Governance of the Space Economy: A Hierarchical Framework (2026 Edition)

Key Takeaways

• The Artemis Accords reached 60 signatories in January 2026, solidifying “soft law” norms like deconfliction and interoperability alongside the 1967 Outer Space Treaty.
• New 2025 mandates from the Federal Aviation Administration and European Commission shifted regulatory focus from launch permissions to orbital traffic management.
• Industry-led standards from bodies like ISO now dictate daily operations for mega-constellations, filling gaps where formal treaties lag behind technological speed.

Introduction to the Governance Hierarchy

The space economy operates within a stratified governance architecture that functions much like a pyramid. At the base lie the foundational international treaties, which provide broad, immutable principles. As one moves up the hierarchy, the mechanisms become more specific, more flexible, and more nationally enforceable. By January 2026, this hierarchy has evolved from a static legal backdrop into a dynamic operational framework, capable of managing thousands of active satellites, commercial space stations, and the nascent lunar economy.

This article examines the six distinct layers of this hierarchy: Treaties, National Policy, Domestic Law, Regulation, Standards, and Best Practices. Understanding the interplay between these layers is necessary for any entity operating in the space domain, as a failure to comply at any level can result in license revocation, liability suits, or loss of market access.

Tier 1: Treaties and International Agreements

The foundation of all space governance remains the international treaty framework established under the United Nations during the Cold War. While these documents were written decades ago, their interpretation has shifted significantly by 2026 to accommodate commercial realities.

The Outer Space Treaty (1967)

The Outer Space Treaty (OST) serves as the “constitution” of space. Even in the bustling commercial environment of 2026, Article VI of the OST remains the primary hook for all private activity. It mandates that States Parties bear international responsibility for national activities in outer space, whether carried out by governmental agencies or non-governmental entities. This creates the “authorization and continuing supervision” requirement that drives all domestic licensing regimes.

Recent interpretations have focused on Article II, the non-appropriation principle. While nations cannot claim sovereignty over celestial bodies, the US and Luxembourg interpretations – allowing for the extraction and ownership of space resources – have gained broader acceptance through state practice, though China and Russia maintain alternative legal viewpoints.

The Liability Convention (1972)

The Space Liability Convention establishes a bifurcated liability regime. A launching state is absolutely liable for damage caused by its space object on the surface of the Earth or to aircraft in flight. However, for damage caused elsewhere (i.e., in orbit), liability is fault-based. In 2026, with orbital congestion at historical highs, the definition of “fault” has become a central legal debate. Does failure to maneuver constitute fault? Does adhering to outdated debris mitigation guidelines protect an operator from liability? Legal scholars now look to Tier 5 (Standards) to define the “duty of care” necessary to establish or refute fault in orbit.

The Rescue Agreement (1968)

Often overlooked in the early commercial era, the Rescue Agreement has regained prominence with the rise of private astronaut missions. The agreement obliges states to take all possible steps to rescue and assist astronauts in distress and to return them promptly.

In 2026, this obligation faces new complexities. Does the term “personnel of a spacecraft” cover wealthy space tourists or industrial contractors on a commercial station? Legal consensus has shifted toward a broad interpretation, ensuring that any human in orbit is afforded rescue protections. However, the financial burden of such rescues remains a point of contention between private insurers and state agencies.

The Registration Convention (1975)

The Registration Convention requires launching states to furnish the UN with details about the orbit of each space object. This was manageable when launches were infrequent events. Today, with mega-constellations deploying satellites in batches of 60 or more, the administrative backlog is significant.

Modern adherence involves automated data transfers. States like the US and UK now push registration data to the UN Office for Outer Space Affairs (UNOOSA) almost in real-time. This transparency is vital for Space Situational Awareness (SSA), allowing operators to know exactly who is responsible for which object in a crowded orbital shell.

The Artemis Accords and Soft Law

The most significant development in this tier is the Artemis Accords. As of January 2026, with the accession of Portugal, the Accords have 60 signatories. While not a treaty in the formal sense, the Accords function as a powerful “soft law” mechanism. They reinforce OST obligations but add operational specificity, such as the requirement to release scientific data, the commitment to interoperability, and the establishment of “safety zones” to prevent harmful interference. The rapid expansion of the Accords has effectively created a parallel consensus among Western-aligned spacefaring nations, isolating those who refuse to adopt these norms.

Tier 2: National and Regional Policy

Directly above international treaties sits national policy. This layer defines a country’s strategic intent. It signals to the market whether a nation prioritizes military dominance, scientific prestige, or commercial growth.

United States Policy Evolution

By 2026, US policy has aggressively pivoted toward “commercial-first” solutions. The executive orders signed in August 2025 regarding “Enabling Competition in the Commercial Space Industry” instructed agencies to dismantle regulatory barriers that hindered rapid launch cadences. The policy directive explicitly encourages “novel space activities” – such as commercial space stations and on-orbit manufacturing – forcing regulators to find ways to say “yes” rather than defaulting to prohibition due to lack of precedent.

The US strategy relies heavily on the “whole-of-government” approach. The Department of Commerce promotes industry, the Department of Defense acts as an anchor customer, and NASA focuses on deep space exploration while purchasing LEO services from the private sector. This synergy lowers the barrier to entry for startups, as they can rely on government contracts to secure early funding.

The European Union Approach

In contrast, the European Union has solidified its role as a regulatory superpower. The “EU Space Act,” proposed in mid-2025 and moving toward final adoption, emphasizes sustainability and resilience over pure speed. EU policy prioritizes the protection of critical infrastructure (Galileo, Copernicus, IRIS²) and mandates strict debris mitigation adherence for any operator seeking access to the EU market. This creates a “Brussels Effect” in space, where non-EU operators voluntarily adopt stricter EU standards to maintain access to European customers.

European policy also emphasizes “strategic autonomy.” This means reducing reliance on non-EU launch providers and satellite manufacturers. Consequently, substantial subsidies are directed toward ArianeGroup and European startups like MaiaSpace and Isar Aerospace to ensure sovereign access to orbit.

Emerging Space Nations

Nations like the United Arab Emirates, India, and Saudi Arabia have crafted policies that blend these approaches. Their strategies often offer tax incentives and regulatory “sandboxes” to attract startups that find the US market too saturated or the European market too bureaucratic.

India, following the success of its lunar missions and the privatization reforms of 2023, has positioned itself as a cost-effective manufacturing hub. Its policy focuses on “frugal engineering” at scale, encouraging Western companies to outsource component manufacturing to Bengaluru and Hyderabad.

Dual-Use Technology Policy

A major policy trend in 2026 is the explicit integration of civil and military capabilities. Most nations now acknowledge that “space is a warfighting domain,” reflected in policies that encourage “Dual-Use” technology. A satellite used for agricultural monitoring can also track troop movements. National policies now include provisions for the government to “requisition” commercial bandwidth or data in times of crisis, a clause that operators must accept in exchange for lucrative defense contracts.

Tier 3: Domestic Law (Legislation)

Policy is aspirational; law is binding. Domestic legislation translates treaty obligations and national strategy into enforceable statutes.

The US Commercial Space Launch Competitiveness Act

Updated provisions in 2025 extended the “learning period” for human spaceflight safety, preventing the Federal Aviation Administration (FAA) from imposing strict design regulations on passenger-carrying spacecraft. This legislative choice reflects a tolerance for risk to foster innovation. Furthermore, new statutes have clarified the property rights of resources extracted from the Moon, providing legal certainty for companies like Intuitive Machines and ispace as they plan extraction missions.

This act also clarified the “mission authorization” framework. Previously, there was ambiguity about which agency regulated activities between launch and reentry (e.g., a factory in orbit). The 2025 updates assigned these novel activities to the Department of Commerce, filling a regulatory gap that had long worried investors.

The UK Space Industry Act 2018 (2026 Implementation)

The UK regulatory framework has fully matured. The Civil Aviation Authority (CAA) now processes licenses for vertical launches from Scotland and horizontal launches from Cornwall with standardized timelines. The legislation is notable for its stringent insurance and liability indemnity requirements.

A key feature of the UK law is the “limit of liability.” While the UK government bears unlimited liability under international treaties, it caps the operator’s liability at 60 million euros for standard missions. This allows smaller companies to operate without purchasing impossibly expensive insurance policies, as the government agrees to cover claims exceeding that cap.

The Japanese Space Activities Act

Japan has amended its space activities act to facilitate the rapid approval of commercial lunar payloads. Recognizing the success of its commercial partners, the legislation now includes specific provisions for “non-Earth” activities, filling a gap that exists in many other jurisdictions. Japan’s law is unique in its explicit support for debris removal missions, providing a clear legal pathway for companies like Astroscale to rendezvous with and capture defunct satellites without violating property rights.

Intellectual Property in Space

Domestic laws are increasingly addressing intellectual property (IP) created in orbit. Under the US law, an invention made on a US-registered space object is considered to have been made in US territory. This extension of patent law is vital for the pharmaceutical and semiconductor industries, which are moving manufacturing processes to microgravity environments. Clarifying these rights prevents legal battles over who owns a “space-made” drug formulation.

Tier 4: Regulation

This is the most active layer of the hierarchy. Regulations are the detailed rules written by government agencies to implement domestic laws.

FAA Part 450 and Streamlining

The transition to FAA Part 450 (Streamlined Launch and Reentry Licensing Requirements) initially caused significant friction in the industry due to its complexity. However, following the 2025 directive to “eliminate or expedite” reviews, the FAA has adopted a more performance-based approach. Operators of proven vehicles, such as the SpaceX Starship and Falcon fleet, now benefit from categorical exclusions that reduce the paperwork burden for routine launches.

The regulation now allows for a “portfolio approach.” Instead of licensing every single launch individually, an operator can receive a license for a “family of missions” with similar parameters. This shift was essential to support launch cadences that now exceed 200 per year from US spaceports alone.

FCC Space Bureau and Debris Rules

The Federal Communications Commission (FCC) remains the de facto global regulator for orbital debris because nearly every commercial satellite operator requires US market access. In 2026, the FCC is strictly enforcing its “5-year rule” for post-mission disposal of LEO satellites.

Furthermore, new spectrum sharing rules adopted after WRC-23 require operators to demonstrate automated coordination capabilities. If two satellites are transmitting in the same frequency band and physically pass near each other, their systems must automatically negotiate who speaks and who listens to prevent interference. The FCC requires proof of this capability before granting a license.

Space Traffic Management (STM)

While a single global STM authority does not exist, national regulators are filling the void. The US Department of Commerce, through its Traffic Coordination System for Space (TraCSS), now issues collision warnings that carry regulatory weight. Operators ignoring these warnings risk license modification or revocation.

In the EU, the EU Space Surveillance and Tracking (EUSST) partnership provides similar services. A key regulatory development in 2026 is the “equivalence” agreement between the US and EU systems. A warning issued by TraCSS is now recognized by European regulators as valid, and vice versa, preventing operators from receiving conflicting instructions from different governments.

Remote Sensing and Imaging Restrictions

Regulations regarding Earth observation have also evolved. The US National Oceanic and Atmospheric Administration (NOAA) has relaxed restrictions on Synthetic Aperture Radar (SAR) imagery. Previously, the highest resolution images were restricted for national security reasons. Recognizing that foreign competitors were selling this data anyway, NOAA now allows US companies to sell high-resolution sub-50cm radar imagery, keeping the US industry competitive while retaining “shutter control” powers to black out regions during active military conflict.

Export Controls (ITAR and EAR)

Despite the push for commercialization, space technology remains heavily regulated under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). In 2026, there is a “green lane” for exports to close allies (such as AUKUS partners and certain NATO members), allowing for faster sharing of satellite componentry. However, controls remain strict for nations outside this circle to prevent sensitive dual-use technology from proliferating.

Tier 5: Standards

Where regulations end, standards begin. Standards are technical specifications often developed by industry or international technical bodies. They are voluntary by definition but often become mandatory through contracts or regulation.

ISO 24113: Space Debris Mitigation

ISO standard 24113 remains the benchmark for debris mitigation. It specifies technical requirements for passivation (depleting energy sources to prevent explosion) and disposal orbits. Many national regulators, including the ESA and UK CAA, incorporate ISO 24113 directly into their licensing requirements, effectively converting this voluntary standard into law.

Updates to the standard in late 2025 introduced strict probability thresholds for “successful disposal.” An operator must now prove their satellite has a 99% reliability rate for its deorbiting system, pushing manufacturers to include redundant propulsion or grappling fixtures for active removal.

CCSDS and Interoperability

The Consultative Committee for Space Data Systems (CCSDS) sets the standards for how spacecraft talk to Earth and each other. In 2026, the focus has shifted to “LunaNet” standards – ensuring that communications relays around the Moon from different nations and companies can interoperate. Without these standards, the cooperative infrastructure envisioned by the Artemis Accords would be technically impossible.

These standards also cover “Delay/Disruption Tolerant Networking” (DTN), an internet-like protocol designed for the high-latency environment of deep space. Commercial lunar landers now universally adopt DTN to ensure they can route data through any available orbiter, regardless of who owns it.

CONFERS and On-Orbit Servicing

The Consortium for Execution of Rendezvous and Servicing Operations (CONFERS) creates technical standards for satellites that dock with other satellites to refuel or repair them. As on-orbit servicing moves from demonstration to commercial reality in 2026, these standards define what a “cooperative” interface looks like and how proximity operations should be conducted safely.

A major standard adopted in 2026 is the “standardized refueling port.” Much like USB-C became a universal charger on Earth, this standard ensures that a refueling satellite from one company can latch onto a client satellite from another manufacturer without custom adapters.

Cybersecurity Standards

With space assets becoming prime targets for cyberattacks, standards bodies like NIST have released the “Space Asset Cybersecurity Framework.” This standard dictates encryption levels for command links and requires “hardware roots of trust” to prevent supply chain tampering. While voluntary, the US Space Force requires compliance with this standard for any commercial operator bidding on military data contracts.

Human Rating Certification

For private space stations, standards for “human rating” have largely replaced government specifications. Organizations like ASTM International have developed standards for life support systems, emergency egress, and radiation shielding. Commercial stations use these consensus standards to prove safety to insurers and customers, moving away from the costly, bespoke specifications used in the NASA-owned era.

Tier 6: Best Practices and Guidelines

The top of the pyramid consists of best practices. These are flexible, rapidly evolving norms adopted by industry leaders to ensure safety and sustainability often before regulators catch up.

The Space Sustainability Rating (SSR)

The Space Sustainability Rating creates a financial incentive for responsibility. Operators with high SSR scores – achieved by redundant deorbit capabilities or sharing data transparently – often receive lower insurance premiums. This market-based mechanism encourages behavior that exceeds minimum regulatory compliance.

In 2026, the SSR has become a “badge of honor” for Environmental, Social, and Governance (ESG) investors. Publicly traded space companies strive for a Platinum SSR rating to attract capital from green investment funds, making sustainability a competitive advantage rather than just a cost center.

Operator-to-Operator Coordination

With tens of thousands of satellites in Low Earth Orbit, operators like SpaceX and Amazon (Project Kuiper) have developed automated data-sharing pipelines. These bilateral agreements allow their collision avoidance systems to “talk” to each other without human intervention. This best practice is essential because the loop of government-issued warnings is often too slow for the realities of crowded orbital shells.

Best practices now dictate a “Right of Way” protocol. Generally, the more maneuverable spacecraft (usually the one with electric propulsion and active station-keeping) yields to the less maneuverable asset. In cases between two active constellation satellites, the vessel that was launched later typically bears the burden of maneuvering, preserving the fuel of the incumbent asset.

Dark and Quiet Skies

Astronomers and satellite operators have established voluntary guidelines to reduce the optical brightness of satellite fleets. While not legally binding, operators adopt these darkening techniques to maintain public goodwill and avoid potential future restrictions on their orbital deployment.

Techniques include “sat-black” paints, dielectric mirror films that scatter sunlight away from Earth, and specific orientation maneuvers during twilight hours. The “SatCon2” workshop recommendations are now standard engineering requirements for new constellation designs, proving that industry self-regulation can address scientific concerns without heavy-handed government intervention.

Supply Chain Transparency

A growing best practice is the “Ethical Space Supply Chain.” Companies are increasingly auditing their suppliers to ensure raw materials (like titanium and helium) are not sourced from conflict zones or sanctioned entities. This voluntary transparency helps companies navigate the complex web of export controls and sanctions, ensuring their supply lines remain robust even during geopolitical tensions.

Summary

The governance of the space economy is no longer a theoretical exercise in international diplomacy. It is a functioning, multi-layered machine that dictates the parameters of the trillion-dollar space industry. From the constitution-like permanence of the Outer Space Treaty to the rapid-fire evolution of operator best practices, each tier plays a specific role in balancing innovation with safety. As 2026 progresses, the interactions between these layers will determine whether the space environment remains a domain of sustainable commerce or succumbs to the tragedy of the commons.

Appendix: Top 10 Questions Answered in This Article

What is the most fundamental document in space law?

The Outer Space Treaty of 1967 is the foundation of space law. It establishes core principles such as the non-appropriation of celestial bodies and the international responsibility of states for national space activities.

How many countries have signed the Artemis Accords as of January 2026?

As of January 2026, 60 nations have signed the Artemis Accords. Portugal became the 60th signatory, reinforcing the Accords’ status as the dominant soft-law framework for space exploration.

What is the difference between the US and EU approach to space policy?

The US prioritizes commercial speed and deregulation to foster industry growth and competition. The EU emphasizes regulatory robustness, sustainability, and the protection of sovereign infrastructure through mechanisms like the EU Space Act.

What is the “5-year rule” enforced by the FCC?

The 5-year rule is a regulation requiring satellite operators to deorbit their spacecraft within five years of mission completion. This reduces the risk of long-term orbital debris compared to the previous 25-year guideline.

Does the FAA license commercial space stations?

The FAA licenses the launch and reentry of vehicles transporting cargo and crew to space stations. However, the authorization of the actual on-orbit activities of a commercial space station falls under new “novel space activities” frameworks being implemented by the Department of Commerce.

What is ISO 24113?

ISO 24113 is the primary international technical standard for space debris mitigation. It outlines specific requirements for spacecraft design and operation, such as passivating energy sources and ensuring successful post-mission disposal.

How do satellite operators prevent collisions in 2026?

Operators use a combination of government data (like US TraCSS) and automated operator-to-operator coordination. Best practices involve direct data links between constellations to allow autonomous collision avoidance maneuvers.

Are space standards voluntary or mandatory?

Standards like ISO or CCSDS are technically voluntary but often become de facto mandatory. Regulators frequently incorporate them into licensing conditions, and insurance companies may require adherence to them for coverage.

What is the role of the Space Sustainability Rating (SSR)?

The SSR provides a metric to score a space mission’s environmental sustainability. High scores can lead to lower insurance premiums and better investment terms, incentivizing operators to exceed minimum legal requirements.

What is the Liability Convention’s stance on orbital collisions?

The Liability Convention applies a “fault-based” standard for damage caused in space (orbit-to-orbit). This requires a claimant to prove that the other operator acted negligently, which is legally complex compared to the “absolute liability” for damage on Earth.

Appendix: Top 10 Frequently Searched Questions Answered in This Article

What is the purpose of the Outer Space Treaty?

The purpose of the Outer Space Treaty is to provide a legal framework for the exploration and use of outer space. It ensures space remains free for exploration by all states and prevents the placement of nuclear weapons in orbit.

How long does a satellite license approval take?

Under streamlined regulations like FAA Part 450, approval timelines vary based on the vehicle’s history, but the goal is to reduce processing time significantly from previous years. Standard review periods can still range from several months to over a year for new operators.

What are the benefits of the Artemis Accords?

The Artemis Accords promote peaceful cooperation, transparency, and interoperability in space exploration. They facilitate joint missions by standardizing emergency assistance protocols and the release of scientific data.

What is the difference between space law and space policy?

Space law consists of binding statutes and treaties that carry legal penalties for non-compliance. Space policy is a set of strategic goals and principles that guide a government’s actions but does not inherently carry the force of law until enacted via legislation.

Who regulates space debris?

No single global entity regulates space debris, but national agencies like the US FCC and French ANFR enforce debris rules for their licensees. The Inter-Agency Space Debris Coordination Committee (IADC) issues global guidelines that nations adopt individually.

Why is space traffic management necessary?

Space traffic management is necessary to prevent collisions in increasingly crowded orbits. With thousands of satellites launched annually, uncoordinated traffic poses a catastrophic risk to critical infrastructure and human spaceflight.

What rights do companies have to mine the Moon?

Under US and Luxembourg law, companies have the right to extract and own space resources, though they cannot claim ownership of the land itself. The Artemis Accords reinforce this interpretation, treating resource extraction as a protected activity.

How does the “Brussels Effect” apply to space?

The Brussels Effect occurs when multinational space companies adopt strict EU regulations globally to maintain access to the European market. This effectively elevates global standards even for operations outside the EU’s jurisdiction.

What happens if a country violates the Outer Space Treaty?

Violations can lead to diplomatic disputes and international sanctions, though the treaty lacks a direct police force. Dispute resolution typically occurs through diplomatic channels or potential arbitration, relying on political pressure for enforcement.

What is the “launching state” in space law?

A “launching state” is any country that launches a space object, procures the launch, or from whose territory/facility the launch occurs. These states bear indefinite international liability for any damage caused by that object.