g. reduction in space debris/ promotion of clean space agenda, reduction in toxicity in propellants) and the positive downstream benefits maximised;

• Impacts on employment and wider societal benefits – examine how the potential benefits of upstream space infrastructure investment on job creation in Europe, especially high-quality jobs and jobs in research and development might be enhanced.

3. Draw conclusions regarding which societal criteria should be included in future space procurement and analyse which criteria should be adopted, and assess whether this should be on a mandatory or voluntary basis (or a combination of mandatory and voluntary criteria).

The adoption of the revised EU Public Procurement Directive4 in 2014 reinforced the possibility of integrating societal criteria in public procurement contests. There was however also such a possibility, even before the new Directive was adopted (which was confirmed by case law). The inclusion of such criteria is not required in the Directive, but the possibility for contracting authorities of doing so is explicitly mentioned for the first time. Taking up the possibility of integrating societal criteria – either on a mandatory or voluntary basis or a combination of the two - is the focus of this exploratory study. The inclusion of such criteria would be in addition to the continuing inclusion of "traditional" award criteria used in procurement contests, namely the quality, technical merit, aesthetic and functional characteristics, etc. of the technical solutions put forward by prospective contractors in response to

4 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement

1. Introduction

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exacting technical specifications, and considerations relating to the ratio between quality and cost. It would need to be complementary to existing criteria rather than replacing these.

The introduction of such criteria could help to maximise the positive socio-economic impacts of the EUSP and to minimise and mitigate the negative impacts, insofar as possible, by giving adequate consideration to issues such as innovation, the environment and/ or employment throughout the procurement process, from the procurement design phase onwards, including the procurement procedure itself, during the negotiation process with prospective contractors, and in the implementation of upstream space infrastructure contracts.

The study requires an assessment as to which procurement activities would be best suited to the inclusion of societal criteria. The Tender Specifications also make clear that the advantages, limitations and risks involved in using different approaches to the inclusion of such criteria in space procurement should be explained, along with an overview of the robustness of information and data (including any limitations).

1.2 Study scope

The study scope focuses on the possible inclusion of societal aspects in upstream space infrastructure procurement. The EUSP within scope are Copernicus, Galileo and EGNOS (the European Geostationary Navigation Overlay Service). The focus was on the procurement of space hardware, such as satellites used for Galileo and Copernicus5, space launch services used to launch satellites procured and on services provided through the ground segment.

The concept of sustainable procurement allows contracting authorities to procure goods, services and works with a reduced environmental and social impact throughout their lifecycle. The concept of “societal criteria”, as outlined in the Tender Specifications, was broad. During discussions with the client and with key stakeholders, especially contracting authorities dealing with upstream space procurement for the EUSP, the number and type of criteria has been narrowed down6 in order to focus on those criteria considered more realistic.

Examples of the types of issues that could be probed in relation to some of these different aspects of societal criteria in space procurement are now provided:

• Innovation-related criteria. How far do the EUSP promote innovation, knowledge transfer and knowledge spillovers? Could more be done to enhance this at procurement stage?

• Environmental and “green” criteria. How could the environmental footprint of space procurement be reduced? Examples are ensuring there is a commitment by contractors to minimise the risk of space debris, and if such debris occurs, requiring them to remove the debris, the possible mandatory introduction of a life-cycle assessment approach to assess the future costs of end-of life cycle considerations (decommissioning satellites, deorbiting procedures), and possible measures to reduce the toxicity of upstream space activities by designing alternative propellants and to reduce climate change impacts through more fuel-efficient launcher services.

• Employment criteria – how far can space procurement contribute to generating new employment? To what extent is such employment likely to be generated in the EU or in third countries? What type of employment is likely to be generated and how could this be

5 Copernicus currently has 7 satellites 6 Fiscal and economic criteria were eliminated from scope, since these relate more to the economic impacts of upstream space procurement, which can be better assessed through socio-economic impact studies, including giving consideration to the economic inter-linkages between upstream and downstream space procurement. Financial criteria have been re-termed the “Costs and benefits of societal criteria in space procurement”.

1. Introduction

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maximised through requirements linked to procurement (e.g. mainly high-skilled and skilled, but some low-skilled jobs through direct and indirect spillover effects in wider local and regional economies)?

1.3 Methodology and desk and field research undertaken

An overview of the methodology adopted to carrying out the assignment is provided in the following Figure.

Case Study 1-1 - Methodology overview

The study team undertook a combination of desk and field research in Phase 2. A short overview of the work carried out is now provided. Regarding desk research, a large number of documents have been reviewed, as summarised in the bibliography in Annex 3. A number of good practice guidance manuals on the inclusion of societal criteria in public procurement were identified and reviewed. Whilst these were useful in shedding light on general issues, the guidance was often too general and non-space specific. To facilitate assessment of the scenarios, desk research relating to each scenario was carried out.

An interview programme was undertaken with key stakeholders. An overview of the interviews carried out is provided in the following table:

Table 1.1 – Interview programme

Stakeholder category No. of interviews undertaken

European Space Agency (ESA) 5

European Commission officials directly involved in EUSP 7

National Space Agencies 4

1. Introduction

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Stakeholder category No. of interviews undertaken

National public administrations and agencies purchasing space-related services and technologies

1

Organisations that have previously used societal criteria in public procurement and experts in their usage

1

Space industry – prime contractors/ large enterprises 19

Space industry – SMEs (often subcontractors/ suppliers) 8

EU and national space associations and space SME associations 9

International space-related bodies (e.g. NASA, United Nations Office for Outer Space Affairs (UNOOSA)

1

Legal experts in the space sector and in respect of public procurement rules 2

Total 56

A number of different categories of stakeholder were interviewed, notably representatives from the EU institutions, ESA, national space agencies (NSA), space industry associations, SMEs and other science or research-based organisations. In total, 56 interviews were carried out across 38 different stakeholder organisations. A list of the organisations interviewed is provided in Annex 1. Under the GDPR, individual names cannot be mentioned.

1.4 Report structure

The report is structured as follows:

• Executive summary: summarises the overall findings from the study. The study’s conclusions and recommendations have been incorporated in this section (at the client’s request).

• Section 1 – Introduction: presents the study objectives, scope and methodology;

• Section 2 – High-level analysis of the feasibility and appropriateness of societal criteria: analyses the study questions that have been assessed, and presents the main findings, drawing on the review of key documentation and interview feedback. Case studies pertaining to the space and non-space sectors are also included to help assess feasibility;

• Section 3 – Scenario analysis. Examines three scenarios that could be implemented under a societal criteria approach. Also presents an assessment of the costs and benefits and possible impacts of the possible inclusion of societal criteria in future for these scenarios.

The annexes contain supporting information. Annex 1 provides an options analysis, setting out different possibilities vis-à-vis the integration of societal criteria in the new MFF 2021-2027. In particular, consideration is given to defining an analytical framework for considering the best way forward from an EU policy maker perspective, including maintaining the status quo, the possibility of adopting mandatory criteria, voluntary criteria and/ or a combination of the two. This was an essential starting point to identify the scenarios considered in Section 3.

Annex 2 sets out the bibliography, whilst Annex 3 provides a list of organisations that were interviewed (anonymising the interviewees). Since the space debris mitigation scenario was especially complex, Annex 4 provides detailed supporting information in respect of the problem definition. Lastly, although ecodesign was not selected as a scenario, some research was undertaken on this aspect, and Annex 5 therefore contains a summary of progress made to date in the integration of ecodesign principles into the EUSP.

2. High-level analysis of the feasibility and appropriateness of societal criteria

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2.1 Introduction

In this section, the feasibility and appropriateness of including societal criteria in upstream space procurement within the EUSP is provided. This builds on information drawn through the desk research, further validated and enriched with the stakeholders’ opinion collected through the interview programme. This Chapter is structured as follows:

• Section 2.2 provides a summary of the benefits of a societal criteria approach;

• Section 2.3 presents the findings from the legal feasibility analysis;

• Section 2.4 discusses the main issues related to the inclusion of societal criteria in space procurement, distinguishing between environmental, innovation and knowledge creation, and employment criteria;

• Section 2.5 summarises the main benefits and costs related to the inclusion of societal criteria, emphasising the trade-offs in place, as well as any challenges and barriers.

2.2 High-level summary of benefits

Before outlining whether a societal criteria approach is legally and practically feasible, it is worth highlighting some examples of the benefits of a societal criteria approach. Reference should then be made to Section 2.5, which analyses these benefits in further detail, taking into account the costs.

Criterion Examples of benefits

Innovation • Stimulate the accelerated development lead times for the infusion of new state of the art technologies and innovations into the design and manufacturing of upstream space infrastructures;

• Ensure that there are appropriate pathways to prove up new technologies, innovations and prototypes developed, enabling them to be embedded in the EUSP.

• Embrace the potential of new technologies to contribute to environmental objectives, such as reducing the toxicity of launchers through the use of green propellants, strengthening space debris mitigation and remediation.

Environmental • Mitigate the risk of new space debris formation and putting in place medium-longer term investments in R&D&I to ensure more effective remediation strategies;

• Foster industrial competitiveness by requiring compliance with requirements having an environmental dimension (e.g. space debris mitigation) that could stimulate the competitiveness of European firms compliant with the legislation.

• Reduce toxicity from infrastructure procured (ranging from the propellants used in launcher services to the materials used in space manufacturing), although there is a long timeframe required to identify and reduce the costs of substitutes.

• Reduce carbon emissions through the implementation of an LCA and/ or ecodesign approach to designing future generations of satellites.

Employment and SMEs

• Better capturing the contribution made by the EUSP to employment creation in Europe, especially the number of high-quality jobs in R&D&I;

• Increase competition in the market in sub-sectors that have previously been restricted largely to a small number of primes (e.g. for instance, by encouraging SMEs to compete based on their ability to demonstrate minor innovations.


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Criterion Examples of benefits

• Promote greater SME participation by setting mandatory requirements across the EUSP in respect of the minimum contracting thresholds that are required to be subcontracted to SMEs.

Strategic and policy benefits

• Contribute to the objectives of the EUSP and the 2016 Space Strategy for Europe.

▪ Ensure a globally competitive and innovative European space sector;

▪ Reinforce Europe's autonomy in accessing space in a safe and secure environment; and

▪ Strengthen Europe’s role as a global actor and promoting international cooperation.

• Contribute to achievement of objectives in European Space Industrial Programme.

• Strengthen risk and reputation management - reduce the scope for external criticism of the EUSP in the 2021-2027 MFF e.g. in relation to environmental issues, such as the toxicity of materials and propellants.

2.3 Analysis of Legal Feasibility

A legal analysis to assess the feasibility of the inclusion of societal criteria in upstream space procurement in the new MFF 2021-2027 was undertaken. The assessment was carried out combining information drawn from official documents with that collected during the interviews with contracting authorities at the European Commission and ESA. It should be mentioned upfront that the EU retains responsibility in the EUSP for overall coordination and policy leadership as the main funder of upstream space procurement taking place within the Copernicus, Galileo and EGNOS programmes.

An overview of the baseline situation setting out the prevailing EU legal framework in which procurement relating to the EUSP takes place is first provided (Section 2.2.1). This summarises the applicable procurement rules, which vary depending on which space programme within the EUSP is concerned, and which segment (e.g. space segment, ground segment) and whether the EC manages particular procurements or ESA does so on a delegated basis. The findings of the legal feasibility of introducing societal criteria in public procurement are then summarised (Section 2.2.2).

2.3.1 Summary of the Procurement Rules applicable to the European Space Programme

Firstly, the EU Financial Regulation7 and revised 2014 EU Public Procurement Directive (Directive 2014/24/EU) provide the overall legal framework in which most upstream space procurement funded through the EUSP take place. The Directive is addressed to public authorities in the Member States (MS). However, the Commission services also follow the Directive’s general provisions. There are parts of the Directive that MS are required to apply, whereas other aspects are optional, such as the scope to use societal criteria during procurement contests.

Secondly, applicable the procurement rules in the EUSP differ depending on which contracting authority – the European Commission or ESA – is managing particular procurements in the EUSP, and which rules the contracting authority concerned decides to use. Indeed, there is some flexibility as to whether the EU procurement rules or the ESA rules (excluding the geo-return and the ESA industrial policy) are utilised. A distinction should be made between different types of procurements being managed within the EUSP. In summary:

• Galileo is managed directly by the Commission services within DG GROW, but with support from ESA for some aspects.

7 The current versions of the Financial Regulation and the Rules of Application apply from 1 January 2016, although a proposal was made for a new EU Financial Regulation in September 2016 (Proposal for a Regulation of the European Parliament and of the Council (14 September 2016) - COM(2016) 605 final)


7

• For some procurements carried out under the EUSP, such as satellites and launcher services, ESA acts on a delegated basis on behalf of the Union. In such instances, the EU Financial Regulation and the general principles set out in the Public Procurement Directive from 2014 are applicable.

• Most of the Copernicus programme, EGNOS and the ground segment of Galileo are being implemented under delegated management using ESA rules, but with two ESA rules excluded (the geo-return and ESA industrial policy).

• However, in the case of other procurement (e.g. direct contract R&D procurement undertaken under Horizon 2020 and the Galileo ground segment), ESA uses their own procurement rules. However, whilst there are differences in the procurement rules, many of the fundamental principles set out in EU procurement law are embedded within the ESA rules, with shared characteristics in terms of the common basic principles such as equal treatment and fairness.

• Whilst there is no explicit provision for the inclusion of societal criteria in the ESA rules, that environmental considerations have already been included in ESA’s own procurements (for instance, in relation to the use of lifecycle assessment, requiring compliance with the space debris mitigation guidelines etc.). This suggests that there is nothing prohibiting the use of such criteria for procurements using the ESA rules.

There is in-built flexibility within the procurement system for managing the EUSP. For instance, whilst Copernicus is largely managed on a delegated basis by ESA on behalf of the EC, the Commission services may decide to manage particular procurements themselves. This maximises the scope for flexibility. However, in practice, the EC only tends to manage smaller-scale procurements under Copernicus, and not the procurement of sentinels, since the EC’s Copernicus Unit has only about 20 staff, which would be insufficient compared with ESA’s staff complement.

Thirdly, it should be noted that WTO rules apply to all EU procurement. However, certain Galileo activities, fall under Article 3 of the Government Procurement Agreement (GPA) of the WTO, and are therefore granted an exemption from normal open procurement due to security sensitivities. The procurement of upstream space infrastructure to support the development of European navigational services is therefore restricted to European economic operators.

Fourthly, under EU public procurement law, Member States are obliged to ensure the observance of existing social, employment and environmental requirements in Union law, national law, collective agreements and in international conventions by economic operators in the performance of public contracts. Therefore, although Directive 2014/24/EC states that contracting authorities shall base the award of public contracts on ‘the most economically advantageous tender, this may include ‘the best price-quality ratio’ assessed on the basis of criteria, including qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question. This provides scope for the procuring authorities to include not only relevant societal criteria relating to social, environmental and innovative characteristics in the Technical Specifications, award criteria and contract performance clauses but also to check that the staff delivering the works, supplies or services have the right qualifications, experience and organisational arrangements to deliver these aspects of the contract.

2.3.2 Key issues – legal feasibility

The main findings from the legal assessment were, in summary, that:

• The inclusion of societal criteria is legally feasible, irrespective as to whether a particular procurement is being implemented under EU procurement rules or the ESA rules.

• In addition to the incorporation of societal elements into the award criteria, there are a number of different means by which it is possible to integrate societal considerations into public procurement in the existing legal framework: i) The choice of procedure, ii) Selection criteria, iii) Contract performance conditions, and iv) the use of governance and enforcement provisions.

• However, there are some legal limits as to how far a societal criteria approach to upstream space


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public procurement can be adopted. This is due to the legal requirement within the scope of Directive 2014/24/EU to ensure a ‘link to the subject matter’ (LtSM) of the contract.

• The inclusion of societal requirements necessarily has to be justified and explicitly linked to the subject matter of the tender. However, this does create some need for interpretation, since it is not entirely clear how far contractual objectives might be tied in with any associated higher-level EU policy objectives (e.g. linked to the EUSP) or regulatory requirements (e.g. linked to the REACH Regulation.

The rationale underpinning these findings is now explored in further detail, along with other key legal issues identified through the research:

As noted above, not all upstream space infrastructure procurement takes place through the EU’s procurement rules, since some procurements are carried out using the ESA rules. The EU Financial Regulation provides the overarching legal framework for many upstream space procurements, and allows for the inclusion of societal criteria in public procurement. Public Procurement Directive 2014/24/EU makes explicit reference as to the scope to include such criteria. There does not however appear to be any impediment to including societal criteria under the ESA rules either, given that there are broad commonalities8 with the general principles relating to public procurement set out in the EU’s procurement rules.

Some procurements carried out under the ESA rules are implemented under delegated management. In such instances, ESA carries out procurement on behalf of the Commission, and is therefore required to adhere to the rules outlined in the EU Financial Regulation.

An analysis was also undertaken of the requirement in the legislation to ensure that there is a ‘link to the subject matter’ (LtSM) of the contract. Art 67 of Directive 2014/24/EU sets out the rules applicable in the selection and application of award criteria. A definition is provided in Art. 67(3) that award criteria shall be considered to be linked to the subject-matter of the public contract where they relate to the works, supplies or services to be provided under that contract in any respect and at any stage of their lifecycle.

This means that contracting authorities cannot link all sorts of social and environmental requirements to a contract without having a clear rationale, since such requirements must be clearly linked to the contract itself. LtSM was “intended as a limiting principle, intended to restrict the ability of contracting authorities to apply general corporate sustainability requirements or preferences in their procurement”9. The author notes that whilst the legal framework has been made more explicit that sustainable procurement and societal criteria in procurement are possible, the “scope for pursuing indirect environmental or social benefits via the award of public contracts appears to have been curtailed under the 2014 directives by the expansion of the link to the subject-matter requirement, although significant room for interpretation remains within the legislative text".

This strengthens the necessity for contracting authorities to tie in any societal criteria considerations to the specific contractual objectives, and particular technical solutions required in respect of the upstream infrastructure concerned. Arguably, of the three societal criteria under review, contracting authorities could justify the inclusion of certain environmental and innovation-related considerations into the Technical Specifications and technical solutions requirements compared with employment-related issues, since these could be directly linked to the contractual objectives relating to the next generation of EO and navigational satellites, for instance, by ensuring that these deliver high levels of

8 Art. 10 of ESA’s Procurement Regulations sets out the principles of the ESA. These are that a) transparency and fair and equitable treatment of all economic operators, b) that the participation of a Tendering Body does not cause any distortion of competition in relation to private economic operators and c) the most economic and effective employment of the Agency's resources. Point (d) relating to the ESA industrial policy is not applicable. 9 The Link to the Subject-Matter: A Glass Ceiling for Sustainable Public Contracts? Abby Semple, LL.B. (Dub), Public Procurement Analysis/ Birkbeck, University of London (Department of Politics)


9

technical performance and operational reliability, whilst fully respecting all relevant EU environmental legislation.

An example of a societal criterion that might be justified on the grounds of ensuring the need to meet EU regulatory requirements is the REACH Regulation. If it became known to the contracting authorities, for instance, that the manufacturing of hydrazine (a substance used in propellants for launchers, but also as a fuel for satellites once launched) which is highly toxic) was going to be prohibited or authorised (meaning highly restricted), given that say each EO satellite within Copernicus procured is meant to be in orbit for 7.5 years, requiring contractors to consider the use of alternative propellant technologies and substitute chemicals might be justified.

Moreover, Recital 97 of the Directive excludes criteria and conditions relating to general corporate policy, which cannot be considered as a factor characterising the specific process of production or provision of the purchased works, supplies or services. An example given is that “Contracting authorities should hence not be allowed to require tenderers to have a certain corporate social or environmental responsibility policy in place”. It is therefore clear that societal criteria cannot constitute a ‘wish-list’ of policies that the contracting authority would like the contractor to adhere to, but must be linked to the technical requirements necessary to meet the specific contract’s needs.

Some legal ambiguities may arise, for instance, regarding the extent to which an individual procurement can set criteria that relate not only to the technical requirements and performance characteristics required (e.g. of a satellite) but to the strategic objectives relating to the EUSP overall. An example might be the importance of contractors ensuring ease of end-of-satellite removal for mission owners, so as to avoid creating space debris, which could jeopardise Europe’s independent access to space.

For risk management purposes, including the need to minimise the risk of litigation, contracting authorities would therefore need to review potential mandatory societal criteria to be included in a specific procurement, and ensure that any requirements introduced can be legally justified and relate to the contractor delivering technical solutions necessary to ensure effective contract delivery.

An area where it appears to be clear that action could be taken is to integrate environmental sustainability criteria as part of a lifecycle assessment approach. This implies that action could be taken, for example, to ensure effective planning for end-of-life satellite disposal and removal, through initial graveyarding and subsequent deorbiting. This would fully relate to the objectives of the contract, given the imperative of ensuring continuity in operational services between successive generations of EO and navigational satellites procured for the EUSP.

Regarding the question as to whether there are any legal limits in the use of such criteria, since a societal criteria approach has not previously been formally adopted in the space sector. There is not therefore any relevant case law available, at least according to the desk research and to the best of the study team’s knowledge. The revised Directive 2014/24/EC only came into effect from April 2016, and there is therefore only a selected amount of case law relating to the use of societal criteria and / or sustainable public procurement (SPP). The interpretation of what ‘link to the subject-matter’ and societal criteria in public procurement actually means in practice and where the limits lie is however the subject of interest from the legal academic community10.

Clearly, any legal requirements pertaining to societal criteria would therefore need to be determined and carefully reviewed by the contracting authority prior to being finalised on a case by case basis.

The extent to which – if at all - there are any concrete provisions in the ESA rules which refer to environmental, social and innovation related considerations, was analysed. Accordingly, the ESA

10 The ‘link to the subject-matter’ and sustainable procurement, European Law Conference 2014, University of Oslo, Abby Semple, LL.B


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Procurement Regulations and their annexes were scrutinised11, reflecting the fact mentioned earlier that many EUSP procurements are carried out using these rules as the legal basis for the procurement.

There are no explicit references in the ESA rules to societal criteria as a concept, this does not mean that such considerations cannot be made, or included as a mandatory requirement, if the particular technical solutions can be shown to be relevant to the contract or to ESA’s strategic objectives. For example:

• ESA has made compliance with the ESA Space Debris Mitigation guidelines mandatory in all ESA procurements.

• ESA has a procurement policy on fair access for SMEs – known as “the C1-C4 clauses”12, which are applied for certain types of procurement. The C1-C4 clauses as part of the structural measures within ESA’s SME initiative. The purpose is to guarantee fair access to its programmes for all categories of companies.

• Whereas the C1 & C3 Clauses relate to actions reserved for non-primes and SMEs, the C2 & C4 clauses concern open competition with the encouragement of subcontracting to non-primes and SMEs.

Further details regarding the ESA SME policy are summarised in the following table:

Table 2.1 - The C1-C4 clauses

The C1-C4 clauses Description of measure

C1 and C3 clauses - actions reserves for non-primes and SMEs

• The aim of these two clauses is to foster competitiveness of equipment suppliers and SMEs (for C1 Clause), and of SMEs and Research Institutes (for C3 Clause), in areas where the concerned organisations have recognised expertise and capabilities. See two rows below for detailed aims.

C1 - Activities in open competition, limited to non-primes.

• Objective: to favour the increased specialisation and competitiveness of suppliers.

• Description: This measure is applied to technology activities and studies aiming at developing equipment, components or instruments in areas where, both, non-prime companies (including SMEs), have recognised expertise and capabilities, and where favouring the supplier sector would result in a more efficient allocation of R&D funds, due to the inherent economies of scale that would be generated. This policy applies in particular to the development of standard satellite equipment.

C3: Activities limited to SMEs and R&D organisations, preferably in cooperation.

• Objective: to increase the efficiency and flexibility of the system by facilitating the access of interesting and innovative industrial & R&D partners, many of them from collateral industrial domains to space.

• Description: measure applied to technology activities where ESA strives for innovation and new ideas and concepts to be brought into space.

C2 & C4 clauses. Open competition with encouragement of subcontracting to

• These types of actions are open to all, but the main Contractors are requested (under C2 clause) to include adequate participation of non-primes and SMEs - or under C4 clause, uniquely SMEs - in their teams.

11 https://download.esa.int/docs/LEX-L/Contracts/ESA-REG-001,rev4.pdf 12https://www.esa.int/About_Us/Business_with_ESA/Small_and_Medium_Sized_Enterprises/Opportunities_for_SMEs/Procurement_policy_on_fair_access_for_SMEs_-_the_C1-C4_Clauses

https://download.esa.int/docs/LEX-L/Contracts/ESA-REG-001,rev4.pdf

https://www.esa.int/About_Us/Business_with_ESA/Small_and_Medium_Sized_Enterprises/Opportunities_for_SMEs/Procurement_policy_on_fair_access_for_SMEs_-_the_C1-C4_Clauses



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The C1-C4 clauses Description of measure

non-primes and SMEs.

• Offers must provide an analysis of the proposed participations. If no SMEs are included in the offer, the bidder must provide evidence of efforts made, and the reasons for lack of success in including SMEs.

• Procurements where the C2 and C4 clauses are used include those for innovative technology activities issued as open competitive tenders, where capabilities are available at Non-Primes and/or SMEs, and generally, which have a budget greater than or equal to €250 000 (some procurements of lesser value may also be subject to these clauses).

C2 - Activities in open competition, where a significant participation of non-primes (including SMEs) is requested.

• Objective - to encourage an enhanced industrial co-operation between primes and non-primes starting from the technology inception phase.

• Eligibility - activities are open to all potential bidders, major system integrators and non-primes. However, in case major system integrators bid, they are requested to include in their offers a relevant participation, in quality and quantity, of non-primes (including SMEs).

• Description - this policy is applied to technology activities and studies aiming at developing equipment, components or instruments in areas where favouring the equipment supplier sector is appropriate, but the major system integrators are in a competitive position in the commercial market.

C4 - Activities in open competition, subject to the SME subcontracting clause.

• Objective - to foster cooperation between primes and SMEs through requiring minimum subcontracting requirements.

• Description - The SME subcontracting clause encourages experienced European space companies bidding as Main Contractors for ESA technology procurements to include SMEs in their teams in order to build-up working relationships and give them the opportunity to bring new technological ideas.

• Since many SMEs are working in domains other than space which may have analogous usages between the space and non-space sectors, these can be efficient in providing specialised items and services and enhancing the cross-fertilisation in technologies between space and other domains. The SME subcontracting clause is applied to technology activities where innovation is needed and capabilities may exist in space and non-space SMEs. The objective is to favour innovation, permeability between space and other sectors and the introduction of new ideas & concepts through SMEs.

• Bidders are required to include in their offer an adequate participation (in terms of quantity and quality) of SMEs as subcontractor(s). Tenders should also provide an analysis of the potential advantages (e.g. long-term prospects for future work) of the proposed participation.

Source:https://www.esa.int/About_Us/Business_with_ESA/Small_and_Medium_Sized_Enterprises/Opportunities_for_SMEs/Procurement_policy_on_fair_access_for_SMEs_-_the_C1-C4_Clauses




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The purpose of presenting the previous table is to illustrate that both SMEs and innovation are considered within the ESA procurement rules, even if there is normal societal criteria approach.

In the ESA procurement rules, there are also one or two relevant references in the ESA rules. For example, in respect of innovation, Annex 2 of the ESA Procurement Regulations suggests that the Technical Proposal by contractors should include a section on "New technology items and other risk factors". The guidance then notes that this should include information about new or innovative technical solutions proposed and technology development (presumably during the lifetime of the satellite’s orbit). This tallies with the interview feedback received from several officials from ESA, which was that whilst there is no formal societal criteria approach,

The role of negotiation in arriving at optimal technical solutions to strengthen and embed innovation in the EUSP was highlighted in the interviews. The EC’s procurement rules allow for negotiation with prospective contractors during procurement procedures. The EU Financial Regulation allows for negotiated procedures, particularly in the case of the “design or innovative solutions” or “when the needs of the contracting authority cannot be met without the adaptation of a readily available solution”. The legal basis for doing so is the negotiated procedure13, and the competitive dialogue procedure, which is currently being used for Galileo transition satellites, where an iterative process is used as a mechanism for defining and fine-tuning the technical requirements in the Tender Specifications together with industry.

Holding such negotiations during a contracting procedure can be useful when industry involvement is needed to produce the technical input to define technical requirements for a given space infrastructure procurement. Negotiation was found to have played an important role in ensuring that the EUSP delivers innovative solutions, and keeps up with emerging technological developments. However, there are also barriers to the adoption of state-of-the-art technologies due to the reliance on proven technologies, which is necessary, since Galileo, EGNOS and Copernicus have to deliver operational navigational and EO data and services. This requires a certain risk-aversion in procurement due to the need to prioritise performance.

Several interviewees noted that within ESA, there is a strong culture of negotiating with contractors to ensure that optimal technical solutions are delivered, reflecting their extensive experience in managing the procurement of larger-scale EUSP funded upstream space infrastructures. However, the Commission services noted that they have the same degree of flexibility as ESA in using negotiation as a tool to stimulate innovation.

However, the negotiation process was found to be human resource-intensive. There could therefore be practical considerations as to who is best placed to implement societal criteria in upstream space procurements, given that the EC has limited human resources working in procurement presently compared with ESA. Entering into negotiations with contractors to ensure high levels of innovation is legally feasible, but resource-intensive.

The different legal regimes applicable across different programmes within the EUSP, and their impact in terms of the level and types of competition should be taken into account. Most Galileo procurement, and especially in the space segment, is only open to European economic operators. Therefore, in some procurement contests, there are only limited numbers of manufacturers eligible that would be able to meet the requirements. This has an impact in terms of the feasibility of encouraging prospective contractors to compete on the basis of societal criteria. Although the procurement of launcher services and Copernicus satellites are in principle open to contractors globally, in practice, there is a de facto buy European rule, because the ESA rules are being used for managing such procurements rather than the EU procurement rules.

Overall, the quality and reliability of technical solutions proposed remain the most important considerations from a contracting authority perspective in the procurement of upstream space 13 This can be launched with, or without prior publication of a contract notice.


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infrastructures. This suggests that other criteria, such as the ability to integrate minor innovations, should be allocated only a small number of award points. Moreover, any societal criteria must be justified on the basis that they are linked to the subject matter of the contract.

2.4 Analysis of Practical Feasibility

In this section, the findings regarding the feasibility of going ahead with the inclusion of societal criteria in upstream space infrastructure procurement are presented. The assessment draws on desk research and stakeholder feedback provided in the interview programme. In the previous section, it was established that the inclusion of societal criteria would be feasible from a legal point of view, therefore, this section focuses on the practical feasibility and appropriateness of three potential types of societal criteria i.e. environmental sustainability, innovation and knowledge creation, and employment respectively.

2.4.1 Feedback on environmental criteria

Different aspects of the environmental dimension in space procurement were taken into consideration, including the extent to which environmental issues are relevant in the EUSP.

Some interviewees among contracting authorities expressed scepticism whether it is realistic to include environmental criteria in upstream space procurement. An argument was made that since there are few such procurements commissioned annually14, it would be burdensome to implement societal criteria, since each procurement is driven by technical solutions requirements, and performance is the overriding factor that necessarily determines contract award decisions. Furthermore, it was suggested that the environmental footprint on earth of the upstream space industry is small compared with other terrestrial industries. Therefore, any adverse effects are greatly outweighed by the positive environmental benefits of EO and the downstream use of space-based data and services.

However, other stakeholders, including some contracting authorities took a different view and saw the environmental dimension as being increasingly important. For instance, the Clean Space team from ESA had a different view as to how far the upstream space industry has an environmental impact at all. In their view, “while space may be a low-volume industry when compared to terrestrial industries, space activities can have a wide reach: rocket launches, for example, are the only human activity that affects all segments of the atmosphere”15. Moreover, “scientists are currently attempting to quantify the climate impact of major rocket-engine emissions (carbon dioxide, water, black carbon and alumina particles discharged by solid rocket-booster motors) and the extent to which rocket launchers and re-entering space debris could affect Earth’s atmosphere, which is in fact still unknown”.16

The baseline situation was also mapped in terms of how far due attention has been given to environmental criteria in existing upstream space procurements. Environmental-related considerations have already been given some prominence by relevant stakeholders, including some contracting authorities. For instance, through the 2012 Clean Space Initiative, ESA made a political commitment to ensure that greater consideration is given to promoting the objective of clean space, which is imperative in order to achieve key strategic EU objectives, such as maintaining the EU's autonomous, reliable and cost-effective access to space. More specific environmental issues, such as strengthening space debris mitigation and remediation planning and the development of associated technologies are considered in Section 3.2 (Scenario 1).

14 The research found that 1-2 satellites are procured annually under Galileo, and a similar number of sentinels procured annually under Copernicus. 15 http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/The_Challenge 16 https://www.scientificamerican.com/article/how-much-air-pollution-is-produced-by-rockets/

http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/The_Challenge

https://www.scientificamerican.com/article/how-much-air-pollution-is-produced-by-rockets/


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NASA in the US provides an example as to how environmental requirements could be incorporated into the space procurement process, for instance, by asking suppliers to develop environmental impact mitigation plans and to take responsibility for the costs related to clean-up activities (see the box below for details).

Case Study 2-1 – Environmental requirements in NASA procurement

Description: Since the 1970s, the NASA Procurement Office has included some environmental criteria in the technical specifications of its procurement contracts. These are not necessarily defined as award criteria, but, depending on the objectives of the particular procurement, such criteria can be either made an exclusion criterion (implying mandatory compliance) or a selection criterion (voluntary approach), or they could be requirements imposing the provision of additional information upon contract signature.

Specific examples: For some contracts, the supplier company could be required to accompany its technical proposal with a plan describing the measures that will be undertaken to reduce the environmental impacts of business activities, for instance, in terms of recycling packaging or bio-based goods that will be used in relation to contract execution. The plan represents a commitment taken by the company, which has to be approved by NASA before the start of contractual operations. NASA has the power to negotiate with the company about the measures included in this plan. Moreover, some procurement contracts could include specific requirements related to the implementation of clean-up activities, including mitigation measures to be carried out by the supplier during or at the end of the contract execution. Including this requirement in the contractor’s technical specifications is feasible only for those contracts and activities where it is possible to attribute the contamination responsibility to the contractor, rather than to the government as the mission owner, or to other parties.

Replicability and transferability to the space sector: This case study provides examples of how environmental requirements, which go beyond the use of environmental certifications, could be incorporated into space procurement. Requiring suppliers to formulate an “environmental plan” or to take responsibility for any cleaning-up activities encourages energy saving and good environmental sustainability practices. Most companies operating in the EU space sector already have a corporate social responsibility strategy which devotes attention to reducing the environmental impacts of their business activities. Even so, requirements of these kinds are likely to increase the administrative costs and burdens for industry and the contracting authority, as they extend the need to check for compliance with environmental sustainability criteria to the duration of contract execution.

Source: Interviews

An example of the challenges in integrating new technologies into the EUSP when such technologies are nascent (and as yet, insufficiently proven and qualified) relates to the possible future use of greener propellants in rocket fuel. Several barriers were identified to the use of less toxic and non-toxic, greener monopropellants in future.

An example of the close linkages between innovation and environmental criteria is the potential adoption of greener propellants to reduce toxicity in the EUSP. This is illustrated in the following case study, which provides an example of the barriers to the adoption of new technologies within the EUSP.

Case Study 2-2 – Barriers to the inclusion of new technologies/ innovations: Green propellants

Objectives: The aim of developing green propellants is to reduce toxicity in the fuels used in launchers and in the fuels used to propel satellites once in orbit. Non-toxic, or green propellants, such as those using hydrogen peroxide propulsion technologies are a possible replacement for hydrazine-based propellants.

Description of research into, and benefits of green propellants: Greener propellants could be used to reduce toxicity. However, the technologies concerned are at a relatively early development stage, and cannot yet be used in operational programmes, such as Galileo and Copernicus.

Whilst such technologies are not proven as yet, there are however some industry-led initiatives among primes relating to making improvements to reduce the environmental impacts of space propulsion systems. For example, ArianeGroup, the main European supplier of space propulsion systems participates in a working


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group on the possible use of Hydrogen Peroxide (H2O2)17 as a monopropellant and in hybrid mode. In Poland, a research institute and company are undertaking research into the use of hydrogen peroxide propulsion technologies. In addition to reducing toxicity, the Working Group points out that "the benefits can be further enhanced with the implementation of modern state of art technologies, such as 3D printing, for the production of dedicated green propellant rocket engines and thrusters".

The key priorities are the replacement of the monopropellant hydrazine and to find an alternative to the more toxic MMH used in bipropellant systems. In order to be able to select the best technology, the following alternative propellants and their impact on the different propulsion systems are amongst those being evaluated: Ammonium Dinitramide (ADN) based propellants:

• Hydrogen Peroxide (H2O2) as a monopropellant and in hybrid mode.

• GOX / GH2 propellants produced via water electrolysis.

• Ionic liquids to replace hypergolic bipropellant's MON / MMH.

Furthermore, other technologies are being assessed too such as HAN-based propellants.

NASA is also funding research into green propellants18, but is using a technology demonstrator to accelerate the development of such technologies. The purpose is to develop green alternatives to conventional chemical propulsion systems for next-generation launch vehicles and spacecraft. The project seeks to improve overall propellant efficiency while reducing the handling concerns associated with the highly toxic fuel hydrazine. The Green Propellant Infusion Mission is scheduled to launch in 2018.

Challenges and barriers to introduction of green propellants: Whilst alternative technologies exist for greener propellants, it was slated that these are not yet sufficiently proven to be used in the EUSP, which requires proven technologies, since they are procuring the hardware necessary to provide operational services, with less scope for the introduction of highly-innovative technologies at an early stage in the development and testing process (for performance, reliability).

Procurement in the EUSP is necessarily risk-averse, since the contracting authorities responsible (e.g. DG GROW at the EC, and ESA acting on behalf of the EC), are procuring hardware to provide operational services upon which downstream product developers and service providers depend. Therefore, it can be difficult to accelerate the introduction of proven (or at least qualified) technologies.

Several interviewees pointed out that the EC and ESA procure launcher services through the EUSP, rather than purchase the launchers themselves. This may make it difficult to impose requirements for launcher services, although the use of greener propellants could be required for satellites. Accordingly, the degree to which contracting authorities could compel the service provider to use green propellants in their launchers was questioned. An interviewee from ESA suggested that they had made reference to encouraging the use of green propellants in procurement, provided this was not a mandatory criterion, since there is only limited competition in EO satellite manufacturing for Copernicus, and only one provider can presently offer such technological capabilities.

Compliance costs: There is a concern among the European space industry about the impact of a possible ban on the use of hydrazine monopropellant until adequate, cost-effective and proven substitutes are available. Presently, the industry uses about 20 tons of hydrazine annually, mostly for satellite propulsion. A representative from Airbus commented in a published interview in relation to the possible banning of hydrazine due to the REACH Regulation that “All current systems have been matured using hydrazine. With new propellants, we need to understand how it affects the spacecraft and propulsion system, and all the surfaces it comes into contact with. In a 10- to 20-year timeframe, the industry may be able to develop a new propellant that would be environmentally friendly, non-toxic, cheap and efficient"19.

An assessment by Airbus (same source) expects the European launcher and propulsion system manufacturers to incur losses of around €300 million a year if hydrazine is included into the REACH regulation. Space vehicle manufacturers could lose €200 million/ year. Launch service providers would be by €500 million worse off

17 http://www.space-propulsion.com/new-technologies/alternative-propellants.html 18 https://www.nasa.gov/mission_pages/tdm/green/index.html 19 https://spacenews.com/hydrazine-ban-could-cost-europes-space-industry-billions/

http://www.space-propulsion.com/new-technologies/alternative-propellants.html

https://www.nasa.gov/mission_pages/tdm/green/index.html

https://spacenews.com/hydrazine-ban-could-cost-europes-space-industry-billions/


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every year. The total loss to the European economy as estimated by the Airbus assessment would stand at around €2 billion annually once supply chain and multiplier effects have been factored in.

Overall findings: The extent to which the EUSP is able to foster innovation and incorporate new technologies without compromising on performance and reliability was questioned. A conundrum is how to ensure that new technologies introduced are sufficiently well-proven and qualified to be used in operational programmes. A further barrier to going ahead imminently is that the costs involved in using greener alternatives presently appear to be prohibitive. Nevertheless, research into green propellants should be continued.

There are however means of overcoming such difficulties such as using the results from basic research being undertaken by ESA and the NSAs, and undertaking research into such technologies through H2020 Space, which allows for the procurement of early-stage innovations. An alternative could be to set up a PCP pilot initiative modelled on the earlier examples provided by NASA specifically with the aim of accelerating the development and take-up of greener propellant technologies.

Source: CSES, desk research (see footnotes cited) and interviews with ESA and industry stakeholders. Weblink(s) for further information: https://www.nasa.gov/mission_pages/tdm/green/index.html

A further issue considered was the extent to which good practices in other sectors regarding the environmental dimension of procuring goods and services might be useful in developing the Commission’s thinking on the possible inclusion of such issues. The potential use of a Green Public Procurement (GPP) approach, which has already been adopted in specific product sectors, and of applying this in upstream space procurements was examined. The case study is focused on the GPP methodology to product testing developed jointly between the JRC and DG ENV.

Case Study 2-3 – Green Public Procurement (GPP)

Case title: Green Public Procurement – environmental criteria applied to product testing (the role of standardisation).

Implementer: European Commission - JRC and DG ENV

Weblink(s) for further information: http://ec.europa.eu/environment/gpp/eu_gpp_criteria_en.htm

Description: The concept of Green Public Procurement (GPP) is increasingly recognised as an important tool for achieving environmental policy goals. DG ENV and the JRC have jointly developed a methodology, Handbook on GPP (3rd edition)20 and product-specific guidance documents, with customised criteria for specific product groups where scope was identified for harmonisation. The methodology involved a number of sequential steps, namely: defining the technical specifications, specifying the materials and production methods, using GPP criteria and labels and verifying compliance with the technical specifications. Guidance is also provided in the handbook on i) applying environmental award criteria and ii) applying a life-cycle costing (LCC) approach.

Objectives: The GPP criteria were developed to facilitate the inclusion of green requirements in public tender documents by harmonising the environmental criteria to assess particular products. The GPP criteria adopted aim to achieve a good balance between environmental performance, cost considerations, market availability and ease of verification. The aim is to promote incremental improvements by manufacturers.

Example of how it works in practice. Whilst there are general guidelines on how to apply GPP, putting this into practice requires the development of tailored methodological guidelines for each specific product category. For example, a technical background report by the JRC was published in 2017 on applying the EU GPP criteria to the textiles sector21. The revision of the EU GPP criteria for textile products and services aims to help public authorities ensure that textiles products and services are procured in a way that delivers environmental improvements that contribute to EU policy objectives for energy, chemical management and resource efficiency, and to reduce lifecycle costs. In order to identify the areas where significant improvements could be made and to incorporate these into the development of criteria, an analysis was carried out of the environmental impacts of manufacturing and using textile products and providing textile services. The most commonly used procurement processes were also identified and are addressed in a

20 http://ec.europa.eu/environment/gpp/pdf/Buying-Green-Handbook-3rd-Edition.pdf 21 http://ec.europa.eu/environment/gpp/pdf/criteria/textiles_gpp_technical_report.pdf

https://www.nasa.gov/mission_pages/tdm/green/index.html

http://ec.europa.eu/environment/gpp/eu_gpp_criteria_en.htm

http://ec.europa.eu/environment/gpp/pdf/Buying-Green-Handbook-3rd-Edition.pdf

http://ec.europa.eu/environment/gpp/pdf/criteria/textiles_gpp_technical_report.pdf


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separate criteria document22. The criteria are split into selection criteria, technical specifications, award criteria and contract performance clauses. For each criteria area, two sets of criteria are presented:

• Core criteria to allow for the easy application of GPP, focusing on the key area(s) of environmental performance of a product and aimed at keeping administrative costs for companies to a minimum;

• Comprehensive criteria take into account aspects or higher levels of environmental performance, for use by authorities that want to go further in supporting environmental and innovation goals.

The GPP approach has also been implemented in other product group areas, such as computers and monitors, electrical and electronic equipment used in the health care sector, etc.

Outcomes to date: whilst some feedback has been received by the JRC that the GPP approach has been useful, no data is available on the extent of take-up by industry. Feedback received was that firms value the possibility of using particular labels, especially the EU ecolabel on their products.

Replicability and transferability: Whilst an interesting practice, some interviewees working on Galileo procurement suggested that there may be greater scope to utilise a GPP-type approach which implies investment in standardisation as a means of achieving environmental goals in the ground segment and in the procurement of downstream products and services. It was argued that upstream, the procurements are too infrequent and require the customisation of technical solutions for the procurement of each specific satellite. The purchasing power of EU and national public procurement could be utilised to develop suitable technical standards for space-based data and services, for instance to ensure that these meet particular environmental requirements which would need to be specified.

Source: CSES, based on desk research and interview with JRC.

Another instrument already employed by ESA to promote environmental sustainability is the requirement for suppliers to hold specific environmental certifications or to provide an assessment of compliance with EU environmental directives and regulations. Information can be asked about whether materials or processes that could be harmful to the environment or of workers in relation to occupational health and safety, and which measures are taken to guarantee risk reduction and environmental protection. This requirement usually represents an exclusion criterion for public procurement and is extended to the entire consortium, including all subcontractors.

A similar practice is also being adopted in the aviation sector, where ad hoc standards have been developed by the International Civil Aviation Organization at a global level, the European Aviation Safety Agency at European level, and the national aviation agencies to promote noise reduction, air quality improvement and climate change mitigation. Similarly, NASA could require its supplier companies to prove their compliance with the US clean air and clean water regulations by providing a certification released by the Environmental Protection Agency.

However, along the same line as for the GPP, the inclusion of any certification requirement in the space procurement seems easier to foresee and enforce in case of relatively standardised contracts. It may however be more difficult to impose compliance with harmonised environmental standards in upstream space procurement, since the technical specifications require highly customised space infrastructures.

2.4.2 Feedback on innovation and knowledge creation criteria

The procurement activities of the EUSP have already had a clear and positive impact on fostering innovation. For example, through the Competitive Dialogue procedure, contracting authorities are able to negotiate with contractors to ensure that the final technical solutions procured are innovative, fit for purpose and reflect recent technological developments. There was moreover evidence of early-stage R&D and innovations being integrated into the early phases of space engineering (Phases A, 0 and 1) feeding into the EUSP, for instance, through basic research undertaken by some national space agencies and ESA’s own programmes, which feed into, and inform the development of the technical

22 http://ec.europa.eu/environment/gpp/pdf/criteria/textiles_2017.pdf

http://ec.europa.eu/environment/gpp/pdf/criteria/textiles_2017.pdf


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evolution of satellite hardware and EO and navigational instrumentation used for the EUSP. In addition, contract R&D procured through H2020 Space ensures that the EUSP benefits from innovative procurement to meet early-stage development needs at TRL levels 2-5.

A key research finding was that there are inherent constraints in terms of the ability of the EUSP to integrate ‘state of the art’ innovations due to the overriding need for reliable, high-performance technologies, materials and coatings. This limits the scope to integrate environmentally-friendly technologies into the design and manufacturing of upstream space infrastructures in the core EUSP, until such technologies have been adequately proven, which can take many years. There was confidence that improved technologies and innovations will emerge, but a recognition that the lead times for these to be integrated into the EUSP are slow, due to the overriding concerns about ensuring reliable performance.

Moreover, the European space sector, by definition, has to invest in research, development and innovation (“R&D&I”) to remain internationally competitive. Most space companies interviewed already perceived innovation as being a key goal of procurement contracts. Addressing the technical challenges posed by the space sector often requires firms to develop advanced and innovative solutions. Moreover, contracting authorities are aware that the technical requirements they set in drawing up Technical Specifications in tender documentation need to be kept under review and updated during the negotiation stages with contractors in order that the satellites procured meet the necessary technical requirements and are technologically-sound.

An innovative feature of upstream space procurement is that contracting in the EUSP is viewed as being a negotiated and iterative process with contractors to finalise contract awards. A strong emphasis is placed by ESA and the EC on ensuring that proposed technical solutions are customised. A process of negotiation takes place irrespective as to whether the particular procurement procedure is being carried out using the EU’s procurement rules or the ESA rules. Specifically, mechanisms such as the Competitive Dialogue Procedure23 allow scope for technical solutions to be further elaborated and fine-tuned during the negotiation phase so that these meet client (and end-user) needs. This implies discussions as to how to ensure that any recent technological developments globally are reflected in satellite design, for instance, if these imply a change of approach compared with the contractor’s original offer.

Strong linkages between environmental-related criteria and innovation criteria were noted. Several interviewees suggested that the EC could do more to encourage companies to develop greener space solutions through the EUSP, by using innovation as the driver, and EU funding available through the RTD Framework Programmes (“FPs”).

Crucially, encouraging greater take-up of new technologies and innovations with environmental benefits is dependent on investment to accelerate lead times to ensure that technologies are sufficiently proven to be operationalised. The development and possible future adoption of green technologies in new generations of satellites in the future EUSP in 2021-2027 is dependent firstly on significant investments in fundamental research by ESA and the NSAs, as well as on contract R&D directly procured through H2020 Space. EU R&D&I funding through H2020 Space also has an important role to play, alongside industry play through private R&D&I investments (BERD). Collectively, these various inputs into the early stage space engineering developments feeding into the development of the EUSP (for instance, the design of new generations of satellites), are having a positive impact on embedding innovation. However, challenges remain, such as the difficulty in terms of accelerating lead-times involved prior to particular technologies being sufficiently proven and qualified to be deployed.

23 This procedure is often used for complex contracts where the contracting authority cannot define the technical specifications at the start. The contracting authority must invite at least 3 firms to a dialogue in which the final technical, legal and economic aspects are defined. After this dialogue takes place, prospective contractors submit their final tenders.


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EU regulation may also play an important role in stimulating R&D&I, and in fostering the take-up of new, more environmentally-friendlier technologies. Some legislation affects the European space industry and encourages market participants to search for new solutions. For example, the REACH Regulation24 (Registration, Evaluation and Authorisation of Chemicals) requires the authorisation of some restricted chemicals and the RoHS Regulation 225 (Restriction of Hazardous Substances) prevents the use of certain toxic substances. Such legislation impacts on the upstream space industry by imposing limitations on the use of chemicals and materials for which there may be no alternative substitutes.

Requiring companies to supply technologies, materials and services to reduce the use of polluting or toxic substances, or to mitigate space debris creation, could have a positive impact by encouraging firms to invest in R&D&I into alternative substitutes. This in turn could accelerate the take-up of innovation. H2020 Space for example already allows scope for the direct procurement of contract R&D. This feeds into the early-stage development of the Galileo programme. Although the upfront investments can be significant in order to comply with EU environmental legislation affecting industrial products, over the medium-longer term, investing in the identification and development of substitutes for existing chemicals and materials may be a competitiveness driver. For example, more competitive, innovative chemicals or materials may be developed as substitutes. However, this tends to disproportionately benefit large firms, who have the resources to invest in R&D&I relating to identifying and testing substitutes.

Being REACH and RoHS compliant is in itself advantageous when competing in international markets, since many different regulatory jurisdictions have adopted RoHS-type regimes, and are adopting REACH-like legislation. ESA’s Clean Space division has therefore been encouraging industry to take EU regulations into account as part of overall efforts to reduce the environmental footprint of the upstream space sector in Europe.

There was found to be an ongoing trade-off in space procurement between the imperative of ensuring reliable performance, and the need to minimise adverse environmental impacts. The toxicity of some metals, materials and coatings used in manufacturing in the space industry, as well as propellants used in launchers and fuels used in satellite operations, raises concerns. If the aforementioned do not burn upon re-entry, such as titanium used in constructing satellites, there are attendant risks if toxic substances or materials come into contact with humans.

ESA and the Commission are also working to foster the development of specific green products and technologies to apply in the EUSP. In particular, there is growing interest at ESA in the accelerated development of ‘commercial off-the-shelf’ (COTS) products for the space programmes. For space missions, there is the possibility of shortening the development cycle, starting with existing products and adapting them, rather than starting from scratch.

Even if some attention to fostering innovation is already being paid, overall the EUSP’s ability to promote innovation was found to have some inherent constraints, namely their high risk-aversion. The technologies that are used in satellites and in other space hardware procured by DG GROW/ ESA must be reliable and based on proven technologies (or at least qualified technologies), rather than Best Available Technologies (BATs). Once a new technology has been developed, there is a need for a process to ‘qualify’ these technologies – to carry out exhaustive tests to prove that products and parts, once suitably modified, can perform as required. This process is called ‘space-qualified COTS' by ESA26. The interviews found that the paramount importance given by the EU space programmes to quality and reliability through the use of proven technologies deters the adoption of new innovation and contribute to potential long lead times and certification costs for the supplier firms before many

24 Regulation (EC) No. 1907/2006 25 Regulation (EC) No. 2011/65 26http://www.esa.int/Our_Activities/Space_Engineering_Technology/IXV_spaceplane_flight_helped_guide_Irish_firm_to_new_business

http://www.esa.int/Our_Activities/Space_Engineering_Technology/IXV_spaceplane_flight_helped_guide_Irish_firm_to_new_business

http://www.esa.int/Our_Activities/Space_Engineering_Technology/IXV_spaceplane_flight_helped_guide_Irish_firm_to_new_business


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technologies are considered sufficiently well-tested to be utilised in the space programmes. There is a vicious circle stemming from the potential correlation between positive innovation benefits and negative financial effects: as the technology deployed needs to be reliable and proven, the systems procured tend to be costlier; as they become costlier, procurement authorities become more averse to possible failures, which results in a greater need for reliability.

Such intrinsic risk-aversion in the sector poses substantial obstacles in terms of embedding innovation requirements in the EUSP. Furthermore, risk-aversion also works towards entrenching the status quo situation of the space market, where satellite manufacturing for the EUSP is dominated by primes and there is limited opportunity for innovative start-ups to emerge, since they lack sufficiently proven-up technologies.

If risk aversion can limit innovativeness, there could however be more cost-effective solutions that not only involve newer innovations, but which could save money for the EUSP and still deliver technical solutions that mitigate risk. An example was cited of using a constellation of small satellites rather than a single, large, high-cost satellite. The failure of a large, costly satellite has more dramatic consequences compared with the failure of a couple of small satellites that are part of a wider constellation of small satellites, but presently risk-aversion means that the more conventional, costlier solutions are being selected through procurement in the EUSP. However, it was noted by contracting authorities presently involved in Galileo that presently, the needs for reliable navigational satellites demand large satellites. For example, the most recent Galileo satellite launched in December 2018 weighed an aggregate 1.8 tonnes, comprised of 2 satellites and 2 dispensers (ca. 200 kg each). The unit weight of a satellite is 732 kg.

Neither pre-commercial procurement (“PCP”) or innovation partnerships are presently used as mechanisms to promote innovation. However, within H2020 Space, there is a mechanism to produce early-stage research needs through direct contract R&D. Arguably of greater significance, however, is the fact that the ESA and some NSAs are strongly engaged in fundamental research, which feeds in to the development of space engineering for Phases 0, A and B e.g. relating to Copernicus and Galileo.

The European legal framework for PCP is described in a document27 outlining FAQs on PCP and PPI as follows “When PCP is performed in a competitive, open and transparent way in line with the EU Treaty principles, where the assignment of IPR ownership to companies is reflected at market conditions in the price paid for the R&D service procured, then PCP is not considered State aid. PCP falls outside of the WTO government procurement rules, and outside the EU public procurement directives”.

However, PCP takes place outside the procurement framework by definition, since it relates to research required before later-stage procurements happen, hence why it is known as the ‘missing link in innovation’, although there are difficulties in defining what PCP means. Further issues relating to the possible use of PCP are explored in the scenario 7 (section 3.4).

The Innovation Partnerships only became possible in the 2014 Public Procurement Directive, and only came into force from 2016. There is consequently a lack of experience in implementing these across all sectors, and they have not been used in the upstream space sector. This is seen by some interviewees as a missed opportunity since there is arguably a need for the accelerated development of research into new technologies to shorten lead times for integration into the EU space programmes as “qualified” or “proven” technologies. There are some examples of Member States having changed their legislation to accommodate EIPs. For example, Austria modified their procurement legislation in November 2018.

Some interviewees pointed to the possibility for space procurement to encourage minor innovations, rather than only radically new solutions. For instance, NASA could decide to assign additional award points to bids that can provide evidence of innovations leading to improvements in

27 Pre-Commercial Procurement (PCP) and the link with Public Procurement of Innovative Solutions (PPI) - http://www.imaile.eu/wp-content/uploads/2014/03/FAQs_PCPandPPI.pdf

http://www.imaile.eu/wp-content/uploads/2014/03/FAQs_PCPandPPI.pdf


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operational performance. This issue is investigated in Scenario 5, drawing on the NASA example (Section 3.3).

A further area investigated by the study team relates to knowledge-spillovers. Evidently, since the EUSP involve significant investment in a sector characterised by high technologies and innovation intensity, there ought to be scope to generate new knowledge and IPR and through the creation of spin-offs, to capture and exploit such knowledge, and thereby generate positive economic spillovers. An interesting study carried out by the Canadian Space Agency (see case study below) confirms that important learning, innovation and economic benefits are gained by space supplier companies.

Case Study 2-4 – Knowledge spillovers generated by the Canadian Space Agency contracts

A recent analysis conducted by HEC Montreal on the spillovers associated with Canadian Space Agency contracts concluded that on average for each dollar invested, another $1.2 in spillovers were created. In other words, for $357 million invested by the CSA between 2005 and 2014, the Canadian space industry generated an additional $408 million for the Canadian economy. These spillovers were the result of reputational or networking benefits of working on space projects, the sale of products based on CSA contracts, or organizational/production improvements at the firm level due to experience working on space-related contracts.

Source: Euroconsult (2015) “Comprehensive socio-economic impact assessment of the Canadian space sector”, Final Report, page 54.

Limited evidence is available on the diverse knowledge-related spillovers generated from European space procurement. Among the comments made in respect of how knowledge is utilised to save resources within the programme, some interviewees commented that ESA encourages tenderers to build on their previous investments rather than to reinvent the wheel. Specifically, in terms of spillovers, ESA encourages knowledge the exchange of information about innovation results between ESA and the actors involved in delivering contracts.

When assessing the scope for knowledge spillovers, however, there is a need to take into account the prevailing rules on IPR generated through upstream space infrastructure projects, depending whether the specific procurements are undertaken using EU or ESA procurement and contractual rules. Under ESA rules, IPR ownership rights remain with the economic operator that developed the IP. Under EU rules, whilst Galileo owns the IPR of all technologies developed, a back-licensing scheme exists for all Galileo contracts.

A license to use the technologies does not need to be issued retrospectively to the company when it is needed to pursue the Galileo programme. If an industry wants to use an EU IPR for other purposes, it can request a so-called “extended licence” to the Programme. An example is the licence to Thales to set up an EGNOS-like system in South Korea. A comparison can be made with the IPR regime under Copernicus where the EC owns all the IPR, but in practice, firms may utilise the knowledge learned and technologies developed and apply them in other contexts. Thus, mechanisms are in place to ensure that the procurement contract effectively drives industrial innovation and competitiveness. This is confirmed by different interviewees, that note that there are patents being generated and registered during space infrastructure contracts and “second-round” innovation being developed thanks to the know-how acquired during the procurement contract.

Some interviews indicated that IPR and licensing issues can be problematic in some countries. For instance, if Polish firms take part in H2020 Space projects, there is greater certainty, since they know in advance that operating in a consortium environment, the EC allows all members of the consortium to use and / or to license the IP. Moreover, the research results from projects have to be published. However, there is less clarity on IPR sharing regarding the participation of Polish firms engaged in R&D and innovation funded either at national level or when taking part in ESA projects as subcontractors to primes. Although there is scope for IP sharing, the specific mechanics for this, and whether they are beneficial to SMEs, was seen as being confusing. Other interviewees, however, stressed that regardless the licence/IPR used under a contract, positive learning spillovers are often produced from


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working on EU space programmes contracts, which in turn may produce additional innovation for suppliers.

Knowledge benefits could arise not only for supplier firms, but also for the general public. When examining the broader societal dimension of the EU space programmes, among the feedback was that the visibility of the EU space programmes could be enhanced so as to increase the cultural and public outreach of the space programmes. A Corporate Social Reasonability (CSR) approach to raise awareness among citizens of the societal benefits of space investment could be undertaken. Some firms suggested that some procurement contracts could devote a small share of the budget to carry out dissemination and outreach activities to the general public, on the same vein of what already done with the Horizon 2020 projects.

2.4.3 Feedback on employment criteria

The EUSP already make a large contribution to job creation in Europe. While most of the employment benefits are produced in the downstream sector, previous studies show that positive employment benefits emerge also upstream. Estimates indicate that around 12,000 - 18,000 job-year will be produced by Copernicus in the upstream sector, and around 3,000 job-years by the Galileo and EGNOS programmes (see table below).

Table 2.2 – Indicators of job creation for EU Space Programmes

Space sector segment

Specific indicators and estimates

Copernicus Galileo/EGNOS

Upstream • Job-years expected between 2008 and 2020: 18,000 a

• Job-years expected between 2021 and 2027: 12,000 a

- Job-years expected: 3,000 a, b

Downstream • Job- years expected between 2021 and 2027: 27,000-37,000 a

• Job-years across EO downstream and end-users’ markets from 2015 to 2020: 3,050-12,450 a

- Job-years expected: 50,000 a, b

Source: a) EC (2018), Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the space programme of the Union and the European Union Agency for the Space Programme and repealing Regulations; b) PwC (2017c) Mid-term review of the Galileo and EGNOS programmes and the European GNSS Agency.

The potential for the Galileo/EGNOS programmes to contribute to employment in the EU stems from the fact that their procurement is restricted to European economic operators only. The exceptions within the WTO rules are applied on the ground of security considerations and operators based outside the EU Member States are excluded from bidding. All components procured for navigational services have to be manufactured in the EU with only few exceptions based on availability, i.e. if the contractor proves that there are no alternative European suppliers in Europe for a specific technology or material. This was the case, for instance, of the Galileo’s clocks, which were purchased from Switzerland, or other specialist instruments supplied by Norway.

As far as Copernicus is concerned, the procurement of EO satellites is open to all Copernicus Participating Countries, including EU28 plus Iceland, Norway, Lichtenstein (EEA), while procurement of launchers’ components is open to any economic operator worldwide. Nevertheless, in practice many contracts appear to have been awarded to European economic operators and most of employment created through the Copernicus upstream procurement is generated within the EU. This is also facilitated to the fact that most ground stations are located on EU soil, such as French Guyana.

Employment benefits could also be ensured through the use of technical criteria on data reliability and continuation. Guaranteeing the reliability of data in the long-term is an important requirement for space programmes, which is why data collection from satellites is planned over long periods (5-10 years or even more) and systematically (i.e. every day rather 5 days, and so on). When procuring


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infrastructures for data collection, supplier firms can be asked to ensure data continuity for some years. This requirement, which is used for instance by the French Space Agency CNES, implies that supplier firms have to guarantee a certain level of human resources over a medium-long time period (the duration of CNES procurement contracts of this kind is usually up to five years). This mechanism ensures that jobs are safeguarded for some time. Also, the five-year limit allows some market competition to be ensured, thus avoiding that incumbent suppliers gain a disproportionate competitive advantage. Another way in which the EUSP contributes to employment generation is by stimulating the involvement of smaller companies as subcontractors in the procurement contract. A discussion point during the interviews was the extent to which societal / employment-related criteria could stimulate employment in smaller companies and in fostering the creation and successful scaling-up of start-ups. One way in which the EUSP is able to support SMEs is through minimum subcontracting requirements. Art. 26 of the GNSS Regulation (1285/2013) includes an obligation for prime contractors to subcontract a minimum share of the budget. ESA also requires prime contractors to subcontract a minimum share of the budget to Small Medium Enterprises (SMEs). This type of approach is regarded as effective in ensuring that the significant funding through the EUSP creates employment beyond the primes operating in the upstream space sector. Large incumbent companies and smaller firms agree that the EC and ESA rules on subcontracting to SMEs supports the development of capabilities in smaller firms and promotes the emergence of new market players.

There are also examples of SMEs expanding through winning contracts in the EUSP and becoming primes (specifically, Galileo satellite manufacturer OHB System AG).

New business and employment opportunities are expected in the forthcoming years by the space programmes. For instance, the increasing attention towards space debris removal activities can accelerate the development of new commercials services in the future and the creation of a new niche market, with positive employment benefits as a result.

Given the political importance of employment in Europe, and the potential of the significant investment in the EU Space Programmes in the 2021-2027 period to create European jobs, it could be necessary to do more to strengthen attention to the employment impacts of upstream space contracts. However, several barriers are in place that may limit the possible inclusion of employment as a criterion in upstream space procurement.

As highlighted by an interviewee, other countries internationally (e.g. the US, Russia, India) have a policy of supporting their upstream space manufacturers by buying directly from national operators, especially for the strategically important launcher sector and also when procuring EO satellites. In the EU there is no such requirement. Prime contractors are free to select any subcontractors and in fact around 20% of Sentinels’ components are produced by US manufacturers. The adoption of a “Buy European” approach for the Copernicus procurement procedures would in principle help to increase employment benefits in Europe, but would potentially conflict with WTO rules. Additional investigation, which goes beyond the scope of the present study, would be needed to analyse trade-related considerations and trade-offs relating to possible future changes in EU procurement rules pertaining to changing how Copernicus satellites are procured.

A similar issue relates to the potential of EU space procurement to stimulate employment in particular EU countries, so as to favour a wide distribution of benefits across the EU. NASA regularly launches procurement tenders specifically targeted to companies localised in particular zones of the USA with higher employment and growth needs. Similarly, ESA can decide to assign additional points to bids involving companies localised in specific countries where the space industry is still relatively underdeveloped (e.g. Eastern European countries), but this requirement responds to its geo return principle and not to any economic and territorial cohesion/development considerations. The geo-return principle is followed by neither ESA nor the Commission in the context of EU space procurement, as it would be in contrast with the procurement principles of open access and fair competition stated by the Space Programmes Regulations. Therefore, other mechanisms would have


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to be explored to support employment generation and business development in less developed regions (e.g. through the use of the European Structural and Investment Funds).

Another challenge to the inclusion of employment criteria derives from the possible inconsistency between employment objectives and other procurement goals, specifically technical performance and efficiency. On the one hand, among contracting authorities, some interviewees were sceptical about the inclusion of any employment-related criteria, since they viewed the need for contractors to meet the technical specifications of the satellites as of paramount importance and less so employment. Moreover, a possible requirement on hiring new personnel, could determine the involvement of less experienced staff, which, in turn, could contrast with any technical requirements on the seniority and minimum qualifications of staff mobilised. On the other hand, setting a requirement on job creation is seen by the industry as conflicting with the aim of fostering an efficient use of resources in procurement contracts.

Some stakeholders suggested that it would be easier to focus on the employment outcomes further downstream, where methodologies have already been developed and extensive studies carried out and the scale of these downstream impacts is likely to be much more significant than those generated by upstream space infrastructure. However, there is no particular reason why estimating the upstream job creation effects should be more difficult than the estimates that are already being made for the downstream sector. One possibility could be to set additional employment goals relating to the upstream sector. There might however be some practical challenges in doing so.

From the perspective of industry, it was perceived as potentially burdensome to require contractors involved in the delivery of complex satellites to have to report on how many jobs they were creating. Considered that many of the satellites produced through the EUSP are manufactured in Europe anyway, the requirement of quantifying the number of jobs employed by contractors and subcontractors would be regarded as an unnecessary and cumbersome exercise by the industry.

Employment criteria are likely to generate considerable administrative burdens and costs also for contracting authorities. More specifically, there are concerns that the inclusion of societal and employment criteria within procurement procedures would require the existing procurement team to externalise those aspects of the procurement process relating to such criteria. It was pointed out that the procurement department has a certain skills’ set and knowledge base which is more technical in nature (supported by a legal team). Hence, it may find difficult to design appropriate employment criteria and to set realistic targets.

Difficulties would not only be in the procurement design phase but in monitoring too. The possibility of requiring a self-assessment declaration by the company on the number of jobs created would not require significant monitoring effort by the contracting authority but at the same time they would not guarantee that the impacts would actually take place. In order to make sure that the desired impacts are generated, proper monitoring and evaluation activities should be foreseen by the procurement organisation. Yet, it was pointed out that the procurement department would not have the human resources or technical capacity to take part in follow-up and monitoring. Whilst the contracting department is highly active up until the negotiation of the contract, beyond that they had over to different teams involved in actually monitoring contract implementation. They are only called in should there need to be any changes to the contract or wider contractual issues. They are not involved in monitoring in any way. It was suggested that whereas the technical team involved in contract execution after procurement has taken place would be in a position to undertake monitoring of environmental related criteria since this is part of the technical solutions, any social or employment-related criteria would require external support for monitoring which could be costly.

2.5 Analysis of benefits, costs and challenges

In this sub-section, the benefits and costs, challenges and obstacles associated with the societal


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criteria in scope - environmental, innovation and knowledge creation, and social / employment - are analysed.

2.5.1 Feedback on the benefits

An overview of the benefits linked to the environmental, innovation and social / employment criteria respectively, and of the potential strategic benefits of introducing a societal criteria approach from an EU policy perspective was presented in Section 2.2. However, the interviews revealed that there was no consensus as to the extent to which such potential benefits would/could occur in practice. A concern was expressed that the degree of benefits produced would be highly dependent on the specific way in which any societal criteria were defined, whether they were mandatory or voluntary, and the related implementation mode, as stakeholders were often concerned that any potential (hypothetical) benefits may not arise due to ineffective implementation (e.g. poorly-defined criteria or by making existing procurement procedures more complex).

Stakeholder feedback from contracting authorities suggested that looking ahead to the new MFF 2021-2027, it is essential that the European Commission is able to show that steps have been taken to maximise the positive benefits of the EUSP, and to reduce the potential adverse environmental effects. This is essential to ensure accountability, and to show key stakeholders and EU citizens that the EC takes societal issues appropriately seriously. Larger industry players recognised the imperative of better demonstrating how societal issues are being managed, but expressed concerns that this needs to be done in a way that ensures that the costs are proportionate to the benefits.

Although some industry stakeholders expressed a degree of scepticism regarding the potential benefits of a societal criteria approach, other national and EU stakeholders acknowledged that a number of benefits could materialise. These benefits were viewed as being complementary and adding to the already significant benefits attributed to the EUSP overall. For example, a national space agency interviewed considered that societal criteria could strengthen the long-term competitiveness of the European space sector in general, by requiring contractors to integrate more environmentally-friendly and innovative technologies into technical solutions. This assumes that EU regulation and procurement requirements were more exacting than similar requirements in procurements taking in place in other regulatory jurisdictions e.g. the US.

This was echoed by some interviewees from ESA. For instance, if requirements were included relating to the need for contractors to put in place space debris mitigation strategies, and to make satellites more easily removable towards their end of life, this could mean that European companies developing such technologies could become world-leading. However, this would depend on developments in the regulatory environment in other jurisdictions globally, i.e. whether the deployment of such technologies was required only in the EU initially, or also to win procurement contracts in other countries.

A further benefit was that so long as appropriate indicators were used, societal criteria could help to demonstrate the positive impact of the use of taxpayers’ money, and could provide further evidence as to how public money has been spent and the extent to which it has been well-spent.

There especially seems to be scope to introduce societal criteria in procurement that would increase the positive environmental impacts of the space sector. According to interviewees, some environmental criteria could in principle be introduced to reduce the adverse environmental effects of the EUSP. For example, an LCA methodology could be implemented to encourage greater consideration of complete lifecycle costing, including planning for satellite graveyarding and end-of-life disposal. This would have the benefit of increasing awareness of the life-cycle cost of the use of particular upstream space infrastructures and the deployment of technologies linked to end-of-life planning. A further possibility would be to stimulate the reduction of space debris formation through the mandatory use of ESA’s space debris mitigation guidelines, which would have strengthen attention to the need for industry to work to minimise the risk of space debris formation throughout the project


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lifecycle i.e. from the design and planning stages through to satellite launch and to the in-orbit phase of satellite operations through to graveyarding and end-of-life disposal.

Ultimately, the strategic benefit of clean space is being able to avoid particular orbit cycles needed for navigational or earth observation services becoming too congested with space debris which could undermine Europe’s efforts to maintain an independent European space capability.

Environmental criteria are closely linked to innovation criteria, as promoting the development of environmentally-sustainable solutions would also bring positive innovation impacts. By requiring companies to supply technologies, materials, and services which aim to reduce the use of polluting or dangerous substances, to prolong the life time of satellites, or to manage and reduce space debris, would have a positive acceleration effect on innovation too. However, rather than introducing specific innovation criteria in the procurement process, the RTD Framework Programmes are regarded by most stakeholders as a more appropriate instrument to promote innovation in the space sector. R&D costs and time needed to develop innovative solutions could be high, as they need to undergo a suitable qualification process before being actually used in the space programmes. Such high investments could also hamper the development of the upstream space market: larger companies (primes) would have a competitive advantage with respect to smaller newcomer firms which would need more time to gain the resources necessary to successfully enter the market. In order to limit the risk aversion characterising the space sector and to reduce possible bias towards larger contractors, the case of NASA suggests that innovation procurement criteria could be introduced to encourage minor operational innovations, rather than only radically new solutions.

As demonstrated in previous analytical and evaluation studies, the downstream environmental impact of the EUSP is already significant, and could be further strengthened as more space-based solutions are developed and adopted by institutional or private users. These positive impacts are generally considered to outweigh the negative impacts related to satellite launches and operation, although no detailed studies have been produced yet on this issue. The European Commission, ESA and the European space industry have started working to reduce the negative environmental impact of space infrastructures. The inclusion of environmental criteria in public procurement could reinforce efforts to combat climate change and to ensure clean energy and promote resource efficiency, in line with the latest mission-oriented paradigm for research and innovation policy.28

Feedback about the potential for new space procurement criteria to increase employment is mixed. While upstream space procurement already generates positive employment impact in the EU, the extent to which societal procurement criteria could further promote employment generate is unclear as many legal or technical barriers are in place. For instance, as discussed in the previous section, WTO rules limits the possibility to restrict the Copernicus procurement to EU28 economic operators only. Significant administrative costs are likely to arise in case targets on job creation were to be introduced in the procurement contracts.

2.5.2 Summary of benefits, costs and challenges

The main benefits, potential costs and obstacles that could prevent the introduction of societal criteria in upstream space procurement are presented in the table below, for each type of criteria.

28 European Commission (2017) “Towards a Mission-Oriented Research and Innovation Policy in the European Union – An ESIR Memorandum: Executive Summary”, doi: 10.2777/0956.


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Table 2.3 – Benefits, costs and challenges to the inclusion of societal criteria in upstream space infrastructure procurement

Innovation and knowledge creation

Main potential benefits

Main potential costs Challenges and obstacles

- Potential benefits from the development of new technologies/ products, but also modest and incremental innovations

- Innovation criteria could also stimulate environmental sustainability

- Potentially high R&D cost, including costs to test the new technologies/products and “qualify” them

- Risk aversion: The EUSP are dependent on reliable, proven technologies (or at least qualified), which deters the adoption of new innovations. There can be long lead times and certification costs for supplier firms before many technologies are considered sufficiently well-tested to be utilised in the space programmes.

- Limited potential for procurement to foster innovation: The suitability of the EU Space Programmes, which are operational in nature, to promote innovation was questioned by some stakeholders. RTD FPs are seen as more appropriate to foster innovation. Moreover, neither pre-commercial procurement or innovation partnerships are presently widely used as a mechanism to promote innovation in this sector.

- Legal barriers: Pre-commercial procurement is not expressly allowed under the EU Financial Regulation; however, it is allowed at national level. PCP has therefore been included in the H2020 Space AWP 2016-2017.

- Barriers to market entry: Excessive focus on radical innovation could favour large incumbent companies to the detriment of newcomer firms, having less resources (and/or requiring more time) to develop and qualify innovative solutions.

- Innovation partnerships are untested. Whilst innovation partnerships were introduced as an institutional mechanism to promote innovation in the 2014 Public Procurement Directive, they have not as yet been used in any sector. Their use in the space field could be considered in future, but it would be better to wait until they have been used in other contexts first before a decision could be taken regarding their suitability.

Environmental



- Reduce space debris

- Develop greener technologies and products used by the upstream space sector (e.g. green propellants)

- Stimulate innovation through environmental criteria

- Potentially high R&D cost, including costs to test the new technologies/ products and “qualify” them

- Limited potential benefit: Some stakeholders viewed the environmental impact of upstream space as limited (no more than say 20 satellites/ programme over a 7-year period, largely positive environmental benefits downstream outweighing any possible adverse effect upstream). They suggested that incorporating environmental considerations into procurement may only produce marginal benefits.

- Limited scope of applicability: EC and ESA procure launcher services through the EUSP rather than launchers themselves. It could therefore be challenging to introduce societal criteria since they are not procuring the actual launchers directly.

- Risk-aversion: Difficulty in obtaining sufficiently-proven alternative technical solutions that are as good as existing solutions but which are more environmentally-friendly. There is a trade-off between ensuring high performance levels and adverse environmental effects.

- Need for high R&D efforts: Stakeholders recognise the need to


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Innovation and knowledge creation



remove space debris29 and reduce the risk of debris formation in the future, and ESA has been implementing a Clean Space Strategy since 2012. However, there is a lack of a dedicated ESA or EC-funded space debris programme, and budget has to be found from ESA’s general budget.

- Small market size: Given the high costs, not all stakeholders support making the contractor responsible for the clean-up costs. Although some technologies are still under development by pilot missions, and there is presently a lack of commercial service providers offering to clean up space debris.30

Employment



- Increase attention to employment generation in the EU by the upstream sector

- Administrative and financial cost for designing and monitoring employment procurement requirements, due to the need for appropriate skills development or service externalisation

- Legal framework: The WTO exception rules apply to the Galileo programme for security reasons, allowing procurement to be restricted to EU economic operators only. However, although there is a de facto “Buy European” approach for Copernicus procurements since the ESA rules can be used, this would not be legally-viable when the EU’s procurement rules are used. Under the latter, the principles of open access and fair competition would prevent participation being limited to the certain European regions or countries.

- Lack of skills: Designing and monitoring employment-related criteria would require adequate skills and resources in the procurement department, which are currently missing.

- Conflicting goals: The employment generation objective is perceived by both the industry and contracting authorities as being in contrast to, or at least less important than pursuing goals relating to efficiency and achieving the highest levels of technical performance.

In addition to the challenges presented in the table above, there are other general barriers that can be ascribed to any type of societal criteria and are worth being mentioned. They are the following:

• There is widespread recognition of the societal benefits of space programmes. However, a key challenge is that many of the benefits occur downstream, which calls into question whether the inclusion of such criteria is realistic and worthwhile in upstream procurement. A related risk is that additional costs deriving from introducing societal requirements in upstream space procurement would be disproportionally higher as compared to the corresponding incremental benefits.

• The low number of big contracts for satellites would prevent the mainstreaming of societal criteria in the procurement of new satellites, but would require instead contract-specific requirements to be designed into each procurement. There was a concern that this could be costly for contracting

29 An estimated half a million pieces of debris are currently in space, including abandoned satellites and fragments of old spacecraft. They pose a danger to operating satellites and new space vehicles. 30 Europe's RemoveDebris orbital debris removal demo - https://www.youtube.com/watch?v=3DYYHiW6x44

The active debris removal demonstration is planned for 2018 after deployment of the SSTL-built satellite from the International Space Station.

https://www.youtube.com/watch?v=3DYYHiW6x44


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authorities.

• In more competitive markets (e.g. mid/downstream), the procurement authority has more negotiating power and could find it easier to impose additional criteria and to let potential suppliers compete with each other on this ground. In contrast, in upstream procurement the market is more concentrated. Some interviewed firms argued that including additional societal criteria in upstream procurement (e.g. additional innovation or environmental criteria as exclusion or award criteria) could further reduce competition by forcing some companies out of competition, at least in the short term, and pose technical barriers to new entrant firms, especially SMEs.

3. Scenario analysis

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3.1 Identification of scenarios

As noted in Section 1.1, the core study objective was to undertake exploratory research into the possible inclusion of societal criteria in upstream space procurement. During the second stage of the study, based on an internal analysis and discussions with the Commission, it was decided to focus on three scenarios, which were considered as being the most relevant and feasible in the 2021-2027 period. The three scenarios are:

• Scenario 1 - Mandatory requirement on space debris mitigation;

• Scenario 2 - A (voluntary) award criterion for minor innovations (e.g. operational innovativeness), with 5-10 award points (similar to NASA); and

• Scenario 3 – A pre-commercial procurement scheme to promote innovation in the upstream space sector (similar to NASA’s initiative).

3.2 Scenario 1 – Mandatory or Voluntary Requirement Relating to Space Debris Mitigation and Remediation

The first scenario relates to the challenge of ensuring that risks are minimised in respect of space debris creation through effective mitigation and remediation measures. Examples are: ensuring compliance with ESA’s Space Debris Mitigation (SDM) guidelines and improving technologies to facilitate the removal of satellites beyond their operational lifetime by mission owners should End of Life (EoL) planning for graveyarding or deorbit prove unsuccessful or less convenient. It should be noted that since tackling space debris effectively requires a long-term approach and a combination of mitigation and remediation measures, various sub-scenarios were identified (see Section 3.2.3).

3.2.1 Problem definition – space debris (summary overview)

A summary of the main findings from the analysis of the problem definition relating to space debris is first provided. A detailed supporting assessment of the problem definition, illustrated by data as to the magnitude of the problem is provided in Annex 4.

• The problem of space debris due to break-ups and collisions is of significant scale and magnitude, with approximately 8,000 tonnes31 of space debris.

• There has a been a slow, but linear increase in the number of pieces of space debris. However, the situation has got progressively worse, since two collisions took place in the mid-late 2000s. The hit by a millimetre-size particle of Copernicus Sentinel-1A satellite in 2006, albeit not affecting the satellite operations heightened the need for greater attention to space debris prevention and mitigation in the EUSP.

• It is anticipated that the problem of space debris will continue to get worse over time, and therefore, tackling the problem will require a long-term vision and approach.

• Among the possible adverse consequences of not addressing the problem are the risk of undermining the achievement of Europe’s strategic objectives in the space field, such as maintaining independent access to space, and ensuring that orbits propitious to the development and exploitation of downstream space products and services are not compromised. Both the LEO and GEO regions are denoted as ‘protected regions’, due to their commercial and scientific value,

31 http://www.esa.int/spaceinvideos/Videos/2017/11/ESA_Euronews_Space_debris 8,000 tonnes was the estimate made in November 2017.

http://www.esa.int/spaceinvideos/Videos/2017/11/ESA_Euronews_Space_debris


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but both have a high number of pieces of space debris.

• Whilst ESA has already undertaken a number of measures in respect of debris remediation and mitigation, and invested in supporting developing the necessary technologies, at European level there is not a uniform binding regulatory framework enforcing SDM guidelines and/or remediation measures. Also, there is not a regulatory framework requiring contractors to remove unresponsive satellites in case planned EOL disposal by the manufacturer and/ or satellite operator fails. This is partly due to the lack to date of an in-orbit validated approach, as well as of a sustainable business model that could support this.

• As per the data presented in Annex 4 (detailed problem definition on space debris), if no mitigation measures are adopted to tackle the problem, the number of objects in space in different orbits (LEO, MEO and GEO) would increase substantially between now and 2210.

• There is therefore a need to ensure that the EUSP does not worsen the existing situation in terms of current levels of space debris, and there is a need to ensure that the satellites funded through the EUSP are protected from the growing threat of space debris whilst in LEO and MEO orbits.

3.2.2 Baseline situation (current state of play, technological developments, technology readiness)

In order to ascertain the feasibility of implementing this scenario, or any of the sub-scenarios, it is firstly important to review the baseline situation to ascertain what has been done to date to tackle the problem of space debris.

3.2.2.1 ESA’s Clean Space Initiative

Since drawing up the Clean Space Initiative in 2012, ESA has undertaken work to support European industry in complying with ESA’s Space Debris Mitigation guidelines.

The CleanSat initiative is holistic and takes into account the full lifecycle of space activities “from the early stages of conceptual design to the mission’s end of life – and even beyond, to the removal of space debris”. The components of ESA’s Clean Space strategy, as per the table below:

Table 3.1 – Components of ESA’s Clean Space Strategy relevant to space debris mitigation and removal technologies

Component of ESA’s Clean Space strategy

Initiatives to address problem

CleanSat - supporting the development of technologies to enable industry to ensure that future satellites comply with Space Debris Mitigation requirements.

• ESA’s CleanSat is a technology programme which aims to develop the necessary technologies to support compliance in future generations of satellites with ESA’s Space Debris Mitigation requirements.

• CleanSat has been especially active in supporting the development of end-of-life disposal technologies, demisability and passivation systems.

• The maturation of these technologies needs advancement in several technological fields. The aim is to design satellites in a way that reduces the risk of space debris from being produced in the first place.

Removing existing space debris through ADR missions.

• E-Deorbit32 aimed to be the world’s first Active Debris Removal (ADR) mission. The aim was to remove large pieces of space debris from orbit. Several key ADR technologies have been advanced under E-Deorbit (e.g. robotics, advanced Guidance Navigation and Control algorithms and imaging).

• Then, the concept evolved from one-shot mission to a servicing mission.

• ESA submitted a Request for Information to European industry asking them

32 http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/e.Deorbit

http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/e.Deorbit


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Component of ESA’s Clean Space strategy

Initiatives to address problem

to respond with proposals on how to demonstrate ADR capability along with developing capabilities for On Orbit Servicing.

• Missions could target an ESA-owned derelict satellite in low orbit, capture it, then safely burn it up in a controlled atmospheric re-entry. This will provide an opportunity for European industries to showcase their technological capabilities globally.

• Globally, whilst there has been a lot of research into prospective future ADR missions, no dedicated missions have yet taken place globally. The costs of ADR missions are considered as being high. For example, launching a deorbit mission for ENVISAT has been estimated as costing ca. 300 million EUR.

• Accordingly, the latest thinking is that it may not be cost-effective to fund missions that are solely dedicated to removing one object, it would be preferable if such missions could undertake both ADR in multiple targets and other tasks, such as in-orbit servicing of satellites.

3.2.2.2 The development of an ESA policy on space debris and the Space Debris mitigation guidelines

In order to address the problem of space debris, the Space Debris Mitigation (SDM) guidelines were developed initially internationally and subsequently by ESA. The first international guidelines on SDM were released by the Inter-Agency Space Debris Coordination Committee (IADC) in 2002. These guidelines contained technical requirements on the launch, operation and disposal of space missions with regard to best practice in space debris mitigation. These guidelines were however never legally binding in any of the IADC partner states. These guidelines were subsequently revised in 2007. Based on the work of the IADC, a European Code of Conduct for Space Debris Mitigation was released in 2004. This document represented a commitment from ESA and the four European national agencies of IADC (ASI, CNES, DLR and the UK Space Agency) to implement space debris mitigation requirements on missions under their development.

In 2007, a further success was achieved with the endorsement of the “Space Debris Mitigation Guidelines of the Committee on the Peaceful Uses of Outer Space (UNCOPUOS)” by the United Nation General Assembly (UNGA resolution 62/217 of 22nd December 2007). These guidelines were based on previous work done by the IADC, and focussed on consensus-building across all UN states. Further to the developments of the European Code of Conduct and ISO, ESA has developed an internal policy for ESA missions. The ESA Space Debris Mitigation Policy for Agency Projects (ESA/ADMIN/IPOL(2014)2) was adopted in 2014. It builds on the codified applicability of ISO 24113 for ESA projects, already adopted in 2012 as the ECSS standard ECSS-U-AS-10C “Adoption Notice of ISO 24113: Space systems – Space”.


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Figure 3.1: Key requirements of ESA/ADMIN/IPOL(2014)2 (image right), as derived from ISO 24113 (image left)- SpaceTec Partners

The requirements on space debris mitigation for ESA projects define a minimum set of requirements for the avoidance of space debris, in particular in the LEO and GEO protected areas, and a minimum of risk reduction measures in the case of re-entries of space systems or their components into the earth's atmosphere. The requirements for ESA projects address three issues:

1) Management requirements describing the responsibilities for the implementation of SDM measures, documentation and reporting requirements during the space project lifecycle.

2) Design requirements to limit generation of space debris and to limit the risks associated with debris generated; and

3) Requirements for the prime contractor in the space project to define and verify procedures and strategies to limit the generation of space debris in protected orbital regions.

ESA’s Space Debris mitigation guidelines set out a number of requirements, which are listed below:

Table 3.2 - Requirements in ESA’s Space Debris mitigation guidelines

• Requirement 6.1.1.1: mission-related objects release

• Requirement 6.1.1.2: mission-related objects on-orbit presence

• Requirement 6.1.1.3: launch mission-related objects release

• Requirement 6.1.2.1: pyrotechnic particle release

• Requirement 6.1.2.2: solid rocket motors particle release in GEO

• Requirement 6.1.2.3: solid rocket motors particle release in LEO

• Requirement 6.2.1: intentional break-ups

• Requirement 6.2.2.1: break-up probability threshold

• Requirement 6.2.2.2: break-up probability assessment

• Requirement 6.2.2.3: passivation

• Requirement 6.3.1.1: disposal reliability threshold - (the SDM requirement calls for a reliability threshold of 90%).


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• Requirement 6.3.1.2: disposal reliability assessment

• Requirement 6.3.1.3: disposal reliability constraints

• Requirement 6.3.2.1: GEO clearance

• Requirement 6.3.2.2: GEO disposal manoeuvres

• Requirement 6.3.3.1: LEO clearance

• Requirement 6.3.3.2: LEO disposal manoeuvres

• Requirement 6.3.4.1: re-entry casualty risk acceptance

• Requirement 6.3.4.2: re-entry casualty risk assessment

Source: ESA Space Debris Mitigation Compliance Verification Guidelines

In relation to the above requirements, requirement 6.3.1.1: disposal reliability threshold of 90% is especially relevant to the scenario analysis, since sub-option 1.2 – mandatory satellite removal in case of failure, would be applicable to any satellites that are unsuccessful in end of life disposal and require satellite removal.

3.2.2.3 End-of-life disposal planning for satellites - Lifecycle Assessment (LCA) approach

Regarding efforts to reduce the risk of space debris from occurring, ESA has already put in place mandatory requirements for end-of-life disposal planning for satellites as part of a Lifecycle Assessment (LCA) approach33. LCA goes beyond debris alone and encompasses other aspects including end-of-satellite life de-orbiting, re-entry and disposal. ESA’s Clean Space division notes that there are external pressures on ESA to better assess the environmental impact of its activities, including those relating to the EUSP. "Information on the environmental impact of Agency activities is increasingly requested by ESA’s industrial, institutional and international partners, under pressure from customers, stakeholders and citizens"34.

In the case of GEO satellites, specifically, end-of-life disposal planning includes making provisions in the Technical Specifications for contractors to plan for a “graveyard orbit” once the mission has been completed. This is prior to a targeted de-orbit, and re-entry to earth within a certain period of a mission’s completion. ESA guidance notes that for satellites and orbital stages in or near the geostationary ring, “reorbiting after mission completion to a ‘graveyard orbit’ is the only viable option. The recommended reorbit altitude is about 300 km above the GEO ring. This guarantees that the reorbited object will never interfere with operational GEO satellites. Both the LEO and GEO regions are denoted as ‘protected regions’, owing to their commercial and scientific value”35.

ESA has carried out its own lifecycle assessments36 of launchers, the only organisation to have done so in Europe (or globally). ESA has also undertaken LCA of satellites and of the ground segment. An example of a pilot study undertaken by ESA in relation to LCA is provided below.

33 http://blogs.esa.int/cleanspace/2018/04/20/how-to-make-environmental-friendly-space-missions/ 34 http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/The_Challenge 35https://www.esa.int/Our_Activities/Operations/Space_Debris/Mitigating_space_debris_generation/(print) 36 Life Cycle Assessment (LCA) is an ISO model-based tool. It provides a science-based overview of a product’s environmental impacts throughout its life cycle. LCA has been used by industry for over 30 years for accounting resources consumption and environmental impacts associated with goods and services throughout the entire life cycle, from the resource mining to its disposal/recycle. The use of life cycle thinking (analysing a product from cradle to grave) avoids burden shifting; transferring impacts from one part of the life cycle to another, from one region to another, from one generation to the next.

http://blogs.esa.int/cleanspace/2018/04/20/how-to-make-environmental-friendly-space-missions/

http://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/The_Challenge

https://www.esa.int/Our_Activities/Operations/Space_Debris/Mitigating_space_debris_generation/(print)


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Case Study 3-1 - Results of a pilot study on Life Cycle Assessment (LCA)

In pilot studies, ESA worked to establish the applicability of LCA to the space sector and assessed the environmental impact of two of its launchers. Specific challenges were the collection of primary data, and the lack of some specific mathematical models that could link certain emissions to impact indicators.

To date, the consolidated models used in LCA are applied to terrestrial applications and are valid for the ground segment but a launch vehicle crosses all layers of the atmosphere and while it can be accurately predicted what is emitted by the launcher at which altitude, the atmospheric mechanisms linking these emissions to specific indicators, such as the potential contribution to global warming or ozone depletion, are highly complex.

Source: https://room.eu.com/article/ESAs_Clean_Space_Initiative_and_the_role_of_the_LCA_tool

Based on this piloting experience, ESA developed a Handbook for a Life Cycle Assessment for space missions and activities37. The LCA studies performed by ESA have up until now focussed on both spacecraft and launchers and identified the environmental impact using indicators such as: potential impact on global warming, ozone depletion, human toxicity, and metal depletion. In future, according to ESA, LCA studies will be extended to include propellants, power and thermal control subsystems, manufacturing processes and ground testing. Detailed studies have also been planned to take into account the physical and chemical effects of rocket launches on the environment, particularly the effects of their exhaust on stratospheric ozone.

ESA has already required prospective contractors to include LCA costings and planning on a number of occasions in ESA procurement, including for satellites procured by ESA on behalf of the EC through the EUSP. The purpose is to mitigate the risk of new space debris being formed or of collisions occurring.

ESA commented that whilst it is relatively straight forward to request an LCA when commissioning upstream space infrastructures in procurements, it is not mandatory presently. An argument made in favour of an LCA approach is that if an industry player claims that their technology is greener than existing technologies, this needs to be proved up with data. The commissioning of new launchers has therefore included a request (but not an obligation) to conduct an LCA. Ariane 6 included such a request, as was the case for Sentinel 3. Tender documentation pertaining to procuring new Copernicus satellites has therefore included a voluntary request that LCA should be carried out. However, producing an LCA is technically demanding, since appropriate methodologies to assess cost-effectiveness are needed, together with a detailed knowledge of the characteristics of the products and materials used.

LCA can be a helpful mechanism in ensuring that environmental factors are fully considered by contractors, and also the financial considerations linked to managing risks throughout the duration of a satellite’s deployment. There are analogous uses of LCA in other sectors, as illustrated in the CERN case study presented below. This highlights the importance of setting clearly defined and quantifiable indicators to ensure objective evaluation and monitoring by the procurement organisation.

37 Developing a standardised methodology for space-specific Life Cycle Assessment - https://aerospace-europe.eu/media/books/CEAS2015_237.pdf and Julian Austin, European Space Agency, Clean Space Systems Engineer and EcoDesign handbook for a Life Cycle Assessment for space missions and activities

https://room.eu.com/article/ESAs_Clean_Space_Initiative_and_the_role_of_the_LCA_tool

https://aerospace-europe.eu/media/books/CEAS2015_237.pdf



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Case Study 3-2 – Enforcing environmental criteria in CERN procurement

Description: CERN procurement is mainly driven by technical and financial considerations. Although environmental sustainability is not a direct objective of CERN procurement, CERN adopts a life-cycle costing (LCC) approach when procuring certain equipment. Such an approach is mainly driven by cost control considerations, but LCA was also regarded as having positive environmental benefits.

Example of how it works in practice: When procuring technical equipment characterised by large power needs, supplier companies are requested to provide in their technical offer a forecast of all the costs that will be incurred during the equipment’s lifetime, including its operating, maintenance and disposal costs. For instance, if the Tender Specifications request the delivery of servers or big power transformers, the tenderers must specify in their proposal the power consumption cost (expressed in KwH) during the good’s expected lifetime. Once the bid that represents the best value for money is selected, CERN tests the procured equipment and verifies whether the power consumption claimed in the bid is correct. In case of any discrepancies, a corrective mechanism is adopted: the contract’s value is diminished proportionally to the extra cost estimated by CERN over the equipment’s lifetime. For environmental requirements of this kind to be included in CERN procurement, they should be quantifiable, so as to allow verification by CERN before contract signature.

Replicability and transferability to the space sector: ESA and the Commission could consider the application of specific environmental requirements on the future power consumption of the procured equipment in the context of space procurement. Information about the expected time horizon of the equipment and its power consumption when fully functioning can be easily provided by suppliers. The procurement organisation, however, would be required to have arrangements in place and the necessary technical capabilities to test the procured equipment before putting it into service. Alternatively, this capacity could be provided by a third party notified body with expertise in testing and certification. Source: Interviews

There are also other ways in which progress is being made to avoid the creation of unnecessary space debris or of toxic materials such as the integration of eco-design principles into the design of satellites. This should help to reduce the toxicity of the EUSP. However, given the clear focus on space debris mitigation and remediation, information about the baseline situation and key issues in respect of ecodesign and challenges around the identification of environmentally-friendlier materials and metals used in satellites and the availability of substitutes is provided in Annex 5.

3.2.2.4 Space Debris Mitigation and Active Debris Removal

The state of play and key policy and technological developments in respect of space debris detection and tracking, risk mitigation and removal technologies to date are now considered at an EU level and in ESA participating states. These will influence the extent to which particular scenarios could be implemented as part of a societal criteria approach in the EUSP, and by when. In addition, for benchmarking comparator purposes, the situation in the EU and the US has been compared.

In order to make progress in space debris mitigation, ESA has published a number of documents such as the ESA Space Debris Mitigation Handbook38, which dates back to 2002, and the 2015 ESA Space Debris Mitigation Compliance Verification Guidelines39. The ESA Space Debris Mitigation Handbook provides technical support to projects in the following areas:

• description of the current space debris and meteoroid environment; • assessment of risk potential due to debris and meteoroid impacts; • analysis of the space debris environment in future; • implementation of efficient space debris mitigation measures; • assessment of risk due to re-entries; and • planning of debris shielding and/or collision avoidance concepts matching the mission needs and

system capabilities.

38 https://gsp.esa.int/documents/10192/43064675/C14471ExS.pdf/2215fcb7-d8a4-4816-8881-5e0f3f8c5024 39 https://www.iadc-online.org/References/Docu/ESSB-HB-U-002-Issue1(19February2015).pdf

https://gsp.esa.int/documents/10192/43064675/C14471ExS.pdf/2215fcb7-d8a4-4816-8881-5e0f3f8c5024

https://www.iadc-online.org/References/Docu/ESSB-HB-U-002-Issue1(19February2015).pdf


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Space debris mitigation measures can be categorised into (1) those that limit the scope for the generation of potentially harmful space debris in the short term and (2) those limiting their generation in the longer term. The former involves managing the avoidance of production of mission-related space debris and break-ups of satellites due to collisions. The latter concerns end-of-life procedures that remove decommissioned satellites and launch vehicle orbital stages away from regions populated by operational satellites to minimise the risk of accidental collisions.

A further example of a mitigation measure adopted by ESA is to take EO satellites out of operational orbit prior to them being at the end of their maximum duration capacity of 10 years+. For example, satellites procured through Copernicus have a lifetime of 7.5 years, after which they are taken out of service and deorbited/ graveyarded40. The aim is to reduce the risk of system or sub-system failures, which could lead to control of a satellite being lost and an increased risk of a collision and new space debris being created. Although the lifetime of a Copernicus sentinel is less than the maximum technically-possible operational duration of the satellite, this approach is less risky and will help to avoid a repeat of the situation with ENVISAT in which space debris was created. Whilst typically, for Copernicus and Galileo, the timeframe for de-orbiting is within 5 years of a mission being completed, de-orbit could take place up to 25 years afterwards41. The timeframe after which de-orbit takes place appears to be less important provided that the satellite is graveyarded in an orbit that is safely away from operational satellites.

Regarding remediation strategies to address the problem of space debris, ESA has recognised the need for mitigation measures. Technological possibilities include:

• Securing debris using either a net or robotic arm.

• A harpoon-based capture concept. Although ESA is running some research activities into this technology, the conclusion is that it “doesn’t offer enough advantages over a net or robotic arm”42.

Some R&D projects have taken place to develop and test space debris removal technologies. Evidence was identified that many ADR technologies are at quite an early stage of development, and it will take time before the technologies have been sufficiently proven to be deployed. The anticipated timeline for the projected launch of an ADR mission similar to e-Deorbit is 2023-2024. Since the project was initially conceived, the concept has evolved. Whereas the original mission was to take down a single target (a derelict satellite), it is being given a wider role, "as a new space servicing vehicle to perform a variety of different roles in orbit, including the refuelling, refurbishing or re-boosting of satellites already in orbit”.

In setting out the Space Debris Mitigation Policy for Agency Projects (March, 2014)43, ESA notes that “to minimise the impact of space operations on the orbital environment, to reduce the risk of collision on orbit and to ensure the safety of the public on ground during re-entry, mitigation and safety measures must be anticipated as from the conception of a space system”. ESA has been giving consideration as to how contractors could share responsibility with mission owners for debris removal from any debris generated by satellites paid for under the EUSP or through the ESA programmes.

40 Technically there is not a ‘graveyard’ orbit in LEO. Satellite should be actively or passively de-orbited to an altitude at which they’ll decade and burn into the atmosphere. 41 Parking in graveyard orbits is feasible for longer periods, but there is a need to keep the in-orbit lifetime within 25 years after the end of mission to reduce the risk of in-orbit collision. To remove mass from densely-populated orbits, it is recommended that satellites and orbital stages be commanded to re-enter Earth’s atmosphere within 25 years of mission completion, if their deployment orbit altitude is below 2000 km (in the LEO region). 42 http://blogs.esa.int/cleanspace/2019/01/09/from-adr-to-in-orbit-servicing-the-shifted-trajectory-of-e-deorbit-part-three/ 43 https://www.iadc-online.org/References/Docu/admin-ipol-2014-002e.pdf

http://blogs.esa.int/cleanspace/2019/01/09/from-adr-to-in-orbit-servicing-the-shifted-trajectory-of-e-deorbit-part-three/

http://blogs.esa.int/cleanspace/2019/01/09/from-adr-to-in-orbit-servicing-the-shifted-trajectory-of-e-deorbit-part-three/

https://www.iadc-online.org/References/Docu/admin-ipol-2014-002e.pdf


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Accordingly, research has already been undertaken by ESA to facilitate the implementation of the Space Debris Mitigation requirements using Design for Demise (D4D)44 and Design for Removal principles. There is strong interest in D4D as satellite manufacturers need to design alternatives that would cause the satellite to “disintegrate” (demise) during the re-entry in atmosphere, whilst not cause casualties on the ground. The requirements state that there must be a less than 1 in 10,000 chance of someone being hit by falling space debris.

As noted earlier, thanks to ESA Clean Space support, there have also been important developments in respect of the development of ISO standards in space debris mitigation, which in 2012 were adopted by the European Coordination on Space Standardisation (ECSS). There have also been standards-related developments in the US of a similar nature relating to space debris mitigation (see the next sub-section).

Lastly, it is also worth noting that space debris mitigation and remediation (including removal technologies) may have future commercialisation potential45 and the ability to generate competitive advantages for European firms. For instance, a regulation may be introduced in the future that requires mission operators to set aside contingency budget for space debris removal, and many governments and space agencies have recognised in various strategies and policies that debris mitigation and remediation will be increasingly necessary in future. Therefore, ESA’s Clean Space Unit has begun investigating the commercial potential for the provision of such services through dialogue with industry.

3.2.2.5 Developments to mitigate space debris in the US

NASA focuses on the development of detection and tracking technologies, risk mitigation and collision avoidance, but has also invested significantly in funding research projects and public-private partnerships to accelerate the development of space debris removal technologies. In order to facilitate work in these areas, NASA operates an Orbital Debris Program Office46. The Office has taken the lead internationally in conducting measurements and in developing the technical consensus for adopting mitigation measures to minimise the risks of space debris.

Regarding efforts in the US to strengthen debris mitigation practices, NASA has developed U.S. Government Orbital Debris Mitigation Standard Practices in 200147. A NASA Technical Standard has also been developed relating to debris mitigation (8719.14). Furthermore, NASA Procedural Requirements for Limiting Orbital Debris48 - NPR 8715_006B came into effect in 2007. The most recent iteration of these was produced in 2017. There are some commonalities here with the approach being adopted by ESA, in that ESA has also developed mitigation guidelines, although adherence with these has not yet been made mandatory in the EUSP.

The Department of Defense in the US maintains an accurate satellite catalogue on objects in Earth orbit that are larger than 10cm. NASA has developed long-standing guidelines to assess whether the threat of passing close to specific space debris that has been mapped is “sufficient to warrant evasive action or other precautions to ensure the safety of the crew”.

The remediation of existing debris through Active Debris Removal (“ADR”), has been recognised in literature as being essential to prevent a build-up of dangerous debris that could pose problems in future. In June 2010, the National Space Policy for the USA directed NASA and the Department of Defense to “pursue research and development of technologies and techniques… to mitigate and

44https://www.esa.int/Our_Activities/Space_Engineering_Technology/CDF/Design_For_Demise_A_First_Look 45 The future of the European space sector: How to leverage Europe’s technological leadership and boost investments for space ventures, January 2019. http://www.eib.org/attachments/thematic/future_of_european_space_sector_en.pdf 46 https://orbitaldebris.jsc.nasa.gov/ 47 https://orbitaldebris.jsc.nasa.gov/library/usg_od_standard_practices.pdf 48 https://orbitaldebris.jsc.nasa.gov/library/npr_8715_006b_.pdf?t=NPR&c=8715&s=6A

https://www.esa.int/Our_Activities/Space_Engineering_Technology/CDF/Design_For_Demise_A_First_Look

http://www.eib.org/attachments/thematic/future_of_european_space_sector_en.pdf

https://orbitaldebris.jsc.nasa.gov/

https://orbitaldebris.jsc.nasa.gov/library/usg_od_standard_practices.pdf

https://orbitaldebris.jsc.nasa.gov/library/npr_8715_006b_.pdf?t=NPR&c=8715&s=6A


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remove on-orbit debris” However, currently, no U.S. government entity has been assigned with the task of removing existing in-orbit debris.

Despite the lack of a dedicated entity responsible for removing space debris, NASA has recognised that there is a need for prioritisation in ADR remediation strategies. "Remediation techniques need to focus on removal of small sized (but still damaging) debris. If the goal is to control the long-term growth of the debris population, ADR techniques need to concentrate on the removal of large, massive objects such as intact rocket bodies and non-functional satellites. These massive objects are the long-term source of fragmentation debris from on-orbit explosions and collisions”. Studies have indicated that the removal of as few as five of the highest risk objects (defined as mass x probability of collision) per year can stabilize the long-term LEO debris environment (ODQN 15-3, ODQN 15-2).

Like ESA, NASA is funding demonstration projects to prove up ADR technologies49, as per the case study example below.

Case Study 3-3 – The NanoRacks-Remove Debris project – ADR demonstration project

The NanoRacks-Remove Debris project50 has demonstrated removal technologies using a 3D camera to map the location and speed of debris and deploying a net to capture and de-orbit simulated debris up to 1m in size. The purpose was to demonstrate different ways of dealing with space junk by identifying it, and physically removing it. The project was implemented in 2018 as part of an expedition to the ISS. Whilst funded by NASA, many European companies and universities were involved in delivering the project.

The technology demonstrations were conducted in orbit using a microsatellite test-bed. The microsatellite carries the Active Debris Removal payloads together with two deployable nanosatellites (CubeSats). Through a series of operations one of the nanosatellites is ejected, re-captured, and de-orbited. The other is the target of the visually- based navigation experiment. The CubeSat, which is the target of the visual based navigation experiment, has aboard attitude and GPS knowledge transferred over a “spacecraft to spacecraft” radiofrequency (RF) link. Once the demonstrations are completed the micro satellite are rapidly de-orbited using a drag sail thereby demonstrating the key Active Debris Removal technologies.

The NanoRacks-Remove Debris satellite was deployed from the International Space Station (ISS) via the Japanese Experiment Module (JEM) Airlock using the NanoRacks Kaber MicroSat Deployer. It then used a robotic arm to catch space debris.

Source: https://www.nasa.gov/mission_pages/station/research/experiments/2456.html

3.2.2.6 Developments to mitigate space debris at national level

There are also examples of national activities to mitigate space debris in the EU. For example, the French Space Operations Act already obliges space operators to 1) design, produce and implement launchers “in such a way as to minimise the production of debris during nominal operations, including after the end-of-life of the launcher and its component parts, and to 2) design, produce and implement the orbital systems “so as to avoid generating debris during nominal operations of the space object”, in the following situations:

• Launch and return operations carried out from the French territory;

• Launch and return operations carried out by a French operator from a foreign country;

• Procurement of a launch by a French entity; and

• Control of space objects in outer space by a French operator.

49 https://www.nasa.gov/mission_pages/station/research/experiments/2456.html 50 https://www.nasa.gov/mission_pages/station/research/experiments/2456.html

https://www.nasa.gov/mission_pages/station/research/experiments/2456.html




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3.2.3 Possible sub-scenarios

Three different sub-scenarios have been defined, with differing levels of ambition (see Table 3.3). The purpose of defining more than one sub-scenario within an overarching scenario is to demonstrate the potential value of a holistic approach to space debris mitigation and remediation. Since progress towards the objective of effective prevention, mitigation and the management of space debris is part of a longer-term policy endeavour, this scenario has been defined as being part of a continuum with measures needing to be taken to address the problem in the short, medium and longer term.

Table 3.3 - Sub-scenarios towards effective Space Debris Mitigation and Removal.

Sub-scenarios Rationale and background

1.1 - Mandatory compliance with the ESA Space Debris Mitigation (SDM) Guidelines

• ESA developed the Space Debris Mitigation Guidelines51 and updated the ECSS standards accordingly in 2015. These minimise the risks associated with space launchers and with in-orbit satellites, including risks relating to end-of-life planning.

• Compliance with the guidelines is already required for ESA programmes.

1.2 - Mandatory requirement for contractors to make their satellites ‘removable” (in case their planned EOL disposal is not successful).

• The ESA Policy on Space Debris states that satellites must remove themselves from the protected regions, less than 25 years for LEO and less than two months for GEO after operations are complete. ESA now designs its satellites for removal. However, some satellites may fail to be successfully disposed and require removal.

• As ESA points out on its website, “even if spacecraft are designed to achieve an End-of-Life (EOL) compliance with the Space Debris Mitigation (SDM) requirements, a failure of the spacecraft, or other unforeseen events, may lead to the satellite becoming non-operational in the protected regions. Therefore, such a failed satellite may require active debris removal (ADR)”. Satellite removal in case of failure would therefore involve going beyond the minimum requirements and thresholds set in the SDM guidelines, which impose a 90% reliability threshold on end-of-life planning but do not state what should happen in the eventuality that end-of-life disposal planning fails.

• A mandatory requirement could be placed on satellite manufacturers and space system integrators to ensure that satellites are ‘designed for removal” to remediate if their planned post-mission disposal is not successful.

Note – the distinction between 1.1 and 1.2 is that ‘design for removal’ is not included in the SDM mitigation guidelines.

1.3 - Mandatory requirement for mission owners and contractors to contribute towards the cost of future ADR missions (in case of unsuccessful post-mission disposal (PMD) measures).

• The principle is that either the mission owner foresees a controlled or uncontrolled re-entry of its satellite(s), or foresees an active removal of its satellite(s) at the EOL, or commits to remove the satellite(s) in case of failure or unsuccessful PMD measures.

• The mission owner (e.g. ESA, DG GROW) should set aside a contingency budget for future potential ADR missions in case the satellite needs to be removed at the EOL, or even earlier in case of a failure

• In addition, wider stakeholders involved in launching space systems, including contractors, should be required to set aside a certain % contingency budget to contribute to ADR, if remediation is needed due to debris being created by a particular satellite.

• This scenario is based on risk-sharing principles.

51 https://www.iadc-online.org/References/Docu/ESSB-HB-U-002-Issue1(19February2015).pdf

https://www.iadc-online.org/References/Docu/ESSB-HB-U-002-Issue1(19February2015).pdf


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Sub-scenarios were included that could make a contribution to improving risk management to minimise the risk of space debris formation in the new MFF. The sub-scenarios identified are part of a continuum and are not mutually exclusive.

3.2.4 Costs and benefits

The analysis of costs and benefits relating to Scenario 1 could not focus on all sub-scenarios, given the study’s limited budget, and the fact that the scenarios were developed late in the study (which meant that detailed feedback on costs could not be collected from industry).

The focus has been on identifying and analysing any broad cost parameters to provide an indication of the nature of costs and benefits, the main drivers, and the order of magnitude of these costs. Costs and benefits were assessed relating to the following:

• (1) Mandatory requirement for contractors to make their satellites ‘removable”

• (2) The development of ADR technologies and the possible launch of ADR missions for space debris removal.

3.2.4.1 Costs of mandatory requirement for European contractors to make their satellites ‘removable”

As noted earlier in defining the scenarios (Section 3.2.4), a mandatory requirement for contractors to make their satellite removable would only be needed in case their planned EOL disposal is unsuccessful, or if the satellite fails and becomes uncooperative (e.g. ENVISAT case). Such a requirement would go beyond the minimum requirements set out in ESA’s SDM guidelines (see previous sub-scenario 1.1), which has set a threshold that end-of-life satellite disposal planning must be reliable to a minimum threshold of 90%.

In order to analyse the costs, it is first necessary to define the main cost drivers.

The research found that "design for removal" is relatively simple technically speaking. This would require that the interface between a satellite procured through the EUSP and a future ADR mission would have to be standardised so that a future ADR mission can undertake a removal. The design to make this happen could be relatively straight forward, for instance, ensuring that a docking point is a mandatory part of satellite design. The current trend is to use the launcher adaptor pad as a docking point.

ESA is currently carrying out studies to investigate the development of satellite for removal technologies through ESA technology programmes such as TRP and GSTP. ESA is also funding projects to define guidelines to design a satellite for removal, and in parallel, to support the development of a new generation of satellites for the EUSP. In order to advance the new technologies to TRL 3, the total budget is €1.3 million. Regarding the R&D costs for ESA of progressing to the next stage, our interviews suggest that this is not expected to be higher than €10 million.

Moreover, ESA is presently working on the development of a technical standard that could be used for this purpose. The existence of an ESA standard will reduce the costs incurred by industry. Since the standard under development by ESA involves working in liaison with the European Space industry, and since only a couple of industry primes dominate satellite manufacturing, provided there was sufficient time to incorporate such features into satellite design from the outset, the costs would be low to negligible. Moreover, some manufacturers have already designed their satellites to be removable, and there would therefore be no additional compliance costs.

For industry, therefore, given the development of the ESA standard, R&D costs would not be expected to be that extensive, beyond a few million EUR. Moreover, some contractors already design their satellites in a way that ensures that satellites can be made removable by mission owners, for instance by building a docking station to facilitate removal through possible future ADR missions.


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Since contracting authorities involved in the EUSP account for a significant market share of the European satellite market, they will need to make various technological improvements (including satellite removal capabilities) in designing satellites to meet the requirements of the next generation of satellites regardless, since such a requirement has already been introduced for ESA’s own procurement of satellites outside the EUSP.

Therefore, the costs of extending this to the Commission-coordinated EUSP would involve a relatively high percentage of Business as Usual (“BAU”) costs i.e. a discount factor of perhaps 50% could be applied. Therefore, the net costs per large manufacturer might be expected to be in the order of €1-2 million of R&D costs to ensure that satellites are designed for removal. However, a high percentage of these costs would be Business as Usual (BaU) costs, provided that the contracting authorities ensure that the introduction of such requirements is flagged up sufficiently early in the design of the next generation of EO and GNSS satellites funded through the EUSP.

An interviewee from ESA pointed out that the likely delta recurrent cost for industry to design satellites would be “extremely limited, around a few thousand euro”. These costs would be linked to having on board additional elements such as ensuring that there is a grabbling handle capability and visual aids to help navigation. These can be develop at low cost since they will become recurrent standard pieces. Of course, such technologies will first need to be qualified, and there would be R&D costs in doing so, many of which will be borne by ESA rather than industry as explained above (see the analysis of ESA’s technology programmes).

A general observation that can be made regarding the order of magnitude of costs of this sub-scenario is that the costs of designing satellites to be removable by mission owners are very low in comparison with the costs of ADR missions to remove space debris that would be funded by mission owners (estimated at €300-€500 million per mission). The ratio is approximately 1:100. An argument could therefore be made that since mission owners ultimately take responsibility for funding costly ADR missions in the eventuality of EOL satellite disposal planning by the contractor failing, this is a modest cost for industry to bear (to be factored into their risk management and contingency planning) compared with the high costs of removing debris through ADR missions.

There may also be the possibility in the longer-term future of contractors taking responsibility for removing their own satellites if technological developments allow and the costs of ADR are reduced.

For contractors whose satellites are not yet fully able to comply with such a potential requirement, there would evidently be costs associated with ensuring that future generations of satellites could meet such requirements. This would include:

• Substantive compliance costs - e.g. investing in R&D&I to design in such features.

• Administrative costs – e.g. ensuring that key compliance managers and senior management gain familiarity with any requirements relating to ensuring that satellites are removable. Information obligations relating to monitoring and demonstrating compliance with such requirements.

An interviewee from ESA pointed out that the costs in relation to mandatory removal at end of life (in case of failure) would strongly depend on the configuration (e.g. uncontrolled versus controlled) being the controlled re-entry the most demanding one because of the amount of propellant which is necessary to implement it and the relative modification of the satellites. This would require a case by case assessment according to the orbit and the mass of the satellite.

In the following Figure, we provide an indication of the order of magnitude of the costs and benefits of a mandatory requirement to ensure that satellites can be removable.


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Figure 3.2: Expected costs and benefits - mandatory requirement to ensure that satellites are removable in case of unsuccessful EOL disposal, or premature failure

Qualitative assessment of magnitude of costs (see earlier above for quantitative costs data estimates).

Regarding the differentiated impacts between large firms and SMEs, primes would be the main affected stakeholder type, since only leading manufacturers are capable of producing EO and navigational satellites of the scale required in the EUSP (which typically requires highly customised satellites). However, SMEs may be impacted if they are part of the supply chain. They may potentially be able to develop niches in the development of satellite removal technologies (e.g. GNC algorithms or advanced imaging).

In terms of the impact on international competition, ESA is the main space agency globally that is very active in the field of “design for removal”52. Therefore, European contractors working for ESA are likely to develop more advanced satellite removal technologies compared with their global counterparts. However, there were some challenges in determining the baseline situation in respect terms of the capabilities of international competitors in satellite manufacturing. This could not be clearly established without expanding the interview programme to include international companies in the space industry. It could however be examined through future research.

Nevertheless, the fact that if the EUSP were to adopt the ESA approach in ESA funded programmes and to include such a mandatory requirement in the EUSP to make satellites designed for removal, then it is likely that over time, European satellite manufacturing companies would become more competitive over time. They would need to ensure that such technological capabilities are developed as standard in Europe, which would then put them in a strong competitive position to compete for international public procurement opportunities to develop satellites. Moreover, since EO and GNSS

5252 http://blogs.esa.int/cleanspace/2018/09/13/esa-now-designs-its-satellites-for-removal/

http://blogs.esa.int/cleanspace/2018/09/13/esa-now-designs-its-satellites-for-removal/


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satellites procured through the EUSP account for a significant share of the total European satellite market, they could cement their position in the European market.

Subsequent studies could consider how far designing-in satellite removal technologies is likely to influence competitiveness in further detail. This is an area where there is not very much information and data available in secondary literature. However, it is self-evident that the impact on industrial competitiveness will be strongly dependent on how other space agencies and public funders of upstream space procurement globally react to a European-led initiative to make all satellites designed for removal. If other space agencies globally quickly adopt the European standard and/ or introduce similar mandatory requirements, European industry would be well-placed to bid for contracts, although the extent of their competitive advantage may be diminished if such requirements become standard across all public sector markets for satellites.

Many of the benefits however of making this requirement mandatory stem more from preserving particular orbits for public good and commercial uses, rather than running the ongoing risk of new space debris being created, which would undermine the many downstream space benefits of EO and GNSS data identified in previous economic literature and evaluations commissioned by the European Commission, ESA and other space actors in Europe, such as the NSAs.

Some literature was identified focusing on the optimal technologies for safe satellite removal in case of satellite failure. The fact that a standard has been developed by ESA ought to positively reduce the level of costs for industry, but this will also depend on how far European industry follows the standard and which commercial technologies emerge as being dominant in satellite removal design.

3.2.4.2 Costs of ADR space debris removal missions and deployment of ADR technologies.

Regarding the removal of existing debris, little government funding has been available for such programmes to date. ESA is the most active space agency globally with regard to systems design of end-to-end ADR missions (different studies in relation to e.Deorbit mission to remove a large defunct satellite of ESA), as well as in initiating ‘design for removal’ practices for its future missions (the latter relating to the previous sub-scenario). The European Commission has funded RemoveDebris53, a mission to demonstrate the removal of Cubesats in Horizon 2020.

The need for ADR (and On Orbit Servicing) capabilities is likely to rise in the coming years, driven on one side both a more aware institutional demand to contribute to remove own share of existing debris, and by the demand of firstly the GEO operators wanting to extend their operating life, and then by LEO operators to be compliant to space debris mitigation guidelines (e.g. asking for a servicer to support controlled re-entry54), or to repair a satellite which encountered an injection or an early orbit failure. With this comes new market opportunities. The dawn of large mega-constellations promising global broadband and high-refresh imaging are likely to stretch orbital capacity and may give rise to heightened risks of collision. Cascading effects from such collisions could very quickly destroy many of the high-value LEO orbits that these mega-constellations need.

Such trends have not gone unnoticed by the commercial industry. As such, a variety of ADR and OOS offerings are now being put forward as possible commercial solutions that could be funded by mission owners. These are all in various stages of development.

53 The RemoveDebris project - https://ncp-space.net/removedebris-operation-space-clean-up/ 54 Concept mentioned by G. Levrini at ESA CleanSpace Industry days on 24 October. Also confirmed as a potential service offering by new OOS players like Effective Space. Specifically, according to Effective Space their roadmap of services will start from OOS to GEO, followed by OOS to LEO and ADR to institutional clients.

https://ncp-space.net/removedebris-operation-space-clean-up/


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An overview of the most promising planned ADR/OOS missions is provided in the following table:

Table 3.4: Overview of planned ADR/OOS missions worldwide (realistic)

Mission Name Region Main partner(s) Cost / Funding Timeline Key Features

e.Deorbit Europe ESA TBD. In the range of €300 M (full mission costs) for removing a large satellite

Planned launch 2023 Initially planned for the deorbiting of a defunct ESA satellite (most likely Envisat). Capture via either a net or robotic arm.

RemoveDEBRIS Europe University of Surrey / Surrey Space Centre (SSC), SSTL, Airbus, ArianeGroup, CSEM, Inria, ISIS, Stellenbosch University (ZA)

Approx. €15M

(50% EU funding, 50% industry partners)

Launched 02.04.18 100 kg spacecraft with LIDAR and optical tracking, using harpoon and net mechanisms for capture. It will also test an atmospheric drag sail for deorbiting. Capture will be of two (self-released) cubesats.

Launched to International space Station and released for testing on 20.06.18.

ELSA / Astroscale Singapore / Japan / UK

Astroscale Raised $53M in venture capital and private funding

Demonstration planned in 2019

Based in Singapore, with R&D in Tokyo and offices in London. Targeting the nascent On Orbit Servicing market, can turn to provide ADR services to institutional and commercial clients if the needs arises.

Mission Extension Vehicle (MEV)

USA OrbitalATK (SpaceLogistics)

Unknown- - potentially recurring cost estimated at USD175 million max, as indicated in a ATK press release as a price to make a 5-year extension mission convenient for a GEO operator

Launch planned late 2018.

Planned for OOS of GEO satellites, however may also later be used for ADR from LEO. OrbitalATK already has contract for two MEVs from Intelsat. Also received approval from U.S. government for rendezvous, proximity operations and docking with Intelsat-901.


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Clean Space One Europe École Polytechnique Fédérale de Lausanne (EPFL)

Estimated €13M Demonstration planned in 2021

Uses a conical net-like structure to capture target. Planned to be tested on the capture of the EPFL SwissCube cubesat. Now also working with industrial partners to commercialise system.

Space Drones UK / Israel Effective Space $100M deal with large GEO operator in place

First OOS launch for GEO in 2020.

“Phase 1” is to provide OOS for GEO satellites. Further phases may offer OOS for LEO satellites and ADR55.

Restore-L USA SSL, NASA Unknown Launch planned mid-2020

Robotic servicing mission being developed by SSL for NASA. To be demonstrated on a LEO satellite owned by U.S. Government (likely the refuelling of Landsat-7).

Source: Research by SpaceTec Partners

Table 3.5: Overview of planned ADR/OOS missions worldwide (speculative)


JEM-EUSO / Mini-EUSO

Worldwide Mini-EUSO (ASI, Roscosmos), wider project encompasses 16 countries, 84 Institutes

Unknown Mini-EUSO launch Foreseen late 2018

Potential augmentation of mini-EUSO telescope on ISS via laser terminal

Brane Craft USA Aerospace Corporation $0.5M for further research (low TRL)

Unknown Uses resilient thin-film technologies to wrap around small debris and de-orbit it. Could potentially be used to remove small debris up to around 900g.

55 Interview with Effective Space’s managing Director


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Space Sweeper with Sling-Sat (4S)

USA University of Texas Unknown Preliminary studies Momentum-exchange for re-entry

Phoenix / Robotic Servicing of Geosynchronous Satellites (RSGS)

USA DARPA, Space Systems Loral (SSL)

USD 500 million56 Likely by 2020 OOS (military-funded) missions with possible ADR applications

Space Debris Elimination (SpaDE)

USA Raytheon BBN Technologies, University of Michigan

On hold / cancelled Preliminary studies Pulses of atmospheric gases fired from high-altitude balloon

Laser brooms Various Numerous in scientific literature, no concrete plans

Unknown Preliminary studies Ground-based laser systems

Source: Research by SpaceTec Partners

56 Interview with Effective Space’s managing Director


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Moreover, several documentation sources were identified and utilised relating to estimating the costs of tackling space debris, as outlined in the following table:

Table 3.6 - Documentary evidence of the costs of ADR missions

Document Description Key findings – costs

Analysing the Costs of Space Debris Removal in Basis of Three Kinds of Methods, Jialin Wen, Jinan University, China. International Journal of Economics and Finance; Vol. 9, No. 8; 2017, ISSN 1916-971X E-ISSN 1916-9728, July 2017.

• Discusses the costs of three common methods (1) ground-based laser removing, (2) water jet cutting and based laser removing, and (3) net-capture) for removing the debris. The laser removing method was found to be suitable for medium-sized debris with a diameter of less than 10cm, the water jet method is suitable for large-sized debris with the diameter within 10cm and 1400cm, and the net capture method is suitable for capturing super-sized debris with a diameter bigger than 1400cm.

• The cost of removing a unit volume of the debris was analysed.

• It was estimated that the costs of a space mission operating using the laser removal method would cost about 87.9 million USD/ year.

• The cost of implementing a mission using the water jet method would be around 300 million USD/ year. The costs of the net capture method were estimated at about 5 million USD/ attempt.

Cost analysis of active debris removal scenarios and system architectures, Toru Yamamoto, Japan Aerospace Exploration Agency, April 2017.

• Analysed a trade-off between various ADR scenarios to identify the lowest cost scenario.

• The purpose of the study was to find the optimal scenario by calculating the cost of removing one space debris in various ADR scenarios and comparing them with each other.

• Highly technical – difficult to surmise generalities.

Cost-estimation for the Active Debris Removal of Multiple Priority Targets, Conference Paper, August 2014, Vitali Brauna, E. Schulza, C. Wiedemanna, Institut fur Luft- und Raumfahrtsysteme, Technische Universitat Braunschweig , Hermann-Blenk-Str. 23, 38108 Braunschweig, Germany.

Builds on earlier research article57

• Describes an approach to cost modelling of single and multi-target ADR mission cost modelling.

• Developed a cost model for ADR which includes the initial costs of development, production, launch and operational costs, as well as the modelling of the propulsion system of the servicer.

• The paper notes that the selection of ADR targets is not an easy task. “Many studies come up with a priority ranking based on a combination of the object's mass and its collision risk, e.g. Liou (2011); Lewis et al. (2011)”.

• A single target mission (STM) may result in mission costs of about USD 160m, plus additional costs of about USD 400m. For multi target missions (MTMs), the resulting mission costs were determined as being higher than for STMs, with linearity depending on the number of removed targets per mission, with a minimum investment of USD 200m for two targets.

• The costs are also linked to the particular propulsion technologies utilised. Total mission costs, using an Electric Propulsion system, would be about USD 300m for ten targets, while a Chemical Propulsion system would cost about USD 500m for ten targets.

57 : Braun, V., Lupken, A., Flegel, S., Gelhaus, J., Kebschull, C., Wiedemann, C., Vorsmann, P., 2013. Active debris removal of multiple priority targets. Advances in Space Research 51 (9), 1638{1648.


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Document Description Key findings – costs

Study on ESA’s Clean Space Socio-economic impact assessment by Spacetec Partners (includes cost estimates on the costs of tackling space debris)

• The study is expected to be finalised in June 2019

• For confidentiality reasons, no figures could be disclosed at this stage.

• Nevertheless, the high-level order of magnitude of costs mentioned in the other studies (see same column for the above rows) were confirmed.

Source: Research by CSES.

The literature suggests that the costs of deploying ADR technologies will be dependent on different variables according to 1) the ADR mission model, 2) the type of propulsion system (e.g. electric, chemical propulsion system), and 3) the type of capturing system (e.g. robotic arm, net, etc.). Regarding the ADR mission model, the need to define mission scenarios to be applied has been highlighted, in particular, to establish whether a given mission involves a single-target ADR or a multi target mission (MTM), where more than one target is removed per launched servicer satellite. In order to obtain an estimate for the costs of an ADR mission, the complete lifecycle needs to be considered. In particular, the following costs need to be factored into an ADR mission:

• Research, development, test and evaluation (RDT&E) costs;

• Theoretical first unit (TFU) costs for the first flight-qualified unit;

• ADR mission launch costs;

• Operational costs.

A key finding from the Braun study58 was that the mission costs per kilogram of removed debris mass declines in instances where there are a high number of objects to be removed. If an ADR mission is targeting an increasing number of objects, “the costs decrease down to a level of about USD 10,000 per kg (CP) or about USD 5,500 per kg (EP) for high mass targets". The inverse relationship between the number of objects to be removed and the costs is shown in the figure below:

Figure 3.3: Costs of ADR missions and relationship with the number of removed objects/ mission

Source: Cost Estimation for the Active Debris Removal of Multiple Priority Targets, page 13.

58 Braun, Vitali & Schulz, Eugen & Wiedemann, Carsten. (2014). Cost Estimation for the Active Debris Removal of Multiple Priority Targets.


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The Japanese research paper59 on ADR costs explored the trade-off between different ADR scenarios. It defined a series of steps that should be undertaken to assess the costs for the removal of one piece of debris. The steps defined are:

• Step 1: Target Debris Data Preparation

• Step 2: Debris to Debris Orbit Transfer ΔV Computation

• Step 3: Tour Optimization (determining the order in which debris will be tackled following a logical orbit path)

• Step 4: Tour ΔV Computation

• Step 5: ADR Satellite Model Computation

• Step 6: ADR Satellite Cost Computation

• Step 7: ADR Campaign Cost Computation

A key finding was that the scenarios of the mothership architecture in which small satellites equipped with a hall thruster distributes EDT kits to the target debris were found to be the most cost-effective.

The overall findings in respect of costs of deploying ADR technologies as part of ADR missions are that:

• The costs associated with dedicated ADR missions are quite expensive, hence, a multi-target approach would be preferable than a single target. An alternative to this would be to use the same launch to put in orbit the replacement satellite and to remove the old one.

• The launch and operational costs of ADR missions vary considerably, depending on the propulsion technologies used, the proposed debris capture methods, and the size of debris to be removed.

• The costs of ADR missions were estimated in two of the studies reviewed.

• Mandatory requirement for mission owners and contractors to contribute funding towards the cost of future space debris removal missions in case of unsuccessful post-mission disposal measures or premature failure

In the following Figure, an overview of the estimated costs and benefits of ADR missions is provided. As detailed in existing literature, the actual costs will depend on the technologies deployed, the size of space debris being retrieved, and whether the mission has multiple targets or not.

59 Cost analysis of active debris removal scenarios and system architectures, Conference Paper, April 2017, Toru Yamamoto, Japan Aerospace Exploration Agency


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Figure 3.4: Assessment of the costs and benefits of ADR missions

Source: Qualitative assessment of magnitude of costs (see earlier above for quantitative costs data estimates). The costs of non-action should also be factored in, given the risks in undermining the achievement of key EU space policy objectives relating to maintaining safe and independent access to space, and the potential loss of the socio-economic benefits of the development of the downstream which could be compromised by space debris. Indirect benefits, such as making use of existing spare capacity in launchers to launch secondary payloads through ADR missions, have also been considered.

3.2.5 Advantages and disadvantages

The main advantage of a mandatory criterion relating to Space Debris Mitigation is that it would help to underline Europe’s commitment to tackling space debris and contribute to the preservation of the space environment, which the problem definition showed is a major problem.

As will be shown in the feasibility assessment (see tables in landscape), there are potential benefits for the European space industry in terms of becoming a market leader in the development of effective mitigation approaches by industry to ensure that satellites are ‘removable” in case their planned EOL disposal is not successful. Likewise, ADR remediation technologies could in future be deployed by mission owners, although as noted in the previous section on costs and benefits, the costs associated with ADR missions are expensive. This could contribute to strengthening industrial competitiveness. However, there remain uncertainties regarding the timing and readiness of ADR technologies to be deployed to ensure effective remediation.

A case study to examine the possible future deployment of ADR missions by ESA is now provided. The extent to which technical progress is being made towards more effective mitigation and remediation

Substantive costs of developing technologies and to

perform the first in orbit validation (investment in

R&D&I).

High

3

Recurring costsMarginal/

significant

2.5

Cost of removal (as a function of the above) High

3

Increased cost of goods/services supplied Marginal

1

Potential to utilise technology to enhance

competitive position in global space markets, e.g.

to address the nascent On Orbit Service market

High

3

Contribute to sustainability of space activities Medium

1.5

Contribute to foster space industry competitiveness

and long-term sustainability of the space economyHigh

3

Reduced risk of space debris creation Medium/

Significant

2.5

Ensure ontinuity of EUSP services to society Medium

2

Potential size of the cost or benefit

Costs

For servicing

industry

For the

procurement

authority/

mission owner

Benefits

For servicing

industry

For the

procurement

authority/

mission owner


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approaches in respect of tackling the problem of debris removal through studies and investment R&D&I is considered in the case:

Case Study 3-4 – Case study: ADR-related considerations in the Copernicus Space Component

• The use of an ADR / SpaceTug mission to deorbit the Sentinel satellites could allow greater flexibility for mission extensions and for the deorbiting of failed spacecraft:

• The ADR spacecraft could be launched as secondary payload during the launch of the replacement Sentinel spacecraft. This would use the spare capacity of e.g. the Vega-C launcher. Note that this is expected to be around 500-600 kg spare per launch.

▪ Note: the Vega-C is estimated to launch between 2 – 2.2 tonnes to the Sentinel orbits. A standard Sentinel is approx. 1 – 1.4 tonne (including 150 kg propellant).

• Such ADR spacecraft will be able to use more modern equipment, and will not need to ensure survivability for long durations in the space environment.

• It is estimated that the availability of a suitable ADR for Sentinels could allow almost doubling the mission lifetime (from 7 years to e.g. 12 years), depending on the health of other systems

• The ability to free the Sentinel orbits of failed spacecraft is also a must for ensuring the long-term sustainability of these orbits (and thus of the services themselves).

▪ The Sentinel family has redundancy within the constellation to avoid disruption during the replacement / downtime of any one satellite, but this only works if the orbits remain useable

• It can be expected that an even greater driver of this comes from the LEO mega- constellations. They have the same need to ensure that their orbits remain free of failed spacecraft. This is particularly pressing for those constellations with high enough orbits such that the orbits will not decay naturally within 25 years.

• Copernicus aims to enable ADR / OOS / SpaceTug missions via the creation of a standardised interface for such operations on all future Sentinel spacecraft.

▪ Three studies will soon be launched to the main European satellite primes to develop concepts for this. These separate studies will then be harmonised to form one European standard.

▪ The main interface point will be via mechanical connection to the launch adapter ring. ▪ The interface specification will likely include requirements to avoid e.g. unintentional blinding

of optical systems. ▪ Redundant aids for image processing / target approach will also be considered, such as optical

and magnetic bearings. ▪ An Interface Control Document (ICD) for this specification should be available within 1 – 1.5

years. ▪ This ICD is only intended initially for Copernicus use; however, it may become a standard for

other ESA and non-ESA projects in the future.

• Further discussions for Sentinel spacecraft are planned for the coming weeks with ESA staff. Interviews with representatives from Thales and Airbus could also help to understand the impacts on EO missions.

Source: Analysis by SpaceTec partners based on Intervention by G. Levrini – ESA Programme Manager of Copernicus Space Component at ESA’s CleanSpace industry days – 2018.


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3.2.6 Feasibility assessment

In the table below, an assessment of the feasibility, and the costs and benefits associated with the future implementation of particular sub-scenarios is provided.

Table 3.7 - Assessment of the feasibility of different sub-scenarios relating to space debris

Sub-scenarios Feasibility Costs Benefits

Mandatory compliance with ESA’s Space Debris Mitigation Guidelines

• Feasible since ESA’s guidelines are already being used for all ESA space missions and Copernicus.

• Results from benchmarking show scenario would be in accordance with developments internationally: ▪ Space debris mitigation guidelines

developed by NASA. ▪ international guidelines, since the

IADC has also developed voluntary guidelines.

• Similar guidelines have already been made mandatory at national level (e.g. French national space agency).

• Mitigation measures are already on the agenda of all relevant stakeholders (including contracting authorities, policy makers, industry associations and individual firms).

• ESA’s mitigation guidelines could therefore be made mandatory and extended to cover all the EUSP.

• Research has already been undertaken by ESA to facilitate implementation of the Space Debris Mitigation requirements using Design for Demise (D4D) principles.

• Satellite manufacturers need to design alternatives so that satellites “disintegrate” (demise) during re-entry.

• Some costs associated with making compliance with the ESA clean space mitigation guidelines mandatory.

• However, would be somewhat mitigated by fact that many contractors are already either compliant with, or at least aware of the existing guidelines.

• Contractors should from a risk management perspective already be factoring in space debris risk mitigation into the design of satellites and planning of space missions.

• Space debris puts space-based services on earth at risk, such as emergency management data, security services, navigational services, data used for mobile phone-based services, etc.

• Reducing the amount of debris through more systematic implementation of ESA’s guidelines could lead to benefits associated with preventing damage to continuity in service provision. This would prevent the downstream economic benefits associated with take-up of navigational and EO services by downstream users (DU) from being adversely impacted.

Indicators: The socio-economic impacts of the reduced risk of space debris could be quantified by measuring the:

• Computed value that could be depleted if a satellite is impacted by debris before end of mission, based on the valuation of each satellite revenue per year according to i) its mission ii) its instruments, performance or specificities.

• Increased turnover and growth of the European industry associated to the new SDM technologies market (E.g. demisable systems, EOL disposal systems, etc.).


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Mandatory requirement for contractors to make their satellites ‘removable” in case their planned EOL disposal is not successful

• ESA is already giving consideration to requiring contractors’ satellites to more easily ‘removable” once they have to come the end of their operational lifetime (as a remediation measure in case of unsuccessful disposal).

• ESA notes that even if spacecraft are designed to achieve an End-of-Life (EOL) compliance with the Space Debris Mitigation (SDM) requirements, “a failure of the spacecraft, or other unforeseen events, may lead to the satellite becoming non-operational in the protected regions (this is even reflected in the SDM requirement, which calls for a reliability of 90%). Therefore, such a failed satellite may require active debris removal (ADR)”.

• Primes are already planning to ensure that their satellites can be safely and more easily graveyarded and de-orbited by mission operators. Designing in such considerations during the satellite design process would be in their interest, given the potential to minimise the risk of costly remediation measures linked to debris removal (e.g.in case of unexpected collisions or loss of contact with the satellites).

• Such a requirement could therefore be feasible.

• However, presently, the requirement for making the satellites removable is not mandatory, not even in ESA’s policies.

• There is a difference between the costs of making the satellite removable (design for removal) and the actual mission of removing the satellite.

• The substantive compliance costs of designing satellites differently would be high (if a manufacturer does not yet have the capabilities to offer mission owners such features.

• However, the costs would be considerably mitigated due to the fact that most of these costs are BAU costs (i.e. contractors are having to design satellites in a way that takes into consideration end-of-life disposal as part of their existing contractual obligations.

• Avoid further proliferation of space debris

• Protect important orbits needed to maintain Europe’s strategic space independence and to retain potential socio-economic benefits of the diverse downstream uses of space EO data and navigational services.

• Targeting large space debris for debris removal missions could reduce the risk of unexpected interruptions in the provision of operational services upon which downstream users are dependent (e.g. mobile phone data services, meteorological information and services).

• Enable the European space industry (esp. manufacturers of satellites and launchers) to take a competitive lead globally in the development, testing, deployment and the potential commercialisation in future of ADR technologies and On Orbit servicing60.

Note - non-European, international satellite manufacturers do not presently appear to have the technical capabilities of deploying ADR technologies.

60 https://spacenews.com/on-orbit-satellite-servicing-the-next-big-thing-in-space/

https://spacenews.com/on-orbit-satellite-servicing-the-next-big-thing-in-space/


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• However, Copernicus Sentinels are being designed for removal and to be compliant with the SDM guidelines.

Mandatory requirement for mission owners and contractors to contribute funding towards the cost of future space debris removal missions in case of unsuccessful post-mission disposal measures

• The ADR technologies required and systems and subsystems are still under development and still need to undergo further extensive testing, with many technical challenges identified to their future deployment.

• Although debris removal technologies are under development through research projects (e.g. EU’s RemoveDEBRIS – Operation space clean-up under H2020,

ESA’s e-De-orbit)61, these remain at

demonstration phase.

• Such technologies could be deployed from 2023-2025, but given technical challenges and the need for these technologies to be fully proven, it may not be possible to deploy them until mid-way through the next MFF or even in the MFF beyond that.

• Since there is material uncertainty as to whether individual primes will have the technical capabilities of deploying satellites with operational ADR technologies to address any space debris issues during the operation of future generations of satellites at this stage, an alternative could be to require contractors to make a contribution to investing in the R&D&I needed prior to future ESA-led

• The R&D and other costs of a dedicated space debris removal mission could be significant62, given that the technologies are nascent and as yet unproven (although they are in the process of being qualified, if ESA’s mission is approved).

• The costs could be exacerbated for mission owners due to the uncertainty of being able to deploy ADR technologies within a particular timeframe.

• ESA’s recent proposed transition of space debris removal missions alone to a combination of debris removal and in-orbit servicing missions could however help to make such missions more cost-effective.

• Cost drivers would be derived from the mission requirements for ADR, and would depend on the type of debris being removed and its size.

• Costs will vary depending on the size of debris to be removed. Previous research63 found that "the laser removing method is suitable for medium-sized debris with the diameter less than 10cm, the water jet method is suitable for large-sized debris with the diameter within 10cm and 1400cm, the net-capture

• A cost-benefit sharing approach would promote closer public-private partnership working on challenges facing all European space stakeholders to the benefit of all.

• Reducing the amount of large space debris could reduce the risk of unexpected interruptions in the provision of operational services upon which downstream users are dependent (e.g. mobile phone data services, meteorological information and services).

• Taking responsibility of owned debris can reinforce Europe as a leading, yet environmental conscious, space fairing power and lead by example for other nations to follow.

61 http://blogs.esa.int/cleanspace/category/e-deorbit/ 62 Cost estimation of active debris removal, 2014, Eugen Schulz, Vitali Braun and Carsten Wiedemann 63 Analyzing Costs of Space Debris Removal in Basis of Three Kinds of Methods. July 2017

http://blogs.esa.int/cleanspace/category/e-deorbit/


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space debris removal missions being feasible, such e-Deorbit.

• As with the previous sub-scenario, there are concerns about when ADR technologies will be sufficiently proven to be deployed and the costs involved.

• This will depend by ESA’s Clean Space proposed mission at the next Ministerial Council being approved (November, 2019).

method is suitable for super-large-sized debris with diameter bigger than 1400cm".


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3.3 Scenario 2 - An award criterion for rewarding minor innovations by companies

3.3.1 Problem definition

A problem definition is first provided, which also summarises the EU policy and legal background and the context.

The OECD’s Frascati Manual, the internationally-recognised methodology for defining and measuring scientific, technological and innovation activities, defines innovation as the introduction of a new or significantly improved product, process, organisational method, or marketing method by an enterprise. Innovation activities include the acquisition of machinery, equipment, buildings, software, and licenses; engineering and development work, feasibility studies, design, training, R&D and marketing when they are specifically undertaken to develop and/or implement a product or process innovation. This also includes all types of R&D to create new knowledge or solve scientific or technical problems. This definition, which is also used by the European Commission in its Community Innovation Survey, indicates that innovation is a broad concept that can take many specific forms. A generally accepted distinction is between:

• Product innovation: the market introduction of a new or significantly improved good or service with respect to its capabilities, user friendliness, components or sub-systems;

• Process innovation: the implementation of a new or significantly improved production process, distribution method, or supporting activity;

• Organisational innovation: a new organisational method in the enterprise’s business practices (including knowledge management), workplace organisation or external relations that has not been previously used by the enterprise.

• Marketing innovation: the implementation of a new marketing concept or strategy (e.g. changes to the aesthetic design or packaging of a good or service, new techniques for product promotion or placement, etc.) that differs significantly from any marketing methods preciously used by the enterprise.

In turn, any of the above-mentioned types of innovation could be distinguished between radical/disruptive innovation, or incremental/sustaining innovation. Radical innovation is when the newly developed product, service, process or strategy makes a significant impact by completely replacing existing technologies or methods. It generally requires a significant investment of time and resources, and is associated with a certain level of risk. Conversely, incremental innovation implies a series of small improvements or upgrades to existing products, services, processes or methods. The changes implemented are usually focused on improving performance, operational efficiency, productivity and competitive differentiation. It is regularly used by firms to maintain or improve their competitive position over time.

The space sector is by its nature strongly innovation-dependent. Innovation has always been central to space activities, leading to the development of new technologies, often transferred to non-space application domains, and to the generation of new start-up companies. Both radical and incremental innovation activities have taken place in industry, academia and agencies.

As a high-tech R&D domain and through the economic exploitation of its results, space contributes to attaining the Europe 2020 strategic goals for growth and employment by providing enabling technologies and services for the emerging European knowledge society. The 2016 policy communication “A Space Strategy for Europe”64 points out the central importance of the European space economy to stimulating innovation, growth and competitiveness in the EU.

64 COM(2016) 705 final.

https://searchcio.techtarget.com/definition/competitive-differentiation


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Under Article 67 (‘Contract award criteria’) of EU Public Procurement Directive (2014/24/EU), it is stated that contracting authorities shall base the award of public contracts on ‘the most economically advantageous tender’, identified using a cost-effectiveness approach. Such an approach may include ‘the best price-quality ratio’ assessed on the basis of selected criteria, including qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question. The EU legal basis therefore provides the scope for including award criteria relating to the innovative characteristics of the good/service to be supplied.

3.3.2 Baseline situation

As discussed in other sections of this report, the European Commission and ESA has several programmes in place to support the development of breakthrough innovation, by supporting exploratory early-stage research and prototype developments in the upstream space sector, either through grants or procurement schemes. Yet, as complex as space technologies are, the implementation of EUSP also relies on high-performing, proven technologies, which limits the scope to integrate cutting-edge new innovations and technologies emerging from R&D activities.

Some insights about how varied the procurement of a research organisation can be, in terms of the innovation level of the procured products and services, can be gathered from a recent study on CERN, the European Organisation for Nuclear Research.65 A survey to 669 CERN suppliers shows that the majority of firms participating in the construction of the Large Hadron Collider supplied products and services which involved at least some kind of innovation. In most cases, this innovation was quite radical in nature, either requiring ad hoc intensive R&D efforts and the development of completely new technologies, due to the technical challenges posed by the construction of the largest and most powerful accelerator in the world. Another 35% of firms declared having received orders for products or services that had been previously developed by the firm, but for which some adaptation was made in order to customise them appropriately for usage by CERN.

Similarly to the case of the CERN particle accelerator, the interviews carried out with space industry stakeholders confirmed that not all products and technologies supplied to the ESA or the Commission for the EUSP require important R&D efforts. A paper by Summerer, analysing some specific conditions for innovation in the European space sector,66 argues that the space sector has generated radical and disruptive innovation during the initial decades of its existence. However, during the previous two-three decades, there has been a shift towards incremental innovation, characterised by small or relatively minor changes and improvements that do not alter in a substantial way the basic underlying concepts, but aim to optimise products and services.

The European Commission’s Communication “Renewed agenda for Research and Innovation: Europe's chance to shape the future” (15 May 2018) acknowledges that Europe is relatively strong in implementing incremental innovation, by adding or sustaining value for existing products, services and processes in a variety of sectors, including space, aeronautics, pharmaceuticals, electronics, renewable energy, bio-based industries and advanced manufacturing.

Encouraging innovation in all its forms is recognised by NASA as an important goal of its procurement activity. To this end, NASA foresees the possibility of including a specific award criterion in procurement tenders to encourage suppliers to propose minor innovative solutions. These could involve either product or organisational innovation or both, aiming, for instance, to increase operational efficiency or to improve cost-effectiveness. Such criteria are can be included in the procurement on a case-by-case basis. In some cases, compliance with strict technical requirements is a priority and any deviation from these requirements is not allowed. In other cases, NASA may prefer

65 Florio, M., F. Giffoni, A. Giunta and E. Sirtori (2018), “Big science, learning and innovation: evidence from CERN procurement”, Industrial and Corporate Change, Vol.27, 5: 915-936. 66 Summerer L. (2011) "Signs of Potentially Disruptive Innovation in the Space Sector", International Journal of Innovation Science, Vol. 3 Issue: 3, pp.127-140, https://doi.org/10.1260/1757-2223.3.3.127.

https://www.emeraldinsight.com/author/Summerer%2C+Leopold


https://doi.org/10.1260/1757-2223.3.3.127


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to use less expensive off-the-shelf products, thus prioritising financial considerations over innovation and creativity.

This type of criterion reflects NASA’s openness to possible proposals coming from industry. The NASA Procurement Tenets,67 a set of principles defining NASA’s way of doing business with the objective of maximizing NASA's return on investment, requires NASA to “maintain a close working relationship with industry in order to be successful”. If the necessity is recognised to put “a strong focus on performance outcomes, acquiring industry input regarding all requirements, and terms and conditions of planned contracts”, at the same time it is considered just as important to allow industry “to propose the best solution […] to achieve these desired outcomes. Industry’s recommended changes to NASA’s requirements shall be analysed, reconciled, and accepted when possible by the procurement and program/project offices”.

In procurement activities taking place through the EUSP incentive award criteria for minor innovations, similar to those used by NASA, have not been used so far. Because of the high technological nature of the space industry, very strict technical requirements are imposed on supplier firms to ensure proven long-time reliability, high quality and cost effectiveness. In the EUSP, award criteria are attributed to compliance with the technical requirements, but no premium is generally assigned to proposals by applicant firms for minor innovation. Technical requirements are commonly defined strictly and not usually allow for possible deviations, or proposal for changes. In fact, deviating from the technical requirements could lead to a prospective contractor being given a low score, thereby reducing the possibility of being awarded the contract.

However, even if full compliance with the technical requirements set out in the Tender Specifications is a must, it is possible that the applicant firms may propose additional services or alternative optional solutions, in order to distinguish themselves from competitors, even if no explicit award criterion is set. According to the interviews carried out, it seems that SMEs are especially keen to go beyond the minimum technical requirements, as a way of demonstrating the competitive advantages of their bid to the contracting authority.

As testified by some interviewees, even if the supplier firm is selected purely on the basis of the award criteria specified in the tender, some minor changes to the original request can occur before contract signature. In fact, once the contract is signed, the firm has the opportunity to enter into a more technical dialogue with the contracting authority and to explain the reasons why a slightly different solution is regarded as being more effective or efficient than the one described in the Tender Specifications. As a result of this dialogue, the procurement authority may decide to accept the marginally different technical solution proposed by the firm. Interview feedback found that dialogue is a common feature of EU space procurement leading to a process of negotiation regarding the optimisation of technical solutions, both in procurements led by ESA and by the Commission services. Such negotiations are especially applicable under certain types of procurement, such as the negotiated procedure (which may take place with, or without prior publication of a contract notice), and the “competitive dialogue”. Whilst these procedures offer scope to introduce technical innovations following the submission of a tender, however, the NASA approach rewards tenderers that propose how incremental innovations will be embedded in contract delivery during the tendering procedure i.e. by allocating additional award criteria to tenderers.

Minor innovations could be proposed both relating to the features of the products to be supplied, in order to increase their performance or efficiency, but also on some organisational aspects relating to the contract, ultimately aimed at reducing administrative burden on industry, or allowing more flexibility in project implementation, while still ensuring full compliance with the general objectives of the contract. An example of this was provided by a company which introduced in the proposal’s budget an additional fixed cost item, which was supposed to cover any additional minor requirements

67 https://prod.nais.nasa.gov/pub/pub_library/proc_tenets.pdf.

https://prod.nais.nasa.gov/pub/pub_library/proc_tenets.pdf


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that could have come from the contracting agency during contract execution. The value of this contingency budget was estimated by the applicant firm on the basis of previous experience in delivering similar projects. This solution was regarded by the firm as being more flexible and less administratively cumbersome than the alternative allowed by the contracting authority, i.e. to include and describe in the proposal a so-called “Flexibility Work Package” covering any possible additional requirements beyond the specific procurement requirements to allow for ad hoc requests from the contracting authority.

Therefore, even if no explicit award criteria are generally used by European procurement authorities to stimulate minor innovative ideas, some firms already propose innovative approaches in order to distinguish themselves from other competitors and / or to propose solutions that are considered to be more cost-effective. However, firms would be much more likely to propose flexible, more innovative solutions if minor innovations were included as an explicit award criterion.


Introducing an award criterion for minor innovations could produce manifold benefits for industry, the contracting authority and even the EU as a whole. Even if no quantitative estimates can be provided at this stage, a more qualitative assessment suggests that the benefits are likely to exceed the additional costs.

As summarised in the table below, the inclusion of such an award criterion would bring the most significant benefits to the industry, particularly SMEs. It would encourage firms’ creativity and allow them to better distinguish themselves from competitors, and to demonstrate to the contracting authority their full range of competences and experience in deploying innovative solutions during contract implementation. This could in turn bring them more visibility, which could translate into a better market reputation and ultimately, improve their competitiveness. Since SMEs are more flexible and agile than larger enterprises, the introduction of such a criterion may especially favour SMEs, by encouraging them to develop and implement smart ideas leading to operational efficiency or better products/services. At the same time, primes could also come up with innovative means of delivering contracts, were they to be incentivised to do so.

On the EU’s side, different kinds of benefits would emerge from the implementation of innovative solutions proposed by suppliers. These benefits may derive from innovations in the product/service supplied, e.g. improved performance, reliability, cost-effectiveness. They could also relate to organisational innovation. Examples may include solutions to ensure a smoother contract implementation, reduce/mitigate the risks, reinforce the accounting system (for instance, an innovative proposal for monitoring the number and profile of people involved in the contract execution), new mechanisms to ensure knowledge transfer to subcontracted SMEs, etc.

Another important benefit would be the potential increased competition among firms, which could also support the emergence of new market players. Even if a limited number of points were to be assigned to the new award criterion, firms would still compete to get those points. SMEs and new market entrants might be expected to make a significant effort to secure additional points.

By fostering innovation and reinforcing competitiveness, minor innovations could also contribute to reinforcing the position of the European space industry in the international (extra-EU) market. However, the size of this benefit for the industry could be quite limited, at least as compared to other benefits, and it would strictly depend on the specific form of innovation developed.

On the cost side, some firms may experience a loss of revenue if they are unable to rise to the challenge and address increased competition by becoming more innovative, but the financial costs and efforts for industry to come up with innovative solutions of any kind are not expected to be significant. Such minor innovations, by definition, do not require any R&D activities, but more often derive from know-how developed through daily business activities.


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For the procurement authority, this type of criterion could potentially add some costs to the overall procurement process, which however can be limited if the criterion is adequately designed. For instance, by attributing a limited number of points to this award criterion and making sure that other requirements (e.g. technical and/or financial criteria) provide the true discriminators for a best value award decision, it could reduce the risk of non-awarded firms contesting the award decision. The number of points for the criterion on minor innovations should provide an incentive to firms, without outweighing the importance of other standard requirements relating to the object of procurement. A figure of between 5% and 10% might be appropriate.

Some industry players might argue that since innovative products are more expensive than off-the-shelf goods, and this should be somewhat reflected in the maximum budget allowed by the tender. However, the research found that this criterion is unlikely to significantly raise the cost of contracts’ financial value awarded under the EUSP. In fact, by covering only proposals for minor innovations, which firms are likely to be already able to provide, due to previous experience and ‘learning by doing’ through delivery of previous contracts, in principle, the additional costs would be marginal.

Figure 3.5: Expected costs and benefits for a voluntary award criterion on minor innovation

Source: Assessment by CSIL

Higher competition on the tender Medium2

Possible cost of developing the proposed minor

innovation

Marginal/

medium 1.5

Increased cost of goods/services suppliedMarginal/

medium 1.5

Possible longer time for awarding the contract Marginal 1Cost and time to reinforce the skills in the procurement

evaluation board in order to properly evaluate the

tender applications

Marginal

1

Higher risk of opposition/appeal by non-awarded firms Marginal1

Increased credibility and trustworthiness as supplier Significant3

Increased market visibility, reputation and

competitivenessSignificant

3

Reinforced creativity and innovative spirit Medium 2Business development (including with spin-off

generation), if the firm decides to further invest in the

innovative solution proposed

Medium

2

Reduced production cost, if innovation improves

efficiency or improves the production process

Marginal/

medium 1.5

Increased market competition, with emergence of new

players

Medium/

significant 2.5

Improved quality/reliability of products/services

suppliedMedium

2

Improved efficiency or cost reduction Medium 2

Improved contract management or organisational issues Medium 2Other benefits deriving from innovation, depending on

which specific innovative feature is proposed by the

supplier

Medium

2Reinforced position of EU industry in the international

market

Marginal/

medium 1.5


(marginal, medium, significant)

for the industry

Benefits

for the

procurement

authority / EU

Costs

for the

procurement

authority

for the industry


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Additional time and cost for the contracting authorities are also expected to be marginal. Actually, it is considered that the persons in charge of evaluating the compliance with the award criteria would be able to properly compare the proposals received so as to be able to assess the number of points to be attributed. At the tender evaluation stage, the evaluation board would have to judge on the value added by the proposed innovation. The more the award criterion can be associated with standard and clearly defined evaluation criteria, the easier and less controversial the award decision would be.

In case a more technical assessment is needed to properly assess the feasibility or implications of the proposed minor innovation(s), the evaluation board could rely on external experts, a practice that is already in place in the European procurement process. Similar to current practice at NASA, the procurement team should tailor the size of the evaluation team and the factors used in the contract award selection process to the type and complexity of the technical requirements.


As previously mentioned, an award criterion for minor innovation, attributing some points (5-10%) to firms that make some particularly interesting proposals for minor product, operational or organisation innovation, could have some advantages for SMEs and new market entrants, which are more likely to be characterised by their dynamism and flexibility, and more prone to developing informal forms of knowledge (know-how). By allowing such firms to be rewarded with a few points for their creative ideas, SMEs would have a greater possibility of successfully competing with primes and long-established companies. Notwithstanding, the possibility of non-primes being awarded large-scale upstream infrastructure contracts is likely to continue to be constrained by other factors, such as the fact that there are only a few firms in Europe able to construct large-scale satellites suitable for the provision of EO and navigational services. The award criterion for minor innovation could also be introduced for this kind of contracts, as primes may want to demonstrate their capacity to innovate and to be creative, if sufficiently incentivised in the award points to do so.

A possible disadvantage of introducing such an optional criterion would be related to the difficulty of deciding in which types of procurement it could be relevant to use it. Since space activities are naturally high-risk endeavours, with limited opportunities to correct any technical errors after launch, a risk-adverse culture is pervasive among manufacturers and operators, leaving limited scope for new innovation unless particular technologies are adequately not strictly needed for mission success, and leading to generally strict and conservative technical requirements. Such a risk-conscience mindset may have acted in the past as a strong inhibitor against new and unproven approaches and could have limited new ideas which typically come from new entrant firms. However, as argued by Summerer (2011), risk aversion could act in the opposite direction, by preferring incremental minor changes at subsystem level to substantial modifications. An award criterion to incentivise minor innovation could therefore be particularly appropriate to encourage the different stakeholders to adopt a more flexible approach, without compromising safety and performance standards.

Like NASA, the EU procurement authorities would have the task of deciding, on a case-by-case basis, when such an optional award criterion should be utilised, along with other technical and financial requirements. If a more gradual approach is to be adopted, tenders for off-the-shelf products seem particularly suitable for testing the use of such an award criterion. These are generally standard products, for which no customisation and qualification effort is required, but where some minor improvements could be easily suggested by the suppliers. Another possible domain of application could be electronic components, which are not particularly complex technologies but which allow room for experimenting with different approaches and variants. Yet, nothing would prevent from introducing an award criterion to minor innovations also in more complex and larger contracts.

In general, the procurement authority should consider including such a criterion in individual procurements within the EUSP as optional and part of a toolbox to help embed innovation. This criterion should be included when:



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• deemed useful to further discriminate among the proposals received, although it should only receive a small number of award points (5-10%), since other technical criteria relating to the quality and appropriateness of technical solutions should be the main determinants in points terms for the ultimate awarding decision;

• the nature of the specific procurement in question allows for some flexibility in delivering certain aspects of the contract (for instance, in respect of project management, organisational matters or even technical issues), without this flexibility negatively affecting the performance and reliability of the service/product/technology to supply, or putting additional risks on their use.


To summarise, the possibility of envisaging an optional award criterion which attributes a limited number of points (maximum 10) to proposals that propose different means of integrating minor innovations on an incremental basis in the new MFF is considered as being legally and technically feasible. Such innovations could be of any kind (e.g. product or organisational).

Prospective contractors would still of course need to fully comply with the technical and financial requirements set out in the tender specifications. The benefits of this approach could be significant, particularly for smaller firms and some market segments, where the technical requirements are less strict and there is some scope for experimentation. In contrast, the incremental costs for industry are expected to be minimal.

Due caution should be exercised when deciding whether this award criterion should be included in a specific tendering exercise. In principle, it could be applied to the procurement of the whole space sector, from the ground segment (development of ground stations, mechanical and electrical ground support equipment, communication networks, etc.), the services segment (teleport services, satellite broadband services, risk management services, AIS services, etc.) and the space segment. However, the inclusion of this award criterion should be optional and considered on a tender by tender basis, depending on which types of products and services are being procured.

No significant changes in the currently existing procurement process and governance system would be needed from the introduction of an optional award criterion for minor innovations. The contracting authority would retain responsibility to properly define the criterion, to decide on its application and to evaluate it, in a similar way than for technical criteria. Moreover, since this criterion can be defined in relatively broad, qualitative and not technical terms, there would be no need to necessarily involve experts with specific skills in the procurement design and evaluation process. In some instances, the European Commission and ESA could benefit from an exchange of views regarding the value of the specific innovative solutions proposed by the firms. In a similar vein, contracting authorities in Europe (e.g. ESA, DG GROW, GNSS Agency) could draw on some ideas generated and lessons learned from the NASA experience in this context.

3.4 Scenario 3 – Different mechanisms to promoting innovation adoption in the upstream space sector.

3.4.1 Problem definition

The research found evidence of a gap between the early stages of development of the EUSP requiring fundamental research, which includes inputs into space engineering (Phases 0, A and B), and the need for applied research to feed into the pre-operational development phase, especially relating to research activities with higher TRL levels.

There is arguably a need to bridge the gap between more fundamental research being undertaken and conventional procurement within the EUSP. Since the EUSP provides funding to procure operational services, Galileo, Egnos and Copernicus are necessarily dependent on procuring reliable and high-performing upstream infrastructure. At the same time, it is important not to lose sight of the


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need for innovation and new technologies to be firmly embedded within the EUSP, which requires investment in R&D&I prior to fully-fledged operational procurement so as to ensure that new technologies can be developed and tested, demonstrated, proven up and qualified.

The different developmental phases in space engineering first need to be explained in order to illustrate the relevant phases of Galileo and EGNOS, as well as the Copernicus programme that benefit from different research programmes which help to ensure that innovation is integrated into the technologies that underpin the EUSP. These include, for instance fundamental research by ESA and some national space agencies, and direct contract R&D funded under H2020 Space. The different phases of space engineering are summarised below (it should be noted that Phases 0, A and B are those where there is greatest need for innovation and early-stage research and development activities):

Table 3.8 - Phases in space engineering

Phases in space engineering

0 - Mission analysis/needs analysis

A - feasibility stage

B - preliminary design

C - detailed design

D - qualification and production

3.4.2 Sub-scenarios

There are several mechanisms to embed innovation in the EUSP, especially in the early space engineering phases 0, A and B within each programme. A possible gap may exist and need to be addressed between research taking place at lower TRLs, and the jump to the needs of an operational programme, since there does not presently appear to be scope to support larger-scale demonstration projects to develop capacities at TRL 6 (technology demonstration), TRL 7 (system/ subsystem development) and TRL8 (system test, launch and operations).

Some instruments are already being used to foster innovation (see below), whereas other mechanisms to embed innovation may require new instruments, or the streamlining of existing activities to ensure that activities can take place at a higher TRL level. Examples of different means via which innovation is already being fed into the development of the EUSP are now provided:

• Fundamental research being undertaken through ESA’s research programmes, and the contributions being made by national space agencies involved in these programmes. Such research activities (concentrated on TRLs 1-4) already feed into the early-stage development of the EUSP.

• Support for research and demonstration activities procured through contract R&D funded through H2020 Space. In 2014-2020, expenditure already amounts to EUR 150m – 180 million. Contract R&D therefore plays a significant role in feeding into the early-stage development of the EUSP. The TRL level is typically 1-4, but research at TRL 5 and 6 may also be funded.

Additional measures could be taken to integrate innovation into the EUSP, for example through:

• Development and implementation of a ‘first contract’ approach (also known as a demonstration contract), which could take place at a higher TRL level (e.g. TRL 6, 7 and 8). This may involve more applied testing and proving up of new technologies through research and demonstration activities, namely TRLs 6-8. Such an approach could be funded in the new MFF via different funding mechanisms, such as:


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• Pre-commercial Procurement (PCP)68 - a new scheme, operating separately from the EUSP, designed to fill a gap between early-stage research at TRLs 1-4, and the need to procure operational services.

• Horizon Europe Space - subject to demonstration projects being eligible for funding support in the new period up to TRLs 6-8.

A new demonstration contract to develop innovative technical capacities in particular areas could be structured on the Commercial Orbital Transportation Services (COTS) Programme run by NASA. A case study based on this initiative is provided later in this section.

3.4.3 Baseline situation

The baseline situation is now considered, in particular, the extent to which – and how - different mechanisms to procure and embed innovation in the EUSP are being used to date.

3.4.3.1 ESA research programmes

There are a number of ESA research programmes which support fundamental research, as well as the ESA science programme. In addition, ESA undertakes innovative research and demonstration activities, for instances in the field of clean space (although there is no dedicated funding programme yet, and research in this field comes out of ESA’s general budget). This has generated useful outcomes that could help to promote innovation, such as for instance, the development of a new standard relating to satellite removal.

ESA also operates a number of missions, both operational and scientific, including some missions implemented in conjunction with national space agencies (e.g. the French CNES, the Italian ASI Agenzia Spaziale Italiana, and the German DLR). Therefore, lessons learned from the implementation of ESA’s missions of scientific relevance can be fed into the EUSP’s early phases of development.

The EUSP already benefits from the fundamental research carried out by ESA and NSAs, which generates scientific expertise and scientific results. The level of funding for ESA’s programmes is significant and generally exceeds that available through H2020 Space for contract R&D and demonstration activities.

3.4.3.2 H2020 Space – procurement of contract R&D

Direct R&D procurement for contract research is funded through Horizon 2020 Space. Overall, the R&D activities delegated to ESA are much more important and amount roughly to 150-180 MEUR from 2015 to 2020.

Through H2020 Space, contract R&D provides a mechanism for supporting early-stage research and demonstration activities. This fosters innovation and helps to accelerate the development, proving-up and adoption of new technologies, innovations and testing of ideas. H2020 Space allows for the direct procurement of R&D&I and of any components needed. This happens considerably before the procurements of large-scale satellite infrastructure have been commissioned. Innovation can therefore be promoted long before larger-scale procurements take place within the EUSP to procure upstream infrastructures. It was stressed by interviewees from contracting authorities that it would be difficult for innovation to be promoted further within the core EUSP themselves, given the need for reliable operational services, and for data to be procured. However, the FPs provide a mechanism through which innovation can be fostered.

One of the objectives of H2020 Space is "Enabling European competitiveness, non-dependence and fostering innovation of the European space sector". The programme contributes to a number of

68 PCP involves the purchase of research (results) by a contracting authority with the objective of stimulating innovation that the contracting authority or some other party will need or may benefit from as soon as goods or services (that by definition are not currently available) are developed based on those research results.


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building blocks which collectively contribute to enhancing industrial competitiveness in the European space sector. These building blocks are: (1) the evolution of EGNSS (including infrastructure, mission and services), (2) support for Galileo & EGNOS applications and infrastructure and (3) the protection of European Space Assets. Through the second of these building blocks, H2020 Space has provided an opportunity to procure early-stage research which feeds into the early-stage development of satellite navigation applications in the Galileo and EGNOS programmes. This feeds into the development of Phase 0, A and B.

Through H2020 Space, Galileo has invested significant funding in direct procurement of R&D. The purpose of the calls is to generate new and innovative mission concepts to ensure that the second generation fulfils evolving user needs, as analysed in the Galileo mission evolution process.

Selected examples of annual calls in the 2016-2017 WP that focused on contract R&D are:

• Activity 1 - Galileo Evolution, Mission and Service-related R&D activities €3.3 million

• Activity 2 - EGNOS, Mission and Service-related R&D activities €0.9 million

• Activity 12 - GNSS Evolution, Mission and Services related R&D activities €3.2 million

• Activity 13 - EGNOS, Mission and Service-related R&D activities €0.7 million

• Total - €8.1 million

The Work Programme H2020 Space 2018-2020 included further support for contract R&D. There are again three different activities that provided funding support for contract R&D, namely:

• (1) Galileo Evolution, Mission and Service-related R&D activities - EUR 2.60 million in 2019 and EUR 1.80 million from the 2020 budget. Actions related to EGNSS services will cover the following theme: Innovative Concepts.

• (2) EGNOS, Mission and Service-related R&D activities - EUR 0.40 million and EUR 0.20 million from the 2020 budget, and:

• Total: €5 million

Although the Galileo programme owns the IPR for all technologies developed, including those under H2020 Space, a licensing scheme has been put in place for industry which is already built into the contract signed with industry players contracted to undertake R&D on behalf of Galileo. The licensing scheme is managed by Galileo programme managers at the European Commission’s DG GROW. This means that a license to use the technologies does not need to be issued retrospectively to the company when it is needed to pursue aims relating to the Galileo programme. There is sufficient flexibility in H2020 Space for firms involved in undertaking contract R&D for the Galileo programme to exploit the IPR. For example, if a company from within the European space industry wants to use European IPR for any other purposes, it can request a so-called “extended licence” to the Programme69.

Direct contract R&D funded in H2020 Space is playing an important role in stimulating the initial development of industry capacity and supply chains in research fields where there is a need for structuring of the market. This is necessary both to ensure that Galileo’s current R&D needs and future procurement needs can be met, but also helps to foster the development of sustainable supply chains over the medium-long term. The use of R&D procurement as a mechanism to foster innovation also contributes towards promoting greater competition in emerging areas of the upstream space market, since actors engaged in contract research receive sufficient support that they are encouraged to remain active in a particular research field, and to become future market participants in specialist areas where they can develop their capacities in particular market niches (e.g. instrumentation on

69 An example is the licence issued to Thales to set up an EGNOS-like system in South Korea.


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board satellites).

It should also be mentioned H2020 is also used to perform R&D which feeds into the development and evolution of the Copernicus programme. However, the focus here is on grants rather than on direct R&D procurement.

3.4.3.3 Role of commercial demonstration projects

There remains an ongoing need for mechanisms to continue to be funded to bridge the gap between the more fundamental research being undertaken by ESA and some national space agencies, direct contract R&D through H2020 Space and conventional procurement within the EUSP.

Since operational services are contingent upon procuring reliable and high-performing space infrastructures, it is vital that innovation is fostered either within the EUSP or through research programmes (e.g. Horizon 2020 Space and the future Horizon Europe). There needs to be sufficient time for promising technologies and innovations being developed by industry to mature by the time these are actually needed. Public sector space agencies can also play an important role in supporting the development of capacities so as to help structure the market and encourage new market entrants.

Case Study 3-5 – Commercial Orbital Transportation Services (COTS) Programme – Stimulating the Technical Capabilities of the Commercial Sector.

Introduction: In 2004, President Bush established the U.S. Space Exploration Policy, which called for a return to the moon by 2020 and the Space Shuttle to be retired by the end of 2010 after completion of the ISS assembly. U.S. private industry was then challenged to develop cargo and eventually crew space transportation capabilities that could meet the needs of the ISS.

Objectives: COTS was a demonstration contract to help develop Commercial Partners’ (CPs) capabilities to deliver operational transportation services. The program’s objectives are to:

• Implement U.S. Space Exploration policy with investments to stimulate the commercial space industry

• Facilitate U.S. private industry demonstration of cargo and crew space transportation capabilities with the goal of achieving safe, reliable, cost effective access to low-Earth orbit.

• Create a market environment in which commercial space transportation services are available to Government and private sector customers.

Description: Instead of specifying the detailed requirements which would normally be required for a typical NASA programme, the COTS programme identified several broad cargo and crew transportation capabilities. Bidders were therefore able to choose which capabilities they could offer. This provided industry an opportunity to innovate and to focus their COTS system on capabilities which fit their business plans and market projections. When selecting a portfolio of companies for COTS funding, NASA could then ensure coverage of capabilities.

Companies were asked to select a LEO test bed, whether ISS or an orbital target of their own, for flight demonstration of their COTS capabilities. If companies opted to use ISS as their test bed, then they were required to meet ISS visiting vehicle integration requirements. COTS is not a procurement, but neither is it a grant or a cooperative agreement, which is commonly used when NASA provides funding to a university for research.

Funding: $500 million was initially allocated by NASA over five years to stimulate the development and demonstration of commercial capabilities. NASA used a two-phase acquisition strategy for cargo to ISS. The Program manages Commercial Orbital Transportation Services (COTS) partnership agreements with U.S. industry totalling $800M for commercial cargo transportation demonstrations and is investing $50M towards commercial crew development initiatives.

Benefits for NASA: COTS provided NASA with an opportunity to stimulate the participation of commercial partners by serving as a leading investor and customer of transportation services to help stimulate the market. A further benefit was to demonstrate the performance prior to purchasing services.


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A further benefit of the programme was that it has fostered NASA/industry partnership. Cost-sharing and risk-sharing principles were established based on the terms and conditions of the Space Act Agreements (SAAs). Although commercial partners received performance incentives, NASA required that its commercial partners share in the cost of the COTS system development and demonstration. The rationale was to lower NASA’s costs and to ensure that partners in COTS had sufficient incentives to design, build and demonstrate their systems in a timely manner. There was also an opportunity through the 5-year programme to test operational prices for goods and services that could be procured by NASA in future.

Benefits for companies: the benefits were that once developed, the transportation systems developed through COTS would be company-owned-and-operated systems. Participants have therefore been able to establish an early competitive position in the U.S. commercial space transportation industry, which could increasingly take over from services being provided by NASA itself. A further advantage is that companies would broadly retain their IPR. “Under the COTS SAA, if the company performed, NASA would refrain from using their intellectual property and other property”.

Source: CSES analysis of information available on COTS programme - https://www.nasa.gov/commercial-orbital-transportation-services-cots

A further example of an initiative to promote the development of commercial services in emerging sub-sectors in the upstream space sector is that ESA is promoting a Service Oriented Approach (SOR) for In-orbit Servicing/Debris Removal. In September 2018, ESA released a ‘Request for an Outline Concept for the removal of an ESA-owned satellite to demonstrate commercial in-orbit services’70. Based on the proposals received, six companies were selected for the Service Offer Request (SOR). The SOR are, in summary, to:

• Remove from orbit ESA-owned object(s) with a total mass greater than 100 kg no later than end 2025 (‘initial Service’);

• Demonstrate, in orbit, feasibility of critical technologies enabling other (commercial) in-orbit servicing opportunities;

• Provide a robust business model for in-orbit servicing activities beyond the Service to be provided to ESA; and to

• Comply with ESA's space debris mitigation requirements.

Both the COTS Programme in the U.S. funded by NASA and the SOR for in-orbit servicing/ debris removal provide good examples as to how public procurement can be used as a mechanism to stimulate the market.

3.4.3.4 Public Procurement of Innovation (PPI)

It should be stressed that PPI is only one among a number of mechanisms that could be utilised to foster innovation. However, PPI would only be needed in addition to existing funding mechanisms, namely the ESA research programmes, research by NSAs and contract R&D through H2020 Space if it could be shown that there is a definite gap in terms of TRL levels that means that demonstration projects cannot be funded through alternative funding instruments. This could be the case for example, if a decision is taken relating to Horizon Europe to reverse the practice in Horizon 2020 to fund applied research projects with a higher TRL (e.g. TRLs 6, 7 and 8) which was not previously possible in earlier RTD Framework Programmes.

Information regarding how PPI might work in the context of feeding in innovation to the EUSP is now provided.

The procurement of innovation (PPI) takes place prior to fully-fledged procurement in instances when

70 http://blogs.esa.int/cleanspace/2019/02/14/webinar-an-explanation-of-esas-in-orbit-servicing-debris-removal-service-

offer-request-sor/

https://www.nasa.gov/commercial-orbital-transportation-services-cots

https://www.nasa.gov/commercial-orbital-transportation-services-cots


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goods or services are at a pre-operational stage, but show promise (see figure below)71. Commercialization is not allowed to be part of the PCP process according to the WTO/GPA and EU regulations. PCP is an approach to procuring R&D services, which involves risk and benefit sharing and which does not constitute state aid.

Figure 3.6: Pre-commercial Procurement v. Public Procurement of Innovations

Source: European Commission (2007), Pre-commercial Procurement: Driving innovation to ensure sustainable high quality public services in Europe, COM(2007) 799

PCP uses an open tendering approach and the research results and IPR are shared between the contracting authority and contractor (the supplier retains ownership of the IPR and the procurer has the right to use/license the IP). It allows multiple sourcing to be utilised (i.e. multiple suppliers in parallel). PCP can be used to de-risk a large programme budget by including some PPI activity to ensure that contract R&D procured addresses early-stage identified needs. PCP falls outside the WTO government procurement rules, and therefore allows for the creation of the necessary conditions to encourage job creation in Europe. PCP as a mechanism is thought to prevent the limitation of competition and the crowding-out of private investment in R&D. It facilitates access to the procurement market for SMEs (e.g. by gradually increasing contract sizes, tasks, required manpower etc.). To this end, a PCP process starts with an open dialogue with (all) potential tenderers and end-users so it does not preclude or distort competition.72

PCP can sometimes even be completely distinguished from innovation procurement (and from other types of procurement more generally) as it is considered to be a form of direct (public) investment in R&D. PCP can therefore be labelled as contract research rather than as a form of procurement. As such, it provides a mechanism for strengthening innovation in the early-stage development of technologies and innovations that feed into the EUSP.

PCP can cover the R&D stage of a procurement of an innovation but also be a standalone instrument usually producing a prototype but not a product or service ready to be procured.73 PCP can therefore be seen as an instrument used prior to the procurement of innovation of existing goods and services. By definition, this mechanism falls outside the scope of the EU Public Procurement Directive (Directive

71 Rigby (2013), Review of Pre-commercial Procurement Approaches and Effects on Innovation, Nesta Working Paper

13/14 72 European Commission (2014), HORIZON 2020 Work Programme 2014. Specific requirements for innovation

procurement (PCP/PPI) supported by Horizon 2020 grants. 73 Edquist, Vonortas and Zabala-Iturriagagoitia (2015), Introduction, in Edquist et al, Public Procurement for Innovation, 1-34.


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2014/24/EU74) and remains an option for procuring organisations to be used in the event that procurement needs cannot yet be met by the market. PCP does not usually involve the procurement of new innovations per se, but rather involves procuring contract R&D, although it can precede innovation - and thereby influence innovation processes from the supply side, but not from the demand side. Consequently, the EU refers to PCP as dealing with the procurement of R&D services not falling within the scope of the EU Procurement Directive.

PCP is part of a family of instruments in what is sometimes called innovation-related public procurement. Such an approach differentiates between direct innovation procurement, catalytic innovation procurement, functional regular procurement, and Pre-Commercial Procurement. The first three instruments are also called Innovation-Enhancing Procurement (IEP).75

There have been difficulties in utilising PCP within EU programmes, due to the absence of a conducive legal and operational framework that would enable PCP to take place more readily at EU level. However, it is questionable whether a PCP approach is needed since contract R&D already takes place in H2020 Space.

3.4.3.5 Use of PCP in Horizon 2020 generally and in H2020 Space

PCP Actions supported in Horizon 2020 provide EU co-financing for actual PCP procurement (one joint PCP procurement per PCP action) and for related coordination and networking activities (e.g. to prepare, manage and follow-up on PCP procurement). The funding rate for these activities is up to 90% of eligible costs. However, whilst there is scope within H2020 to support PCP, in the case of H2020 Space, a PCP instrument has so far only been utilised to foster the development of downstream services76 in the 2016-17 Work Programme. Nevertheless, there are similarities between contract R&D being funded in the space domain and a PCP instrument.

The only evidence of the use of PCP was the commissioning of “earth observation-based services for marine monitoring and maritime security” (Marine-EO) that was managed by Directorate General for Maritime Policy (DGPM).

3.4.3.6 Pre-commercial procurement in the EU and US

There is no specific mechanism in the EU Financial Regulation to enable PCP to be used. However, this is not surprising given that PCP is designed to be conducted outside the normal procurement rules, since the public procurement directives are not applicable. Almost by definition, PCP is organised outside of the legal EU procurement framework, since it is a preparatory stage that takes place before ‘mainstream’ procurement.

The legal framework for PCP is described in a document77 outlining FAQs on PCP and PPI as follows “When PCP is performed in a competitive, open and transparent way in line with the EU Treaty principles, where the assignment of IPR ownership to companies is reflected at market conditions in the price paid for the R&D service procured, then PCP is not considered State aid. PCP falls outside of the WTO government procurement rules, and outside the EU public procurement directives”.

PCP is more common in the U.S. For instance, NASA has got experience in implementing PCP through a public-private partnership approach78. There are some key differences in the legal regime for PCP between the EU and the US. Whilst PCP is already allowed under EU law, “at present no means of

74 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC 75 Edquist (2017), Mutual Learning Exercise (MLE) Innovation related public procurement. Developing strategic frameworks for innovation related public procurement Thematic Report Topic A. 76 PCP (Downstream services for public authorities; EO-2-2016) 77 Pre-Commercial Procurement (PCP) and the link with Public Procurement of Innovative Solutions (PPI) - http://www.imaile.eu/wp-content/uploads/2014/03/FAQs_PCPandPPI.pdf 78 https://www.nasa.gov/press-release/nasa-establishes-new-public-private-partnerships-to-advance-us-commercial-space

http://www.imaile.eu/wp-content/uploads/2014/03/FAQs_PCPandPPI.pdf

https://www.nasa.gov/press-release/nasa-establishes-new-public-private-partnerships-to-advance-us-commercial-space


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operating pre-commercial procurement to favour small firms to the extent of disbarring large ones from applying for procurements as is the case in the US”79. Nevertheless, it is argued in the same compendium of evidence on PCP that “the style of operation and scale of PCP approaches may encourage small firm participation”.

A case study that illustrates the potential utility of a PCP-type approach in stimulating innovation is provided below.

Case Study 3-6 - Case study on use of PCP-type approach by NASA

Title: Public-Private Partnerships to Advance Tipping Point Technologies

Organisation: NASA (Space Technology Mission Directorate)

Objectives: To accelerate the availability of, and to reduce costs for the development and diffusion of emerging space system capabilities. In addition, to promote risk-sharing between the US space industry and NASA through a public-private partnerships (PPP) approach.

Description: In 2015, NASA developed a concept for public-private partnerships (PPP) to achieve its strategic goals of expanding capabilities and opportunities in space. NASA’s Space Technology Mission Directorate (STMD) was looking for a new approach to identifying potential partners using a so-called Announcement of Collaborative Opportunity (ACO) focussing on industry-developed space technologies with the potential to enhance commercial space and benefit future NASA missions. Since 2015, four so called “tipping points” (“Industry-Developed Tipping Point Technologies”) have been published detailing the technologies in question. These are developed and published annually. In general, technologies developed through these PPPs target a timeframe of no more than two years for the development and infusion of these new capabilities into operational space systems. Tipping point technologies are those that PCP investment is used for to demonstrate their capabilities and which will result in a significant advancement of the technology's maturation, a high likelihood of take-up and integration into commercial space applications, and / or a significant improvement in the ability to successfully bring the technology to market (i.e. TRL 4 or higher).

As part of the process of establishing PPPs, NASA is soliciting proposals from all interested U.S. private sector enterprises that wish to enter into non-reimbursable Space Act Agreements (SAA), i.e. agreements that involve NASA and one or more Agreement Partners in a mutually-beneficial activity that furthers the Agency's Missions. Unlike Reimbursable Agreements, each partner bears the cost of its participation and no funds are exchanged between the parties. NASA contributes technical expertise, test facilities, hardware and software to aid industry partners in maturing capabilities that can enable or enhance space vehicle systems and/or mature other closely related subsystems.

The process involves six steps: Upon publication, prospective participants communicate with a dedicated Center Point of Contact (POC) to discuss their collaboration needs and develop their preliminary proposals. The potential participants and NASA’s POCs jointly discuss and determine the resources and schedule that are needed to support the partnership based on the proposed objectives. This is followed by a Mandatory Preliminary Proposal, identifying proposed NASA contributions and including an estimate of the Rough Order of Magnitude (ROM) resource needs for each resource type. NASA then provides feedback on each Preliminary Proposal received. This feedback includes an initial assessment against the evaluation criteria, including the appropriateness of each participating NASA Center, and an assessment of the reasonableness of the requested resources.

After that, prospective participants develop their Full Proposal, discussing any necessary elements with the applicable NASA Center POCs. The final proposed resource levels and types are determined together with the designated POC at each NASA Center involved in the proposed development partnership. Due Diligence (DD) and negotiations for SAAs are conducted with participants, as needed. NASA provides the participants with a list of questions resulting from the evaluations and workers with the participants to resolve any issues associated with the SAA. After completing DD and SAA negotiations, NASA presents the results of the proposal evaluation to the Selection Official, who selects a portfolio of one or more participants whose proposals are

79 Review of Pre-commercial Procurement Approaches and Effects on Innovation: Compendium of Evidence on the Effectiveness of Innovation, Policy Intervention, January 2013, John Rigby, Manchester Institute of Innovation Research, Manchester Business School, University of Manchester.


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deemed most effective, and can be supported by NASA within the available resources. Upon selection, NASA executes the negotiated SAA with each selected participant.

Funding amount and sources: There is no information about the overall amount of funding allocated to these PPPs. There is information on the two PPPs already established (based on the 2015 and 2016 AOCs, respectively): the 2015 solicitations resulted in four projects with nine companies. These contracts ranged in value from $1 million to $20 million. Furthermore, 13 companies were awarded with AOCs for another four projects. However, there is no information on the value of contracts resulting from the AOCs. Following the 2016 solicitations, two PPPs with a total eight companies were created, combining contracts with a combined total of approximately $17 million. These fixed-priced contracts include milestone payments tied to technical progress and require a minimum 25 percent industry contribution, though all awards are contingent on the availability of appropriated funding.

Benefits:

• Risk-reward sharing between the public and private sectors, highlighting the value of public-private partnerships;

• Structured mechanism for IPR-sharing arrangements;

• Clear division of labour between NASA and its suppliers, i.e. no money is being exchanged but supplier defines the role of NASA, and the resources necessary to fulfil that role. During the process each party works on their part of the development;

• Leverage effect on public investment - limited programme funds for technology development;

• Leverage partners’ funds and investments to achieve NASA’s R&D goals;

• Fill specific technical gaps;

• Avoid additional programme costs by providing a portfolio of technology solutions;

• Accelerate technology development and maturation and make better informed decisions when selecting technologies for programs, projects, and missions; and

• Increase the return on R&D investment, since there may be additional marketplace applications beyond the specific application commissioned by NASA alone.

Lessons learned: Demonstration projects can have an important role in the testing and initial validation of as yet unproven technologies. Through the utilisation of PPPs, NASA manages to avoid crowding-out of private investments in space-related R&D. The instrument and approach have successfully been used for a certain type of pre-commercial procurement, i.e. for technologies in need of ground development/demonstration or a flight demonstration resulting in a significant advancement of the technology's maturation. The PPPs fulfil two functions of public procurement of/for innovation at once: co-development of technologies directly relevant to NASA’s missions (direct procurement) and – as a form of catalytic public procurement – assist the commercial space industry by acting on behalf of other end‐users (demonstrating the feasibility and signalling market readiness).

Replicability and transferability: H2020 Space already provides a mechanism to support contract R&D to procure early-stage needs. However, there is arguably a gap which relates to the funding of demonstration projects with higher TRLs feeding directly into accelerating the development, qualification and proving up of cutting-edge technologies. This could either be done through H2020 Space, or through a separate PCP scheme.

NASA’s approach is applicable for “tipping point” technologies, i.e. technologies with a TRL of 4 (or higher) whilst PCP schemes normally target technologies with a high TRL (6-8). PPI usually targets technologies that are already close to commercialisation (TRL 8 or 9). The processes to create the PPPs could in theory be used to cover stages of the R&D&I process that currently cannot be accessed through PCP, as it is used when there are no near-to-the-market solutions yet that meet all the procurers' requirements and new R&D is needed to get new solutions developed and tested to address procurement needs. However, H2020 already provides the opportunity to use CSAs as a tool to facilitate the preparation of PCPs and PPIs.

The replicability of NASA’s PPP approach largely depends on the emphasis put on the main objectives of H2020 and its space programme (“[…] foster a cost-effective competitive and innovative space industry…”). Technologies relevant to the European space missions could be advanced through a dedicated funding scheme for large-scale demonstration projects. Any type of public procurement – subject to the TRL of the outcome of such a demonstrator – ranging from PCP to PPI would be feasible as a follow-up. If however, the


73

potentially catalytic function of public procurement is deemed relevant, NASA’s approach could function as a template after which a European initiative could be modelled.

Source: desk research, website sources such as: https://www.nasa.gov/offices/ipp/centers/kennedy/technology_infusion/index.html


There would be advantages in addressing the gap identified relating to the lack of funding available for higher TRL level applied research to ensure that there is a continuum to ensure that research and demonstration activities can take place at all TRL levels so as to ensure that innovation is mainstreamed as a cross-cutting criterion.

However, there would be advantages and disadvantages of relying on particular mechanisms identified in the different sub-scenarios. For instance, fundamental research carried out by ESA and NSAs has the advantage that this is already being funded by ESA Member States and the research outcomes have been helpful in feeding into phases 0, A and B of the space programmes, including the feeding in of lessons learned from previous missions to inform planning for EUSP missions and for the design of the next generation of EO and navigational satellites. However, an over-reliance on fundamental research could risk creating a gap in terms of more applied research projects and demonstration projects.

Contract R&D funded through H2020 Space has the advantage that it enables the contracting authorities to procure exactly what they need for early-stage development of Galileo and Copernicus, in a way that helps to structure the market. However, a disadvantage is that there are concerns that EU RTD FP funding should not seek to do the same job as ESA and the NSAs in terms of feeding in the results from fundamental research into the EUSP.

Regarding the possible use of a PCP approach, an advantage is that this could be an effective mechanism to foster a public-private partnership approach characterised by risk-reward sharing with industry. However, a disadvantage is the potential risk of duplication. H2020 Space already provides scope to launch direct procurement activities for contract R&D, including demonstration projects.


The costs and benefits of embedding innovation in research programmes and other mechanisms to produce innovation which feed into the EUSP will vary depending on the specific mechanism concerned.

It was not possible to assess costs and benefits for each sub-scenario, since these were not defined in sufficient detail until the late stages of the study. Instead, we have focused the assessment on identifying the order of magnitude of costs and benefits in respect of two specific sub-scenarios:

• The expected costs and benefits of a ‘first contract’ or demonstration contract approach to the development of capacities;

• The costs and benefits of a Pre-Commercial Procurement (PCP) approach.

An overview of the nature and magnitude of costs and benefits of a demonstration contract approach to the development of capacities is provided below:

https://www.nasa.gov/offices/ipp/centers/kennedy/technology_infusion/index.html


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Figure 3.7: The costs and benefits of a ‘first contract’ approach to the development of capacities

Source: CSES, Qualitative assessment of magnitude of costs. The ‘first contract’ approach has the potential to generate considerable new employment, at least over the medium to long term, by stimulating the development of new markets (including niche markets) where the private sector could potentially play a pivotal role in future. Examples are the provision of operational space debris removal services, in-orbit servicing and satellite removal (see earlier description of ESA’s encouragement of commercial satellite removal services) and space transportation services (see earlier NASA COTS case study). A distinction can be made between the jobs that would be created during the first contract, through the provision of such contracts to a small number of providers directly using EU funding in order to foster the development and demonstration of new commercial capacities and to structure the market. However, the extent and sustainability of employment creation would be dependent on the European Commission making a longer-term commitment to contracting out some support services to the private sector in new and emerging areas of the upstream space sector, such as the examples cited above of in-orbit servicing.

First contracts

Need to invest in the development of new

technica l capaci ties Medium 2

Need to invest in the development of new

organisational capaci ties Medium 2

Need for the development of new ski l l s to

manage demonstration contracts and to

define the future capaci ties that the EUSP

wi l l require of i ts contractors .

Signi ficant

3

Financia l cost to fund fi rs t contracts (for

sufficient time for industry to develop the

necessary technica l capaci ty and to

structure the market)

Signi ficant

2.6

Risk of overlapping with H2020 Space (which

also funds some cal ls to help to structure

the market by stimulating private sector

participation in particular research fields

through provis ion of smal l -sca le contracts ).

Medium

1.5Risk-reward sharing between the publ ic and

private actorsSigni ficant 3

Targeted support for SMEs: fi rs t contracts to

develop new capaci ties could benefi t a l l

types of fi rms, but are of particular interest

to innovative, research-intens ive SMEs

specia l i s ing in niche areas .

Signi ficant

3Increased support to early-s tage R&D with

higher TRL levels (6, 7 and 8)

Medium/s igni f

icant 2.5Learning benefi ts from working s ide by s ide

with the contracting authori tyMedium 2

Retention of IPR (see COTS case study

whereby industry is a l lowed to reta in most

IPR)

Medium

2Increased contribution to appl ied space

R&D Signi ficant 3

Acceleration of capaci ty development and

fostering of innovation in speci fic domains Signi ficant 3

Contribution to market structuring and

support to SMEsSigni ficant 3

Reinforced dia logue with industry about

future capaci ties needed in the EUSP.

Margina l/medi

um 1.5

Potential size of the cost or

benefit


Costs

for industry

for the

procurement

authority / EU

Benefits

for industry

for the

procurement

authority / EU


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Regarding the impact of the ‘first contract’ approach scenario on competition, this could encourage relatively new European market entrants to take part in the development of pre-commercial services which would not otherwise be developed in the absence of such procurement. The extent to which this would favour European firms will depend on the procurement rules used to award such demonstration contracts. For instance, if the first contracts being awarded are feeding into the early-stage development of the Galileo programme, then under the WTO rules, there are exemptions from opening up the market to full competition for instance due to security considerations. Alternatively, a first contract approach could be funded through Horizon Europe or through the EUSP itself.

The COTS programme was only open to US firms. Therefore, if a similar approach were to be replicated through a new first contract programme either funded through the EUSP, or Horizon Europe, the aim could be to strengthen the technical capacity of European firms, especially SMEs. This would evidently benefit European firms considerably.

However, the current study was exploratory in nature, with limited resources to investigate detailed technicalities for each scenario and sub-scenario. Research would therefore need to be undertaken as part of a possible follow-up study (or studies) to analyse whether a first-contract approach should be implemented through the EUSP or the future Horizon Europe.

Turning to the expected costs and benefits of a PCP approach, which was one of the further sub-scenarios examined, these are outlined in the following diagram:

Figure 3.8: Expected costs and benefits of a PCP approach

Source: CSES, Qualitative assessment of magnitude of costs.


The feasibility assessment found that there are a number of viable alternative mechanisms that could enhance the level of innovation within the EUSP. In the following table, we examine the potential

Need of time to became aware of and adapt to the

new approachMedium

2

Risk of confusion due to possible difficulty to distinguish

between the PCP approach and already existing EU and

national instruments to support early-stage R&D

Medium

2Need of time and new skills (including legal skills) to

experiment with the new approach in the Space

upstream sector

Significant3

Financial cost to fund the PCP projects, on top of

already existing procurement and grant mechanismsSignificant 3

Risk of duplication and overlapping with the RTD FP Medium/significant 2.5Risk-reward sharing bewteen the public and private

actorsSignificant

3Targeted support to SMEs: the size of PCP contracts

would make this approach particularly interesting for

innovative, research-intensive SMEs specialising in

niche areas

Significant

3

Increased support to early-stage R&D Medium/significant 2.5Learning benefits from working side by side with the

contracting authorityMedium

2Possibly lower administrative burden than for research

projects funded by the RTD FPMedium

2Increased contribution to space R&D and acceleration

of innovation in specific domainsSignificant

3

Contribution to market creation and support to SMEs Significant 3Learning benefits from working side by side with the

industryMedium

2Reinforced dialogue with the industry and market

knowledgeMarginal/medium

1.5



Costs

for the industry

for the

procurement

authority / EU

Benefits

for the industry

for the

procurement

authority / EU


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feasibility, as well as the advantages and disadvantages associated with different sub-scenarios. It should of course be stressed that some mechanisms mentioned to foster innovation are already being implemented, so it is a matter of presenting these as part of a holistic package of possible measures to assist DG GROW and contracting authorities involved in delivering the EUSP to determine the optimal mix of programming and other instruments that serve to embed innovation within the EUSP.


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Table 3.9 - Feasibility assessment of sub-scenarios under Scenario 3 – different mechanisms to promote innovation

Sub-scenarios Feasibility

Scenario 3.1 - Rely on existing EU and ESA research programmes which support fundamental research to ensure that innovation is integrated in the EUSP.

• Basic research funded through (1) ESA research programmes and (2) contract R&D activities procured through H2020 Space feeds into Phases 0, A and B of space engineering for the Galileo and Copernicus programmes.

• Both programming instruments are already currently being used to ensure that research results from early-stage research are fed in into the longer-term development of the EUSP (including the finalisation of technical requirements for the new generation of EO and navigational satellites).

• Therefore, this sub-scenario has already been proven to be feasible and effective. It is more a question of determining whether there is a need for any additional funding on top of existing funding levels to ensure that innovation is systematically embedded in the EUSP.

• If there is deemed to be a gap in funding of applied research and close to the market research at TRL levels 6, 7 and 8, an alternative to the ‘first contract’ approach (outlined below) could be to put greater funding into demonstration projects taking place at higher TRLs (either during the remainder of H2020 Space (and/ or in planning for Horizon Europe).

• However, this would be dependent on demonstration projects taking place at TRLs 6-8, continuing to be eligible for funding support in the new period. Alternatively, a first contract approach could be funded through the EUSP themselves.

Scenario 3.2 - Development and implementation of a ‘first contract’ approach

• A ‘first contract’ approach (also known as a demonstration contract), could be modelled based on the COTS approach (see case study) i.e. a dedicated programme designed to foster the development of new capacities among industry players in areas of the market where demand for private sector capacity may emerge in the future development of the EUSP.

• However, this scenario would require a long-term and strategic approach, with joined-up planning between contracting authorities and industry as part of a partnership approach.

• There is a need to ensure that medium-long term investment in capacity development by industry is rewarded once the market has been structured by contracting authorities committing over the long-term to contract out particular types of procurement of goods and services relating to upstream space infrastructures, sufficient to warrant industry investment. Examples might include in-orbit servicing, space transportation services, deployment of ADR technologies and operating ADR missions, or any area of the EUSP where contracting authorities envisage a greater role for the private sector in future.

• This scenario is feasible and could help to address a gap in respect of funding support for accelerating the proving up of new technologies through research and demonstration activities at TRLs 6-8.

Scenario 3.3 - Pre-commercial Procurement (PCP) mechanism (either within or outside the EU RTD FPs)80

• A new PCP scheme could be funded separate from the EUSP. The purpose would be to address the perceived gap between the availability of funding for early-stage research at TRLs 1-4, and the need to procure operational services. In other words, there is arguably a gap at TRLs 5-8.

80 PCP involves the purchase of research (results) by a contracting authority with the objective of stimulating innovation that the contracting authority or some other party will need or may benefit from as soon as goods or services (that by definition are not currently available) are developed based on those research results.


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Sub-scenarios Feasibility

• The organisation of demand at EU level for European users using a PCP approach was seen as beneficial for all Member States willing to participate81. However, there are concerns regarding whether a PCP approach is necessary, given that H2020 Space already provides a mechanism through which contract R&D can be directly procured.

• If a PCP pilot were to be launched, then a key consideration would be the need to avoid duplicating contract R&D activities being funded under H2020 Space. It would therefore be necessary to ensure how complementarity might be ensured by differentiating between what types of R&D&I is procured through contract R&D under H2020 Space and PCP.

• One possibility might be to set up a pilot scheme using PCP at TRL levels 6-8, whose aim could be to bridge the gap between earlier-stage research conducted through H2020 Space (TRL 2-5) and the later-stage, high Technology Readiness Level (TRL), and operational, proven technologies that are needed in the EUSP.

• Although SMEs cannot be exclusively targeted through PCP in the same way that is permitted under the legal framework in the US, they would be disproportionately likely to benefit from a PCP initiative, since the average contract size for PCP is such that it would benefit innovative, research-intensive companies specialising in niche areas. The contracts could attract primes but would be designed to be of a size that might make them attractive to SMEs.

• Early stage R&D feeding into Phases 0, A and B of space engineering for the Galileo and Copernicus programmes is already being supported through: (1) fundamental research being undertaken through ESA’s own space programmes, working in conjunction with a number of national space agencies and 2) contract R&D within H2020 Space. Therefore, it is uncertain whether there is sufficient demand for additional support to foster innovation to justify going ahead with a separate PCP scheme. There are also alternatives to PCP, such as using a first contract approach.

81 Probst et al (2016), Space tech and services Applications related to navigation – focus on Galileo PRS

Annex 1 - Options analysis

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Assessment of overall feasibility

Whilst this study was exploratory, it was nevertheless useful to identify different possible options as to how a societal criteria approach might be introduced. The definition of options provided an overall analytical framework, which informed the development of the recommendations presented in the executive summary.

The options were developed based on stakeholder feedback solicited as to the possible introduction of societal criteria in upstream space procurement, and further analysis based on desk research. A distinction was made between the status quo option, required in all impact assessments, and different alternative mandatory and non- mandatory options. Further sub-options and variations on the options presented could be considered.

Examples of alternative policy options are summarised in the following table:


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Options Definition and explanation of each option Advantages Disadvantages

Option 0 – Status quo option in new MFF 2021-2027

• Continuation of current situation in EU space programmes from 2014-2020 in successor programmes in the new MFF.

• No mandatory societal criteria, but encouragement on voluntary basis of integration of life-cycle assessment costs in some programmes (e.g. Copernicus).

• No additional costs for either contracting authorities or industry

• EC at continued risk of criticism from external stakeholders regarding whether the EU space programmes pay sufficient attention to non-technical matters e.g. environmental issues etc.

• Missed opportunity. Societal criteria could help the EU to demonstrate the societal benefits to help justify the significant expenditure required (e.g. to MS authorities, EU citizens)

Option 1 – Mandatory approach with the inclusion of several societal criteria

• Societal criteria could be made mandatory in relation to innovation, environmental and employment criteria.

Example of how this might work:

• Environmental criterion: requiring contractors to incorporate LCA approach on mandatory basis, requirement to demonstrate mitigation planning to ensure clean space, and how reductions in adverse environmental impacts will be achieved (e.g. reducing climate change impacts through more fuel-efficient technologies in successive generations of satellites, toxicity of propellants and other materials not burning up on re-entry of satellites when being deorbited to the earth’s atmosphere).

• The criteria would be mandatory and would therefore either be included in the selection or the award criteria.

• Maximise the potential contribution of the EU space programmes to promoting employment and growth, and to strengthening Europe’s industrial space competitiveness.

• Ensure that contractors take societal criteria seriously both at technical proposal stage and during contract implementation.

• Avoids having a hierarchy of societal criteria in which some are introduced but others ignored.

• Questionable level of stakeholder acceptance. Several stakeholders both on the contracting authority side and among industry stated that it would be unrealistic to introduce a big bang approach to the introduction of societal criteria

• Both contracting authorities and industry may need time to get used to the criteria, and for industry, to absorb the costs (especially if any substantive compliance costs will occur due to changing hardware design and configuration.

• There could be a risk if built systematically into award criteria that the technologies concerned to demonstrate these aren’t sufficiently well-developed.

While the largest big contractors are likely to be already equipped to comply with additional or stricter requirements, these requirements may represent significant technical barriers limiting the participation of SMEs and newcomer competitors. Risk of entrenching the existing prime supplier base.

Option 2 – Mandatory approach to the inclusion of some societal criteria

• Example: Societal criteria could be made mandatory in relation to one or more criteria, but other criteria could either be mainstreamed, kept entirely voluntary,

• More realistic than a “big bang” approach.

• Gradual introduction of

• Less bold than making all societal criteria mandatory.

• Risk of entrenching the existing prime supplier


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Options Definition and explanation of each option Advantages Disadvantages

Option 2.1 - Some mandatory criteria and promotion of voluntary approach to mainstreaming inclusion of criteria

Option 2.2 - Make mandatory at least a few number of environmental criteria, mainstream other criteria and leave voluntary the application of other criteria.

or a combination of the two, depending on the criterion.

societal criteria likely to be better accepted by stakeholders affected, especially large manufacturers and their SME supply chains

• Could be used to prioritise which criteria urgently need to be integrated (e.g. space debris has become recognised as more of a problem post 2012 incident)

base (described in detail in Option 1).

Option 3 – Voluntary approach to mainstreaming the inclusion of societal criteria

• Societal criteria could be mentioned in the Tender Specifications in a procurement contest as something that tenderers should consider in their bid as a set of horizontal issues that should be addressed in order to deliver optimal technical solutions.

• Such criteria could either be mentioned in the Tender Specifications without being made a formal selection criterion.

• They could nevertheless be given a small number of points (5 or 10/ 100) in the award criteria to encourage contractors to take them seriously.

• Some stakeholders do not believe it is realistic or proportionate in terms of administrative costs and burdens to make societal criteria compulsory in upstream.

• Mainstreaming may be more realistic than a mandatory approach, given the small numbers of procurements of satellites for the Galileo and Copernicus programmes annually.

• If only voluntary, some economic operators bidding may ignore societal criteria altogether and focus on technical solutions only.

• A mainstreaming approach may not sufficiently convey the seriousness with which the European Commission and ESA would like contractors to treat at least some societal issues (e.g. minimising harmful environmental impacts through a clean space policy, removal of space debris, and an LCA approach).

• However, if voluntary criteria are given some points in the award criteria, they could be perceived as being de facto mandatory by industry in that failure to take them into account could risk losing contracts.


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Feedback on these options is now provided.

Option 0 – Status quo option in new MFF 2021-2027

Some stakeholders, especially some industry players, argued that no changes should be made to the present arrangements whereby in the 2014-2020 period, there are no requirements for societal criteria in upstream public procurement.

It was suggested that the main advantage of this approach is that it would avoid placing administrative costs on industry. There was also some support for not taking any action among some interviewees within contracting authorities too, due to perceived administrative burdens of introducing a mandatory approach, especially those relating to monitoring compliance.

A clear disadvantage of this approach is that it would arguably constitute a missed opportunity in that the introduction of such societal criteria is now possible under the revised EU Public Procurement Directive of 2014 (Directive 2014/24/EU). This could help the EU to demonstrate the societal benefits to justify the significant expenditure required to support investment in upstream space infrastructure (e.g. to MS authorities and EU citizens more widely).

Option 1 – Mandatory approach with the inclusion of several societal criteria

Regarding Option 1, making the inclusion of such criteria mandatory was recognised by some stakeholders as representing an opportunity to firmly embed societal criteria in space procurement. This could potentially enhance the potential socio-economic contribution of the space programmes to the European economy and society.

However, there were concerns both among procurement authorities and industry as to whether a so-called big bang approach to the inclusion of societal criteria in procurement could be introduced overnight. This might be considered as too administratively costs and burdensome to implement, without both contracting authorities and manufacturers first gaining some familiarity with regard to how to integrate such criteria and to monitor and report on the implementation of these criteria first.

Option 2 – Mandatory approach with the inclusion of limited societal criteria, but with promotion of voluntary approach to mainstreaming the inclusion of other societal criteria

Some interviewees made the suggestion that since work has already been undertaken in the field of LCA in procurement, and eco-design in the space field that the environmental criterion offers greatest scope for the early introduction of at least one societal criterion on a mandatory basis.

Alongside having one (or more) mandatory criteria, three possible sub-options were identified, firstly introducing one mandatory criterion, but supplementing this by including further criteria on a voluntary basis. A second sub-option would involve mainstreaming such criteria, or a third sub-option could include both the voluntary inclusion of societal criteria and mainstreaming.

Option 3 – Voluntary approach to mainstreaming the inclusion of societal criteria

Although there are some similarities between the concept of the voluntary inclusion of societal criteria and mainstreaming, there are differences. A voluntary approach has already been adopted by ESA to certain aspects of space procurement. For example, in an ESA procurement for a satellite, it was recognised that it would be inappropriate to make the usage of green propellants a formal criterion since not all players on the market have developed such technologies. However, since it was known that at least some market participants already possess alternative technologies, it was mentioned in the Tender Specifications along the lines of “Where possible, tenderers are invited to take into consideration the possible use of greener propellants in proposing technical solutions”. Care was taken in avoiding making this a formal requirement since the overriding principles of public procurement relating to equity and fairness to all economic operators participating in the tender procedure must override other factors.


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Nevertheless, by encouraging prospective contractors to consider the use of new technologies, procurement can serve as an instrument to encourage further investment in innovation and in accelerating the development of more environmentally-friendly technologies in the space sector. Even if non-mandatory, this could serve as an incentive for the private sector to innovate.

Annex 2 - Bibliography

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During the study, documentary sources were identified and reviewed. A bibliography indicating the studies consulted during the study assignment is provided. A short description of each study, and indication of the relevant to the present study is provided.

Previous relevant studies

EU legal framework on public procurement, including programmatic documents

Document title Short description Relevance to the study

Regulation (EU) No 377/2014 of the European Parliament and of the Council of 3 April 2014 establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010

Sets out the programme’s regulatory framework and the types of services that will be supported through Copernicus in the 2014-2020 period.

Since Copernicus is one of the three key EU space programmes (alongside Galileo and EGNOS), the Copernicus Programme Regulation forms part of the overall picture. Unlike Galileo, in Copernicus procurement, satellites can be procured from any country globally, depending on the most economically advantageous tender, since there are no security concerns.

REGULATION (EC) No 683/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 9 July 2008 on the further implementation of the European satellite navigation programmes (EGNOS and Galileo)

The previous regulatory framework pertaining to the implementation of EGNOS and Galileo established a framework for protecting Europe’s strategic independent capabilities in security-sensitive areas. It establishes the fact that procurement in GNSS is subject to different procurement rules compared with other areas of EU procurement.

The framework put in place is of interest since it sets out the parameters for carrying out GNSS procurements in Europe, which are confined to European economic operators. This means that the WTO rules are not applicable in key areas of EU space procurement.

EU Financial Regulation Sets out the financial and administrative rules to be applied during EU public procurement procedures.

Whilst there are some exceptions to EU public procurement rules in some areas of the EUSP (notably due to the security-sensitive nature of the GNSS programmes), the procurement teams responsible follow the detailed rules on public procurement set out in the EU Financial Regulation, as well as the general principles in the revised 2014 public procurement Directive (Directive 2014/24/EU).

Directive 2014/24/EU. The objective of the EU public procurement rules is to open up the public procurement market and to ensure the free movement of supplies, services and works within the EU. In most cases, this requires competition, although there are exceptions in some areas within the EU space programmes field due to security considerations.

The revised 2014 Directive on EU public procurement allows greater scope for the inclusion of societal criteria and also encourages procurement to be used as a mechanism to foster innovation.


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Pre-commercial Procurement for Innovation

Review of Pre-commercial Procurement Approaches and Effects on Innovation: Compendium of Evidence on the Effectiveness of Innovation, Policy Intervention, 2013 John Rigby, Manchester Institute of Innovation Research, Manchester Business School, University of Manchester.

Considers different approaches to PCP, including the role of PCP as part of demand-side innovation policy measures.

Explains the role of PCP prior to the procurement of innovation of existing goods and services (for which the public procurement directive is the legal framework).

Examines different PCP approaches and considers some of the evidence as to the effectiveness of different PCP approaches both internationally and in the US. Provides examples of the catalytic procurement effect of PCP. Also notes differences between the EU and US regulatory frameworks in that in the EU, it is not possible to favour SMEs to the exclusion of large industry players.

Pre-commercial Public Procurement - A missing link in the European Innovation Cycle: Public Needs as a driver for innovation, 2014, Lieve Bos and Stephan Corver, DG INFSO.

Outlines the role of PCP as an innovation driver.

http://inspirecampus.eu/wp-content/uploads/2014/09/bos_corvers_ta_5_20061_def1._version11.pdf

Introduces concepts such as the role of PCP in promoting a risk-sharing approach to innovation i.e. with shared R&D risks and benefits for contracting authorities, industry and SMEs.

Policy related Frequently Asked Questions on Pre-Commercial Procurement (PCP) and the link with Public Procurement of Innovative Solutions (PPI), 2014

Explains the role of R&D procurement and examines different types of such procurement.

Reviews some of the earlier work undertaken at EU level to promote the use of PCP dating back to 2007.

Space debris removal – costs estimates

Analyzing Costs of Space Debris Removal in Basis of Three Kinds of Methods. July 2017, DOI: 10.5539/ijef.v9n8p151

The costs of the three most common methods of debris removal are considered (ground-based laser removing, water jet cutting and net-capture) for removing the debris. The Monte Carlo method was then used to simulate the space debris’ number and speed. Models were then built for the three common methods respectively, explored the removing efficiency of different size of debris and their cost for removing a unit volume of the debris.

https://www.researchgate.net/publication/318559343_Analyzing_Costs_of_Space_Debris_Removal_in_Basis_of_Three_Kinds_of_Methods

Findings in respect of costs are presented based on the size of space debris.

The laser removing method was found to be suitable for medium-sized debris with a diameter of less than 10cm, the water jet method is suitable for large-sized debris with the diameter within 10cm and 1400cm, the net-capture method was found to be suitable for removing large-sized debris with a diameter bigger than 1400cm.

Cost estimation of active debris removal, 2014, Eugen Schulz, Vitali Braun and Carsten Wiedemann

The number of debris objects on some low Earth orbit (LEO) regions is high. There is a certain possibility that objects may collide with each other. Huge spent satellites or upper stages can be destroyed so that new debris is created. The new debris may in turn trigger further

Deriving cost benchmark data on the costs of ADR technologies.

Cost drivers are derived from the mission requirements for an active removal. The costs for development and production of the satellite hardware as well as for operations are estimated. A long-term simulation of










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catastrophic collisions. Simulations show that an instability may exist in the LEO population. Active removal of existing objects may be necessary for high-risk debris.

A removal satellite would be required for removal missions which would have to perform a rendezvous manoeuvre, a docking with the target object, and a direct de-orbiting of the target.

https://www.researchgate.net/publication/286808269_Cost_estimation_of_active_debris_removal

the space debris environment is carried out. The results with or without active removal technologies being deployed are examined. The costs of both scenarios are compared.

Cost analysis of active debris removal scenarios and system architectures, Toru Yamamoto, Hiroyuki Okamoto,Satomi Kawamoto, Japan Aerospace Exploration Agency, 2017

Considers how much it costs to actually implement ADR. Takes into consideration the many parameters that make up the ADR scenario. The parameters include, for example, the number of target debris, the mass of debris, the trajectory distribution of the target debris group, the number of removed debris per ADR satellite, the type of removal device and propulsion system, and the launch system.

https://conference.sdo.esoc.esa.int/proceedings/sdc7/paper/660

Models the ADR scenario and considers the trade-off between costs and benefits. Presents the results focusing on the extent of trade-off in removing large debris in the crowded low earth orbit. Furthermore, discusses ADR scenario and system architecture, and considers which are most advantageous in terms of their cost and feasibility.

Active Debris Removal and the Challenges for Environment Remediation by JC Liou NASA Orbital Debris Program Office, 2012

The targets identified for removal are those with the highest mass and collision probability products in the environment. Many of these objects are spent upper stages, with masses ranging from 1 to more than 8 tonnes. To remove five objects on an annual basis cost-effectively, represents challenges in terms of technology development, engineering, and operations.

https://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa.gov/20120013266.pdf

Outlines the need to move from environmental modelling to actual ADR missions. "Commonly-adopted mitigation measures will not be sufficient

to fully control the debris population growth in LEO. As the international community gradually reaches a consensus on the need for ADR, the focus will shift from environment

modelling to completely different challenges – technology development, system engineering, and operations".

Societal criteria in public procurement (general)

Study on Strategic use of public procurement in promoting green, social and innovation policies, 2015

Takes stock of experiences in integrating green, social and innovation considerations in public procurement policy, processes and practices in 10 selected Member States (MS).

Only a limited number of studies have considered green, social and innovation policies at EU level and analysed the extent to which these cross-cutting issues are taken into account in current procurement contests.

Buying social, A guide to taking account of social

Study stresses the need to make a high-level political commitment and

Provides an overall framework and guidance document to SRPP.










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considerations in public procurement

The EC Guide on Socially Responsible Public Procurement (SRPP) - June 2011

leadership for the inclusion of socially-responsible public procurement (SRPP). Outlines the potential benefits of SRPP and the legal and policy approaches currently in the EU to this concept. Study was undertaken through Programme for Employment and Social Solidarity PROGRESS (2007-2013).

However, would need to be customised to include greater consideration of environmental, knowledge, economic and financial impacts, not only social inclusion and employment.

Study on Assessment of impacts on European space industry of the implementation of the EU Directives on public procurement and defence procurement rules, 2015

Study for the EP examines the state of play in the implementation of the Directive 2009/81/EC on defence and security procurement (Part.1) and the Directive 2009/43/EC on intra-European Union transfers of defence-related products (Part 2). It undertakes a first assessment of national practices, through qualitative and statistical analysis.

May provide a benchmark that could be adapted from the defence to the space sectors since concerns procurement rules.

Anchoring the innovation impacts of public procurement to place: the role of conversations

publication (27/01/17) in Environment and Planning C: Politics and Space

Elvira Uyarraa, Kieron Flanagana, Edurne Magrob,c, Jon Mikel, Zabala-Iturriagagoitiac, Manchester Institute of Innovation Research, Alliance Manchester, Business School, University of Manchester (UK)

https://www.research.manchester.ac.uk/portal/files/51339875/PPI_EPC_final_accepted.pdf

Innovation is one of the areas where there is scope to include consideration under the revised EU public procurement Directives.

Low Carbon Green Growth Roadmap for Asia and the Pacific - Green public procurement

Outlines the strengths of green public procurement and provides examples of country experiences, such as green procurement in Japan. Also describes green public procurement laws in Asia.

https://www.unescap.org/sites/default/files/33.%20FS-Green-Public-Procurement.pdf

Delivering social benefits through public procurement: A Toolkit 2010

Invest Northern Ireland, 2010

Describes the different benefits of integrating social criteria in public procurement. Also describes the way in which such considerations may be integrated at each stage in the procurement process (e.g. before Advertising, First








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Notification, Tender Documents, Evaluation, Contract and Managing, Monitoring and Reporting).

Sustainable Procurement, World Bank 2016

Includes chapters such as introducing Sustainable Procurement (SP) into the procurement process. SP is an approach through which economic, environmental, and/or social factors can be more fully taken into account when determining which bid/proposal is selected for a specific requirement.

Potential case study – analogous to objectives in space programmes of strengthening attention to environmental and social factors.

Public Procurement of Innovation

Guidance for public authorities

By the PPI Platform Consortium

http://www.innovation-procurement.org

There is an innovation partnership procedure relevant to PPI in the 2014 Procurement Directives. A further legal development noted is the ability to apply environmental and social criteria and take life-cycle costs into account

Relevant to socially responsible public procurement.

Guide to socially responsible public procurement, Finland, December 2017

http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/160318/TEM_oppaat_12_2017_guide_to_socially_responsible_EN_web_21112017.pdf

Relevant to socially responsible public procurement.

Cost-benefit assessments of the socio-economic impacts of the upstream and downstream space sectors

PwC for the European Commission, Copernicus Ex-ante Benefit Assessment Report, 2017

Examines the costs and benefits of Copernicus including the development of downstream space-based data, applications and services. Presents an assessment of the overall economic impact derived from public spending on the Copernicus programme.

Useful benchmark data in respect of the overall economic impacts of Copernicus and impacts on different sectors.

Provides a methodology for quantifying the socio-economic benefits.

Study to examine the GDP impact of space activities in the EU for the European Commission. September, 2015.

This study focused on the GDP impact of EC & ESA spending on the Copernicus Space component over the period 2008 – 2013.

Provides a methodology for quantifying the socio-economic benefits.

PwC for the EC, The Study on the socio-economic benefits of Copernicus, 2016

Study to examine the socio-economic impact of Copernicus in the EU which also reports on the Copernicus downstream sector and user benefits. This study focused on the socio-economic impacts of freely available and open Copernicus data & products in Europe. The project analysed the use of Copernicus data along eight sectoral value chains: agriculture, ocean monitoring, insurance, O&G,

As above

http://www.innovation-procurement.org/

http://www.innovation-procurement.org/







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renewable energies, urban monitoring, air quality monitoring and forestry.

PwC for the EC, Copernicus Market Report, 2016

Market Report summarizes the main findings from two studies, prepared by PwC for the European Commission and published in 2016: (1) The report on the Copernicus downstream sector and end user benefits, and (2) The report on the socio-economic impact of Copernicus.

As above

Technopolis and VVA for the EC, Ex-Post Evaluation of the European Earth Monitoring Programme (GMES) and its Initial Operations (2011- 2013), GMES Preparatory Actions and FP7 Funded GMES Space Component, 2016

Evaluated GMES Initial Operations during its initial phase of implementation from an ex-post perspective.

Useful in examining the extent of interest in the uptake of GMES data and services by end-users.

CSES - for the EC, Interim Evaluation of the European Earth Monitoring Programme (GMES) and its Initial Operations (2011- 2013) and Evaluation of the GMES Preparatory Action.

Evaluated GMES Initial Operations during its initial phase of implementation from an interim perspective. An Evaluation of the GMES Preparatory Action was also part of the contract.

Useful in examining the extent of interest in the uptake of GMES data and services by end-users.

Booz & Company, Evaluation of socio-economic impacts from space activities in the EU, 2013

Consolidates more than 200 reports and studies has been conducted with the objective to produce a compendium of examples, figures and indicators appraising socio-economic impacts from space activities in the EU. This review clearly demonstrates that public investments in the space sector result in sizable socio-economic benefits for Europe. Indeed, all available data gathered consistently indicate a positive correlation between public investments in the space sector and beneficial socio-economic impacts for Europe at large. https://publications.europa.eu/en/publication-detail/-/publication/b3c64cf6-3caa-4f46-b6cc-a69c3b583cc5/language-en

Synthesises many previous attempts to assess socio-economic impacts from space activities in the EU.

Commission SWD, Regulation on establishing the European Earth Observation Programme (Copernicus)

Proposal for a Regulation of the European Parliament and of the Council establishing the Copernicus Programme and repealing

Summary of programme objectives & socio-economic benefits of Copernicus on downstream services.

https://publications.europa.eu/en/publication-detail/-/publication/b3c64cf6-3caa-4f46-b6cc-a69c3b583cc5/language-en





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Impact Assessment and ex ante evaluation, 2013

Regulation (EU) No 911/2010 {SWD(2013) 190 final} {SWD(2013) 191 final}

SpaceTec Partners, European Earth Observation and Copernicus Midstream Market Study, 2013

The primary objective of this study is to evaluate the potential impact of the Copernicus programme on the EO midstream data market, with a focus on the competitiveness effects arising from the “free and open” data policy of Copernicus.

Examines the socio-economic benefits of Copernicus on downstream services.

Commission SWD, accompanying the Commission Communication on "Global Monitoring for Environment and Security (GMES): Challenges and Next Steps for the Space Component", Impact assessment, 2009

Commission SWD and Impact Assessment. Accompanying the Copernicus Programme Proposal Impact Assessment accompanies the legislative proposal for the new programming Regulation As the existing Regulation concerned the initial operations period and runs until 2013, there is a need for a new Regulation and for a new impact assessment.

Sets out underlying rationale for a fully-fledged Copernicus Programme following GMES Initial Operations.

Contains some statements regarding possible socio-economic benefits

PwC, Socio-Economic Benefits Analysis of GMES, 2006

A consortium led by Price Waterhouse Cooper, including ESYS and Det Norsk Veritas, has analysed the potential Socio-Economic Benefits of the GMES for the period 2006-2030.

Socio-economic benefits of Copernicus on downstream services.

Public Procurement for Innovation - Good Practices and Strategies, the OECD.

Public procurement offers an enormous potential market for innovative products and services. Used strategically, it can help governments boost innovation at both the national and local level and ultimately improve productivity and inclusiveness. Based on good practices in OECD and partner countries, this report analyses the state of play of procurement for innovation. http://www.oecd.org/gov/public-procurement-for-innovation-9789264265820-en.htm

PPI is an important aspect of looking at the benefits of strategic public procurement on innovation.

Mid-term review of Galileo and EGNOS programmes and European GNSS Agency

The evaluation covers the period 2014-2016, focusing on the implementation of the GNSS and GSA regulations, which entered into force in December 2013 and April 2014 respectively.

The evaluation covers the progress made at the level of space and ground segments deployment, system operations, services provision and downstream market

Examines the programmes’ principal achievements - major milestones have been set for the evaluation period e.g. declaration of initial services and utilisation of Ariane V launcher for Galileo and declaration of LPV-200 services level for EGNOS) with no budget overruns

http://www.oecd.org/gov/public-procurement-for-innovation-9789264265820-en.htm




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development against four evaluation criteria (effectiveness, efficiency, coherence, EU Added Value), and a specific evaluation of the GSA performance.

PwC for the European Commission, Assessment of the International Competition and State of the Internal Market for Space-Based Applications and Services, November 2016.

The study considered issues such as overcoming barriers specific to space markets, new business models, establishing the space business ecosystem and boosting entrepreneurship

smart financing, and the economic effects of Space-Based Applications and Services.

The Case for Space: The Impact of Space Derived Services and Data. Final Report - July 2009

Commissioned by South East England Development Agency (SEEDA)

Sets out an approach to measuring the impact of the space industry. Also stresses linkages between upstream and downstream.

Space-derived services and data and the economic downstream impacts

Assessment of the Impacts on the European Space Industry of the Implementation of the EU Directives on Public Procurement and Defence Procurement Rules, January 2015.

The impact of this Directive was already mentioned in our background and understanding section. An evaluation has been undertaken. This found that the aerospace sector is benefiting significantly from defence contracts. It also listed a number of general challenges, some of which are relevant when considering the potential need for a dedicated regulatory approach to space procurement.

The importance of the EU Directives on Public Procurement in Defence was mentioned in the European Space Industrial Strategy.

Space Industry’s Impact on the California Economy, AT Kearney consultants.

Measurement tools to assess the impact of the economy. https://aerospacedefenseforum.org/wp-content/uploads/2012/03/CA-Space-Industry-Economic-Impact.pdf

Measurement tools will be needed for the quantification of costs and benefits (including impacts).

A review of Dutch policy for socially responsible public procurement

https://www.somo.nl/wp-content/uploads/2014/03/A-review-of-Dutch-policy-for-socially-responsible-public-procurement.pdf

Environmental and social criteria in Swedish public procurement of wood-based products

https://www.upphandlingsmyndigheten.se/globalassets/publikationer/msr/miljo-och-sociala-kriterier-i-offentlig-upphandling-av-trabaserade-produkter.pdf

https://aerospacedefenseforum.org/wp-content/uploads/2012/03/CA-Space-Industry-Economic-Impact.pdf
















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The Cost of Different Goals of Public Procurement -

http://www.konkurrensverket.se/globalassets/english/publications-and-decisions/the-cost-of-different-goals-of-public-procurement.pdf . Considers different dynamics in terms of the role of public procurement as a policy tool

http://www.konkurrensverket.se/globalassets/english/publications-and-decisions/the-cost-of-different-goals-of-public-procurement.pdf





Annex 3 - List of interviews

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No. Organisation Type of stakeholder

1 ESA European Space Agency





6 EC DG GROW EU institution






12 EC JRC EU institution

13 EUMETSAT Association in field of space and society

14 UMETSAT Association in field of space and society

15 UMETSAT Association in field of space and society

16 RUAG Space industry

17 RUAG Space industry

18 Andritz Group Space industry

19 Atos Space & Avionics Space industry

20 ENPULSION Space SME

21 ENPULSION Space SME

22 EURISY Association in field of space and society

23 Swedish National Space Agency National Space Agency

24 Danish Space Research Institute National Space Agency

25 AUSTROSPACE Space industry association

26 AAC Aerospace & Advanced Composites Space SME

27 EOX IT Services Space SME

28 SME4Space Space industry association

29 Space Biz PL Space industry association

30 German Aerospace Center - Earth Observation Center

National Space Agency

31 Jena-Optronik GmbH Space industry

32 Jena-Optronik GmbH Space industry

33 MT Aerospace AG Space industry

34 OHB Germany Space industry

35 VARIO Innovation association

36 EARSC (European association of companies operating in the field of remote sensing)

Space industry association

37 CNES - Centre National d'Études Spatiales National space agency

38 CERN Other science organisations (for case studies)

39 Picosats Space spin-off

40 Aviospace Space SME

41 Thales Alenia Space SpA - Rome Space industry


43 Distretto Tecnologico Aerospaziale (Apulia) Technological district


45 NASA National space agency (for case study)

46 Media Lario S.p.A. Space SME

47 D-Orbit Space SME

48 Airbus Defence and Space Space industry

49 OHB Italia SpA & Consorzio Antares Space industry


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No. Organisation Type of stakeholder

50 Exprivia spa Space industry

51 OHB Italia SpA Space industry

52 Telespazio S.p.A Space industry


54 Telespazio S.p.A VEGA Space industry

Annex 4 – Scenario 1: Problem definition – space debris (detailed assessment).

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The more detailed problem definition presented below relating to space debris is designed to support the assessment of the first scenario.

Regarding the scale and magnitude of the problem, according to ESA’s Clean Space Unit, there are approximately 8,000 tonnes82 of space satellites and space debris due to break-ups and collisions. It is necessary to distinguish between small and large space debris, since both pose significant problems, but the types of problems vary. The challenges posed by Space debris are, indeed, not new. The dangers of runaway debris production and exponential collision rates in LEO was first identified in 1978. This effect was named the Kessler Syndrome, and over the forty years since, the cumulative effect of increased Space activity has increased the likelihood of it much further.

As of January 2018, there were approximately 1,894 active satellites orbiting the Earth83, a handful of additional functional spacecraft, such as the International Space Station (ISS) and vehicles that ferry to and from it, a significant number of inactive satellites no longer under control (approx. 2500), and a large number of catalogued debris (approx. 21,600) directly resulting from Space missions such as discarded rocket bodies used to place satellites into orbit, mission-related debris released from satellites, and fragmentations debris that are the result of satellite breakups/explosions and collisions.

The figure below shows the increase in the population of space objects orbiting the Earth, as catalogued by the US space surveillance system (public catalogue). Alongside the quasi-linear gradual increase in objects over time, two events exacerbated the Space debris situation and can clearly be seen in the figure: the anti-satellite Chinese mission test in 2007 and the in-orbit collision of Iridium 33 and Cosmos-2251 in 2009. Note that the public version of this catalogue excludes US military satellites and other objects, which are not reported for defence and security reasons.

Number of catalogued civil space objects, including debris Source: U.S. Space Surveillance Network

82 http://www.esa.int/spaceinvideos/Videos/2017/11/ESA_Euronews_Space_debris 8,000 tonnes was the estimate made in November 2017. 83Satellite database of the Union of Concerned Scientists available at https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database

http://www.esa.int/spaceinvideos/Videos/2017/11/ESA_Euronews_Space_debris

https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database

https://www.ucsusa.org/nuclear-weapons/space-weapons/satellite-database


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Currently, Europe contributes approximately 4-5% of the overall catalogued debris population84 and owns 21% of the active space assets in orbit (see Error! Reference source not found.).

European share of catalogued debris and active satellites (as of January 2018)

The vast majority of Space debris are not in deep-space but are in the most commercially exploitable areas of the outer Space. These include the Geostationary Earth Orbit (GEO) mainly used for satellite telecommunications, the Medium Earth Orbits (MEO) used for satellite navigation constellations, and especially the Low Earth Orbits (LEO) with a plethora of uses, including earth observation. The following table shows the large discrepancy between the number of active satellites in orbit, compared with the total number of catalogued objects in that orbital region.

Current number of catalogued debris and active satellites per Space region85

Space region (altitude) Active Satellites Total Catalogued Objects86

LEO (100km to 2000km) 1071 17800

MEO (2000 to 36000 km) 97 2958

GEO (36000 km) 531 783

Total 1894 21600

In general, state-of-the art surveillance systems can detect and track debris of 5-10 cm in diameter or more in LEO, and 30 cm to 1 m in GEO. As much of the debris population is smaller than these thresholds (particularly that generated by collision or explosion), the vast majority of Space debris (approximately 98%) cannot be monitored by current surveillance systems. As a result, Space agencies and satellite operators must rely on simulations and models to estimate where these small debris exist. Current estimations put the number of Space debris objects larger than 1 cm at over

84 Based on figures from the U.S. Space Surveillance Network 85 There exist objects in other geocentric orbits not included here for ease of comparison 86 Catalogued objects taken from ESA’s Annual Space Environment Report, Issue 2


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750,000. This number is also set to rise. An estimation using ESA Master in 2009 (shown below) estimated that the 1 million debris mark would be broken by around 2022.

Growth of partially traceable debris to 2030 – based on ESA Master 2009 model

Debris of all sizes can cause significant damages, due to the potentially high relative velocities involved. At large relative velocity, debris of 1 cm can cause complete satellite loss. The link between object size and damage caused is summarised below.

Summary of object surveillance limitations for collision avoidance manoeuvres and satellite loss probability due to collision

As noted in the above table, certain areas of a satellite can be protected by systems such as debris shields; however even with state-of-the art shielding, debris above 1cm in diameter can still be fatal. In case of objects large enough to be monitored, the only effective measure is to perform a collision avoidance manoeuvre. However, such a manoeuvre requires time and propellant. If frequent manoeuvring is required, this can be a significant drain on costly mission resources.

The dawn of LEO mega-constellations and an increasing number of small satellites will crowd the most populated orbits even further. Many of the planned satellite constellations have a focus on reliability by constellation volume rather than inherent unit reliability. Furthermore, the adherence to Space

0

200000

400000

600000

800000

1000000

1200000

2010 2015 2020 2030

Projected number of space debris objects >1cm

Debris Definition Catalogued through surveillance

Estimated population

Satellite defensive measure

Satellite collision impact risk

Traceable Greater than 5-10 cm

Partially ~21,600 catalogued

~26,460 total

Collision avoidance manoeuvre

Complete satellite loss

Potentially traceable

Between 1cm and 10 cm

Not completely catalogued, mostly statistical data

Approx. 767,000

Shields effective up to 1 cm, then no defensive measure

Complete or partial satellite loss

Untraceable Between 1mm and 1cm

Not catalogued, statistical data only

More than 160 million

Shields effective up to 1 cm

Satellite degradation, loss of sensors or subsystems


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mitigation efforts of the mega-constellations and small satellites is not clear. While these shifts may make short-term economic sense, it will likely lead to a significant increase in the number of defunct objects in orbit.

The risk generated by Space debris to wider society should, thus, not be underestimated. Space activity is an important economic and social driver, leading to increases in productivity and offering valuable services to terrestrial users. Space services are also involved in terrestrial critical infrastructure. The UK Space Agency produced a report in 2017 outlining the effects on the UK economy of a loss of GNSS services (RD18). Earth observation data such as that from Copernicus is critical in areas such as air quality monitoring, natural disaster response and urban monitoring. A loss of Space-based telecommunication systems would have immediate and sizeable negative consequences.

ESA has played a leading role in Space debris mitigation efforts, such as in the definition of the European Code of Conduct for Space Debris Mitigation (RD15). The ESA Clean Space Initiative aims to take these efforts further, by delivering a set of means to actually mitigate the presence and production of Space debris.

The 2009 collision of an operational Iridium communications satellite with a retired Russian Cosmos spacecraft highlighted the dangers of satellites and spacecraft at their end of life to operational missions. Subsequently, Envisat ("Environmental Satellite"), an 8-tonne EO satellite operated by ESA stopped functioning in 2012 (after 10 year of operations), following the unexpected loss of contact with the satellite. This was the precursor to the new generation of Copernicus sentinels. It remains a large inactive EO satellite since it is still in orbit, but unresponsive. Given Envisat's orbit and its area-to-mass ratio, it has been estimated that it will take about 150 years for the satellite to be gradually pulled into the Earth’s atmosphere87. This demonstrates the importance of putting in place effective space debris mitigation measures in the EUSP, as part of effective risk mitigation and for reputational management, and to avoid the loss of socio-economic benefits for Europe in having continued access to operational EO and navigational services. Whilst Copernicus is based on 6 sentinels active for 7.5 years each over the 20-year planned duration of the programme, the failure of individual sentinels may not be detrimental to continuing operations, but would have adverse consequences, such as posing a future increased risk of space collisions.

If no mitigation measures are adopted to tackle the problem, then it is expected that the number of objects in space in different orbits (LEO, MEO and GEO) would increase substantially between now and 2210.

87 https://spacenews.com/envisat-pose-big-orbital-debris-threat-150-years-experts-say/

https://spacenews.com/envisat-pose-big-orbital-debris-threat-150-years-experts-say/


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Non-mitigation projection (averages and 1- δ from 100 MC runs)

Source: Active Debris Removal and the Challenges for Environment Remediation by J.-C. LIOU. NASA Orbital Debris Program Office, NASA Johnson Space Center, Houston, Texas, US

Regarding the importance of the removal of large space debris, ESA has pointed out that “the removal of mass (5–10 large objects per year) from regions with high object densities and long orbital lifetimes may be necessary to stabilise the growth of the space debris population”88. Even in orbits that are less needed for the orbit of operational satellites, a long-term approach is needed to tackle the problem of such debris, since space debris remains present for decades. Generally, the higher the altitude, the longer the space debris will remain in orbit. Typically, orbital debris left in orbits below 600 km normally return back to Earth within several years. However, at altitudes of 800 km, the orbital decay lasts decades and above 1,000 km, debris are not expected to fall back to Earth before a century or more.

ESA has pointed out that the problem is likely to get worse unless active remediation measures are adopted. The rate of launches a year globally is currently 70–90, but with an increasing trend towards launches of many small satellites into orbit at once, this could mean that “future break-ups will continue at mean historical rates of four to five per year, the number of objects in space is expected to increase steadily”89. It should be noted however that small satellites do not currently constitute part of the EUSP, since larger satellites are needed for Galileo and Copernicus.

Small, fragmented space debris can also cause significant problems in terms of the risks of collision posed to other satellites and spacecrafts but also more generally an unsafe environment in particular orbits. According to ESA, "the consequences of meteoroid and debris impacts on spacecraft can range from small surface pits due to micrometre-size impactors and clear-hole penetrations for millimetre size objects, to mission-critical damage for projectiles larger than 1 cm”90.

Given the high speed at which such debris moves, there remain technical challenges in capturing and successfully removing space debris, with a need to develop suitable technologies capable of doing so. However, there is a lack of a dedicated funding programme, even within ESA. Although work has been undertaken by ESA to promote the development of Active Debris Removal (ADR) technology

88 http://www.esa.int/Our_Activities/Operations/Space_Debris/Mitigating_space_debris_generation 89 Idem. 90https://www.esa.int/Our_Activities/Operations/Space_Debris/Hypervelocity_impacts_and_protecting_spacecraft

http://www.esa.int/Our_Activities/Operations/Space_Debris/Mitigating_space_debris_generation

http://www.esa.int/Our_Activities/Operations/Space_Debris/Mitigating_space_debris_generation

https://www.esa.int/Our_Activities/Operations/Space_Debris/Hypervelocity_impacts_and_protecting_spacecraft


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development to develop ADR capabilities in Europe has been funded until now through the general ESA budget. There is however a dedicated ADR mission, which is planning the world’s first-ever space debris removal mission in 2023 (described in further detail later in this scenario).

An article from the US points to the urgent need to tackle space debris, pointing to the growing scale of the problem. The US Space Surveillance Network “tracks more than 21,000 orbiting items larger than 10cm in low Earth orbit (LEO) and 30cm in geostationary orbit (GEO). Operational satellites represent only 6% of the catalogue’s orbital population. The 38% is attributed to large space debris such as derelict spacecraft and upper stages of launch vehicles, carriers for multiple payloads and mission-related items, while the remaining 56% has been produced by more than 200 in-orbit fragmentations”91.

NASA has estimated an even greater volume of “space junk,” with more than 500,000 pieces of debris (of which 20,000 pieces of debris larger than a softball), tracked as they orbit the Earth. NASA notes92 that “such junk travels at speeds of up to 17,500 mph, fast enough for a relatively small piece of orbital debris to damage a satellite or a spacecraft. The rising population of space debris increases the potential danger to all space vehicles”.

91 http://www.spacesafetymagazine.com/space-debris/mitigation/ 92 https://www.nasa.gov/mission_pages/station/news/orbital_debris.html

http://www.spacesafetymagazine.com/space-debris/mitigation/

https://www.nasa.gov/mission_pages/station/news/orbital_debris.html

Annex 5 – Ecodesign

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In this Annex, a summary of the progress made to date in respect of the integration of ecodesign principles into the EUSP is provided. Key issues are also examined.

Eco-design – reducing toxicity and other harmful effects

Whilst there are medium levels of awareness about the problem of space debris in the European space industry, there is less awareness about eco-design principles. ESA’s Clean Space unit has carried out a lot of work to strengthen industry’s understanding as to how eco-design principles could be incorporated into satellite design and the procurement of upstream space infrastructures93.

Accordingly, ESA committed to establishing a Common eco-design framework for the European space sector94, including the development of tools and systems to evaluate the environmental impact, and to assess the compliance of ESA programmes with relevant EU legislative requirements, such as the REACH Regulation and RoHS Directive.

ESA has already developed Guidelines on Ecodesign in the space context95 and has organised training on ecodesign and LCA for the European space industries in December 2018. In other sectors, the focus of eco-design work has been on examining the energy performance of different product groups, and on assessing the adverse impacts of particular product groups on climate change and on developing implementing regulations to strengthen energy efficiency. In the European space sector, ESA notes that the term is associated beyond energy efficiency to include broader environmental impacts such as: climate change; ozone depletion; resources depletion; and human and environmental toxicity.

ESA has committed to using information gathered through monitoring and evaluation of compliance with existing EU legislation and international requirements (e.g. the REACH Regulation, Montreal Protocol on Substances that Deplete the Ozone Layer) as the first step in assessing whether greener technologies could be introduced and to encourage R&D to develop alternatives to existing chemicals, materials, metals and coatings, wherever their toxicity or other harmful potential effects requires consideration of potential substitutions.

However, there may be challenges in replacing existing materials and metals used in satellites since there may be a lack of suitable alternatives that perform as well, or new technologies being insufficiently qualified or proven to be used in an operational space programme96. Examples are now provided:

• The metal titanium is used in satellite manufacturing, since it is a high-quality and strongly-performing, light-weight material. It therefore continues to be used even if it does not burn up on re-entry97 and it poses toxicity concerns.

• There is a similar trade-off between achieving high-performance in a space environment, and the toxicity of coatings used in manufacturing space satellites and safety for humans.

The nature of developing satellite and launching a satellite mission in a space environment may require tougher coatings and stronger materials and metals compared with a terrestrial environment,

93 http://blogs.esa.int/cleanspace/category/ecodesign/ 94 https://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/ecoDesign 95 Developing a standardised methodology for space-specific Life Cycle Assessment - https://aerospace-europe.eu/media/books/CEAS2015_237.pdf and Julian Austin, European Space Agency, Clean Space Systems Engineer and EcoDesign handbook for a Life Cycle Assessment for space missions and activities 96 https://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/ecoDesign 97 https://www.newscientist.com/article/2121473-turn-satellites-into-sparkling-fireworks-to-burn-up-space-junk/ - a lot of space junk is made of titanium, which has a high melting point: about 1670 °C. Most satellites completely burn up in our atmosphere, but the titanium alloy pieces are more likely to survive re-entry. Even worse, some of these are aerodynamically shaped, making them more likely to reach the ground.

http://blogs.esa.int/cleanspace/category/ecodesign/

https://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/ecoDesign



https://www.esa.int/Our_Activities/Space_Engineering_Technology/Clean_Space/ecoDesign

https://www.newscientist.com/article/2121473-turn-satellites-into-sparkling-fireworks-to-burn-up-space-junk/


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given that missions last several years. “In Low-Earth Orbit at 400 km altitude, the space environment contains the full spectrum of solar energy, trapped protons, occasional high-energy protons from solar flares and atomic oxygen. High-energy protons can cause optical damage in the form of transmission loss (darkening) through ionization to coatings and optical materials located internally; the other forms are non-ionizing and affect exposed surfaces and materials such as those on solar-cell power generating panels. Observe that the fluence of electrons is relatively low” 98. Hence, robust optical coatings are needed. The various chromium coatings are among the most toxic, but were seen as necessary for operating in the aerospace industries. Similar issues may apply in relation to sealants. The choice of materials is also important in terms of the ability of particular materials to resist the space radiation environment.

A general observation that emerged from the case study research is that more environmental-friendly solutions are generally more costly than traditional ones. Nevertheless, an eco-design approach may help to consider the qualities, performance and reliability of particular metals and materials in a more holistic context, given the need to take into consideration the full costs associated with using metals and materials that pose environmental concerns, such as due to their toxicity.

98 Coatings Used in Space - Requirements and Solutions, Author: Samuel Pellicori and Materion Coating Materials News.