In accordance with the Special Act on Establishment and Operation of the Korea AeroSpace Administration (the “KASA Act”), enacted on January 2024 as part of the Government’s initiatives to revitalize the aerospace industry, the Korea AeroSpace Administration (“KASA”) was established on May 27, 2024.
Further, the Government pre-announced a proposed partial amendment to the Space Development Promotion Act (the “Proposed Amendment” to the “SDPA”) on March 20, 2024, which is now expected to be proposed to the National Assembly. The Proposed Amendment intends to ease regulations on the aerospace industry, including the launch vehicle industry, and expand support for the sector. The key details and implications are as follows:
The Government has set its sights on becoming a “space economy global powerhouse by 2045,” as outlined in the “Space Economy Roadmap (November 2022)” and the “Fourth Basic Plan for Promoting Space Development (December 2022),” among other initiatives. As one of its key tasks, the Government is focusing on creating an ecosystem to foster the privately-led growth of the space industry, and in this regard, it announced (i) the “Plan to Strengthen Support for Building a Space Industry Ecosystem Led by the Private Sector” on March 13, 2024, and (ii) the “Proposed Implementation Plan for the Space Industry Cluster Vision” on March 14, 2024, respectively.
In particular, the Government’s plan to revitalize the space industry this year involves substantial changes in laws and policies related to the space satellite industry, including the (i) launch of KASA, (ii) promotion of the Tripartite Space Industry Cluster, and (iii) establishment of a roadmap for space exploration in Korea. Among these initiatives, the Proposed Amendment aims to facilitate the launch vehicle industry by easing regulations for repeated launches of space launch vehicles.
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1.
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Plan to Strengthen Support for Building Space Industry Ecosystem Led by Private Sector
The Ministry of Science and ICT (the “MSIT”) has gathered opinions from the space industry regarding obstacles that hinder building a space industry ecosystem led by the private sector. These obstacles include (i) restrictions for government-funded research projects, (ii) insufficient focus on private services in the satellite imaging industry, and (iii) difficulties in building track records for launch vehicle start-ups.
To address the above mentioned difficulties, the MSIT plans to develop the Third Space Industrialization Strategies (2024-2028) during 2024. Through these strategies, the MSIT seeks to (i) diversify the methods by which private space companies can participate in projects to provide more self-sustainability (other than Research & Development (“R&D”) agreements), (ii) expand the satellite imaging market to the private sector, and (iii) provide more support for launch vehicle start-ups.
Especially, in case of the diversification of project participation methods, if R&D can be performed through contracts other than R&D agreements for the implementation of space development projects, the Act on Contracts to Which the State is a Party and other relevant laws and regulations may be applicable. In this case, various issues may arise upon failure to perform such contracts (e.g., debarment from participating in government bidding or imposition of liquidated damages for delays).
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Proposed Implementation Plan for Space Industry Cluster Vision
In December 2022, the National Space Council officially designated the cities to comprise a “Tripartite Space Industry Cluster,” a regional hub to foster the space industry. Thereafter, on March 14, 2024, through the Proposed Implementation Plan for the Space Industry Cluster Vision, the Government announced its intent to form a Tripartite Space Industry Cluster around three cities – Daejeon, Sacheon (Gyeongsangnam-do), and Goheung (Jeollanam-do) – and grow the space industry to a value of KRW 100 trillion and nurture 1,000 space companies by 2045 (i.e., Goheung for launch vehicles, Jinju and Sacheon in Gyeongsangnam-do for satellites, and Yuseong-gu in Daejeon for R&D and training experts).
The implementation plan consists of nine major tasks under the following three overarching areas: (i) space industry infrastructure, (ii) space industry ecosystem, and (iii) foundation for the space industry cluster.
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Areas
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Tasks
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(1) Space Industry Infrastructure
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①
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Establishing private launch sites and space environment testing facilities, both of which are key infrastructures for launch vehicle and satellite technologies
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②
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Establishing three regional centers (i.e., Satellite Center, Launch Vehicle Center, and Space Expert Development Center)
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③
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Establishing a national industrial complex for aerospace (in Jinju and Sacheon by October 2024) and a national industrial complex for space launch vehicles (in Goheung by 2030) to promote the growth and development of the space industry
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(2) Space Industry Ecosystem
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④
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Expanding financial support (e.g., creating a fund specifically for the space industry) for promising businesses interested in the clusters as their business location
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⑤
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Initiating cooperative R&D projects to create synergy between clusters (named the “Three-Pointed Star Project”)
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⑥
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Enhancing tailored on-site support to create infrastructure for the space industry ecosystem
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(3) Foundation for Space Industry Cluster
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⑦
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Establishing an institutional foundation for the comprehensive and sustainable development of the clusters (such as enacting the Special Act on Space Industry Clusters and amending related regulations).
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⑧
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Fostering the growth of space experts and developing training programs
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⑨
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Strengthening international cooperation for the globalization of clusters
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Easing of Launch Standards Following Proposed Amendment
The current SDPA requires a person who intends to launch a space launch vehicle to obtain a launch permit from the MSIT in order to minimize the risk of failure and ensure public safety.
In consideration of the administrative and financial burdens, as well as the inefficiency arising from the need to obtain a launch permit for each launch, the Proposed Amendment introduces a new system whereby a “launch license” can be obtained to repeatedly launch the same launch vehicle at the same launch site.
In preparation for the legislation of the Proposed Amendment, the MSIT is drafting an amendment to the Enforcement Decree of the SDPA and a notification for the “Standard Guidelines for Launch License” (tentative name) to establish detailed standards and procedures necessary for the operation of the launch license system. Private companies and public institutions that are pursuing technology development, projects and similar endeavors with the aim of repeatedly launching space launch vehicles should thoroughly review these regulatory developments and preemptively prepare for the issuance of launch licenses, safety management inspections after issuance and other related requirements.
Separately, the Proposed Amendment, in addition to the above launch license system, newly inserted a provision that allows the Minister of National Defense to permit the launch of space launch vehicles for national defense purposes if necessary for national security reasons. This provision is the result of consultations between the MSIT and the Ministry of National Defense, and it is expected that the detailed standards and procedures applicable to launch permits for space launch vehicles for national defense purposes may partially differ from those applicable to other space launch vehicles. Therefore, private companies and public institutions that are engaged in or pursuing projects related to the launch of space launch vehicles for national defense purposes should also keep an eye on the relevant detailed system design developments.
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Since the establishment of KASA, the Government has been preparing various measures to revitalize the aerospace industry, including deregulation. Companies should take into consideration the potential effects of the Proposed Amendment, including the expected easing of regulations for launching vehicles.
[Korean Version]
