In July 2026, the United States Federal Aviation Administration published a proposed rule that would waive requirements under thirteen federal environmental and natural resource statutes for commercial space launch and reentry licensing actions. The proposal, issued in response to an executive order signed in August 2025, represents the most significant deregulatory move in American commercial space law in a generation. It also crystallises a tension that has been building for years at the intersection of space law and environmental governance: as the commercial space sector accelerates, the legal frameworks designed to govern it are being pulled in opposite directions — toward deregulation in the name of competitiveness, and toward stricter sustainability obligations in the name of orbital preservation.
This tension is not merely an American phenomenon. Across the major spacefaring jurisdictions — the European Union, the United Kingdom, Australia, Japan, and India — regulators are simultaneously streamlining licensing processes and tightening sustainability requirements. The result is a regulatory landscape of considerable complexity, where the rules governing a single commercial mission may span multiple national jurisdictions, several international frameworks, and an evolving body of technical standards that carry no formal legal force but exert enormous practical influence.
The Regulatory Architecture: A Patchwork Under Pressure
The foundational architecture of international space law was established in the 1960s and 1970s, when space was the exclusive domain of state actors. The 1967 Outer Space Treaty, the 1968 Rescue Agreement, the 1972 Liability Convention, and the 1975 Registration Convention together constitute the core of what lawyers call the "corpus juris spatialis" — the body of space law. These instruments were designed for a world of government-led exploration, not for a world of commercial operators launching hundreds of satellites per year and planning permanent lunar bases.
The mismatch between the foundational framework and the contemporary reality has driven a wave of national legislation. Italy recently adopted a comprehensive national space law introducing a formal licensing regime with clear liability, insurance, and sustainability obligations. The European Union is advancing its proposed EU Space Act, which aims to harmonise licensing, supervision, and space traffic management standards across Member States. The United Kingdom introduced regulatory measures in March 2026 to support in-orbit pharmaceutical manufacturing. Australia is pursuing reforms to modernise launch and reentry licensing for high-cadence operations.
Each of these national initiatives reflects a common recognition: the existing international framework is insufficient for the commercial space age, and states must fill the gap through domestic legislation. But the proliferation of national frameworks creates its own problems. A commercial operator launching from one jurisdiction, using components manufactured in another, and deploying satellites that will operate over the territory of dozens of countries must navigate a regulatory patchwork that was not designed for coherence.
The liability framework for space was designed for a world where states launched rockets. It was not designed for a world where private companies launch hundreds of satellites per year and plan to mine the Moon.
The FAA's Deregulatory Turn and Its Implications
The FAA's proposed environmental waiver rule deserves careful analysis, because it illustrates the broader tension between competitiveness and sustainability that defines contemporary space regulation. The proposal targets thirteen federal statutes, including the National Environmental Policy Act, the Endangered Species Act, and the National Historic Preservation Act. The FAA's argument is that these requirements create duplicative reviews that slow licensing without providing meaningful additional protection for public health, safety, property, or national security.
The liability framework for space was designed for a world where states launched rockets. It was not designed for a world where private companies launch hundreds of satellites per year and plan to mine the Moon.
The proposal is legally defensible — the FAA has statutory authority to waive requirements that it determines are unnecessary for its core mission — but it raises significant questions about the governance of space's environmental impacts. Launch operations have real environmental consequences: noise pollution, air quality impacts, habitat disruption near launch sites, and the growing problem of rocket exhaust in the upper atmosphere. By narrowing its review scope, the FAA is not eliminating these impacts; it is simply declining to assess them as part of the licensing process.
The FCC has taken a similar approach. In a 2026 decision regarding a demonstration satellite operated by Reflect Orbital Inc., the FCC authorised spectrum operations while explicitly declining to resolve broader objections related to astronomy, wildlife, and environmental impacts. The agency determined that such issues fall outside the scope of its communications licensing authority. The result is a regulatory landscape in which no single agency has comprehensive authority over the environmental impacts of commercial space operations — and in which operators can, in principle, obtain all necessary licences without any agency having conducted a holistic environmental review.
This approach has a certain administrative logic: agencies should focus on their statutory mandates rather than expanding their jurisdiction into areas where they lack expertise. But it creates a governance gap that is particularly acute for novel mission types — in-orbit manufacturing, resource extraction, permanent infrastructure — where the environmental and social impacts are poorly understood and no existing agency has clear authority.
The Liability Problem: States, Companies, and the Accountability Gap
The 1972 Liability Convention assigns liability for damage caused by space objects to the "launching state" — the state that launches or procures the launch of a space object, or from whose territory or facility a space object is launched. This state-centric liability regime made sense in 1972, when all space activities were conducted by governments. It makes considerably less sense in 2026, when the vast majority of space activities are conducted by private companies.
Under the current framework, if a commercial satellite operated by a private company causes damage to another satellite or to property on Earth, the liability falls on the state that licensed the operator — not on the company itself. States manage this risk through national licensing requirements, which typically include insurance mandates and indemnification agreements. But the adequacy of these requirements varies significantly across jurisdictions, and the international framework provides no mechanism for harmonising them.
Orbital sustainability has evolved from a voluntary aspiration into a core legal obligation — but the enforcement mechanisms to give that obligation teeth remain dangerously underdeveloped.
The liability problem is becoming more acute as the density of objects in low Earth orbit increases. By mid-2026, nearly 15,000 operational satellites were in orbit, and the ESA's 2026 Space Environment Report noted that the "Space Environment Health Index" had worsened by an order of magnitude in just one year. The risk of a self-sustaining cascade of collisions — the Kessler syndrome — is no longer a theoretical concern; it is an operational reality that space traffic managers must account for in their daily work.
Legal experts anticipate that future liability claims will test the limits of the existing framework, particularly regarding debris mitigation non-compliance and the responsibility for active debris removal. No liability claims for in-space collisions have yet succeeded, but the rising density of megaconstellations and the frequency of close approaches are expected to increase litigation risk significantly. The question of who bears the cost of active debris removal — the operators who created the debris, the states that licensed them, or the international community as a whole — remains unresolved.
Orbital sustainability has evolved from a voluntary aspiration into a core legal obligation — but the enforcement mechanisms to give that obligation teeth remain dangerously underdeveloped.
Proposals for Reform: Market-Share Liability and Codes of Conduct
Scholarly and policy discourse has explored several approaches to the liability gap. One proposal involves market-share liability regimes, under which states would contribute to debris cleanup funds based on the amount of debris for which they are responsible. This approach has the advantage of creating financial incentives for debris mitigation without requiring the attribution of specific debris to specific operators — a task that is often technically impossible for small fragments.
Another approach involves the development of codes of conduct that establish a standard of "good behaviour" for spacefaring nations and commercial operators. While codes of conduct are not legally binding, they can assist in determining fault in liability disputes by establishing what a reasonable operator would have done. The "Cologne Manual" on space traffic management and cybersecurity represents one such effort, providing non-binding guidelines that are increasingly referenced in national regulatory frameworks.
The EU Space Act, if adopted, would represent a more ambitious approach: a regional regulatory framework that harmonises licensing, supervision, and space traffic management standards across Member States, creating a level playing field for European operators and a more coherent interface with international governance processes. The Act's progress has been slower than initially anticipated, reflecting the political complexity of harmonising national space policies across 27 member states with very different levels of space activity.
The Sustainability Imperative: From Voluntary to Mandatory
Perhaps the most significant shift in space law over the past five years has been the transition from voluntary to mandatory sustainability requirements. The UN Committee on the Peaceful Uses of Outer Space adopted its Long-Term Sustainability Guidelines in 2019, establishing a set of voluntary best practices for debris mitigation, space traffic management, and the preservation of the space environment. These guidelines have been progressively incorporated into national licensing requirements, transforming what was once voluntary into what is now, in many jurisdictions, legally required.
The FCC's 2022 decision to reduce the post-mission disposal requirement for satellites in low Earth orbit from 25 years to 5 years was a landmark in this transition. The decision was controversial — some operators argued that the 5-year requirement was technically infeasible for certain mission profiles — but it established the principle that orbital sustainability is a regulatory obligation, not merely a best practice.
The ESA's "Zero Debris" initiative, launched in 2022 and progressively expanded, represents the most ambitious sustainability commitment in the industry. The initiative aims to eliminate the creation of new debris from ESA missions by 2030, through a combination of design requirements, operational practices, and active debris removal. Several commercial operators have adopted similar commitments, recognising that the long-term viability of their business models depends on the preservation of the orbital environment.
The proliferation of national space laws is a symptom of the international framework's inadequacy — and a reminder that governance gaps are always filled, one way or another.
The proliferation of national space laws is a symptom of the international framework's inadequacy — and a reminder that governance gaps are always filled, one way or another.
The Spectrum and Orbital Slot Problem
Beyond debris and liability, the commercial space sector faces a growing governance challenge around spectrum and orbital slots — the finite resources that determine where satellites can operate and how they can communicate. The International Telecommunication Union manages the allocation of radio frequency spectrum and the registration of orbital positions, but its processes were designed for a world of geostationary satellites, not for the megaconstellations of low Earth orbit.
The rapid expansion of megaconstellations — Starlink, Amazon's Kuiper, and their competitors — has created intense competition for spectrum and orbital positions. SpaceX's Falcon 9 launch schedule is reportedly fully booked through 2028 or 2029, and the company's Starlink constellation has grown to over 10,000 satellites with revenue reaching approximately $11.4 billion in 2025. Amazon's acquisition of Globalstar for over $11 billion secured a critical spectrum foothold for its Kuiper constellation. These commercial dynamics are reshaping the governance of spectrum and orbital resources in ways that the ITU's existing frameworks were not designed to handle.
Competition authorities are also beginning to scrutinise the space sector. Consolidation in the launch and satellite broadband markets has drawn the attention of regulators monitoring for market foreclosure and potential abuses of power regarding access to essential orbital slots and spectrum. The intersection of space law and competition law is an emerging frontier that will require new analytical frameworks and, potentially, new regulatory instruments.
The Path to Coherent Governance
The current state of space law — a patchwork of international treaties, national legislation, bilateral agreements, and voluntary guidelines — is not sustainable as the commercial space sector continues to grow. The proliferation of national frameworks creates regulatory arbitrage opportunities, where operators can choose the most permissive jurisdiction for their activities. The liability gap creates risks that are not adequately priced into commercial decisions. The sustainability requirements, while improving, remain inconsistent across jurisdictions and inadequately enforced.
The path to more coherent governance requires action at multiple levels. At the international level, the COPUOS process needs to be reinvigorated, with a mandate to develop binding instruments on the issues where voluntary guidelines have proved insufficient — particularly debris liability and space traffic management. At the national level, states need to ensure that their licensing frameworks are adequate to the risks of the commercial space age, including the environmental impacts that the FAA's proposed waiver rule would remove from review. At the industry level, operators need to recognise that the long-term viability of their business models depends on the preservation of the orbital environment, and to invest accordingly in sustainability practices.
None of this is easy. Space governance involves some of the most complex intersections of national sovereignty, commercial interest, scientific value, and long-term civilisational risk that any regulatory system has ever been asked to manage. But the alternative — allowing the governance gap to widen as the commercial space sector accelerates — is worse. The rules being written today, in FAA proposed rulemakings and EU legislative processes and COPUOS working groups, will shape the space environment for generations. They deserve more attention than they are currently receiving.
The commercial space age is not coming. It is here. The governance frameworks that will determine whether it unfolds sustainably or chaotically are being built — or not built — right now.
