EUROPEAN COMMISSION Brussels, 29.11.2022 SWD(2022) 366 final COMMISSION STAFF WORKING DOCUMENT EU Drone Sector state of play Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘A Drone Strategy 2.0 for a Smart and Sustainable Unmanned Aircraft Eco-System in Europe’ {COM(2022) 652 final}



Table of Contents 1Introduction 2Scope of the strategy 3Consultation Strategy 3.1Roadmap summary result analysis 3.2Open Public Consultation 3.3Informal Drone Experts Group and Drone Leaders’ Group report 4EU drone policy up to now (“Drone Strategy 1.0”) 4.1Formulating a policy 4.1.1Communication for “A new era for aviation Opening the aviation market to the civil use of remotely piloted aircraft systems (RPAS) in a safe and sustainable manner” 4.1.2High Level Drone Conferences in Riga (2015), Warsaw (2016), Helsinki (2017), Amsterdam (2018) 4.1.3Communication for “an Aviation Strategy for Europe” 4.1.4Communication for a “Sustainable and Smart Mobility Strategy – putting European transport on track for the future” 4.1.5Communications on “the EU Security Union Strategy” and “Counter-Terrorism Agenda” 4.1.6Communication for an “Action Plan on synergies between civil, defence and space industries”, including a “Drones Technologies” Flagship 4.1.7Communication on “the New EU Urban Mobility Framework” and publication of Urban Air Mobility guidelines 4.1.8Communication on a “Roadmap on critical technologies for security and defence” and “Versailles” Declaration 4.1.9Joint Communication on the “the Defence Investment Gaps Analysis and Way Forward” 4.2Developing and implementing a regulatory framework

4.2.1Adoption of Regulation (EU) 2018/1139 on common rules in the field of civil aviation (2018) 4.2.2Adoption of detailed implementing rules allowing effective drone operations and the development of industry standards 4.2.2.1‘Open’ category 4.2.2.2‘Specific’ category 4.2.2.3‘Certified’ category 4.2.3Adoption of a regulatory framework for the provision of U-space services 4.3Research & Innovation on drones and related systems 4.3.1Single European Sky ATM Research (SESAR) 4.3.2European Climate, Infrastructure and Environment Executive Agency (CINEA) 4.3.3European defence research and innovation 5Presentation of the EU drone eco-system today 5.1The elements of the eco-system 5.2Drone services offered today 5.2.1Aerial operations 5.2.2Innovative air mobility 5.3Drones as an emerging sector of the economy 6The potential benefits of a viable drone eco-system in Europe 6.1Growth and Jobs 6.2Decarbonisation and circular economy 6.2.1Decarbonisation

6.2.2Circular economy 6.3Digitalisation 7Vision and strategic objectives 7.1Vision 7.2Strategic objectives 7.3SMART objectives 8The elements of a thriving EU drone eco-system in 2030 8.1Building the European drone services market 8.1.1Improving airspace capabilities (U-space development and integration with Air Traffic Management) 8.1.2Facilitating Aerial Operations 8.1.3Developing Innovative Air Mobility 8.1.4Ensuring societal acceptance 8.1.5Promoting the human dimension (knowledge, training, competences) 8.2Strengthening European civil, security and defence industry capabilities and synergies 8.2.1Providing funding and financing 8.2.2Identifying strategic technology building blocks 8.2.3Enabling testing and demonstrations 8.2.4Driving for common standards 8.2.5Increasing counter-UAS capabilities and system resilience 9Action Plan

ASynopsis consultation report A.1Introduction A.2Feedback to the Roadmap A.3Open Public Consultation (OPC) A.4Drone Leaders’ Group (DLG) A.5Targeted surveys and Interviews A.6Targeted consultations – presentation of responses



COMMISSION STAFF WORKING DOCUMENT EU Drone Sector state of play Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘A Drone Strategy 2.0 for a Smart and Sustainable Unmanned Aircraft Eco-System in Europe’ 1Introduction This Staff Working Document accompanies the Communication from the Commission on ‘A Drone Strategy 2.0 for a Smart and Sustainable Unmanned Aircraft Eco-System in Europe’, which sets out the actions needed to ensure that a drone eco-system is deployed in the European Union in a way that supports the goals of the European Green Deal, the digital transformation of the European Economy and of the Sustainable and Smart Mobility Strategy. The actions set out in the Communication should ensure safe, smart, resilient, inclusive and clean drone operations in the European Union. The development of drones (unmanned aircraft systems) services supported by a competitive industry can strongly support Europe’s twin transition to a green and digital economy and contribute to the post-COVID 19 recovery as well as the future resilience of the EU economy. From daily commuting, goods delivery to the development of a wide spectrum of new applications and services, drones can become an enabler of our economic and social life and a driving force of the further digitalization of the European economy. The European Green Deal is a new growth strategy for the EU, which calls for the reduction of greenhouse gas emissions in all sectors of the economy, including transport and the protection of the human health. In this context, the transport system as a whole should be made smart and sustainable. The Communication on the European Green Deal announced therefore a strategy for sustainable and smart mobility, which was adopted by the Commission in December 2020. In the Sustainable and Smart Mobility Strategy, the Commission announced its intention to adopt a Drone Strategy 2.0 in 2022 to reap the full potential offered by drones to contribute to the safeguarding of a well-functioning single market. Drone applications can also strongly contribute to the digital transformation of many businesses and help to meet Europe’s Digital Strategy targets. In order to enhance the competitiveness of the European drone eco-system as well as Europe’s security and defence capabilities, the Commission adopted in February 2020 an ‘Action plan on synergies between civil, defence and space industries’ , and which includes a ‘EU Drones Technologies Flagship’ project aiming at reaping synergies between the civil, including counter-drones technologies, and military use of drones. This Action Plan also identifies autonomous systems including drones as a critical technology for which Europe needs to achieve technological sovereignty. These objectives were reinforced by the Versailles Declaration adopted by the Member States in March 2022 which marked the EU decision to take more responsibility for its security and take further decisive steps towards building its European sovereignty, reducing our dependencies and designing a new growth and investment model for 2030. In this respect, the Declaration addressed three key dimensions, first, enhance security and defence capabilities, second, reduce energy dependencies; and third build a more robust economic base. Among those measures, the Member States agreed to foster synergies between civilian, defence and space research and innovation, and invest in critical and emerging technologies and innovation for security and defence. They also agreed to take measures to strengthen and develop EU’s defence industry, including SMEs.

To reach its goals, the EU needs to ensure the safe and efficient development of a drone ecosystem, addressing related societal concerns such as safety, security, privacy and environmental protection, while simultaneously nurturing a sustainable economic environment for the European drone industry to grow. Although EU citizens expressed generally positive attitudes to new forms of air mobility, a study led by the European Union Aviation Safety Agency (EASA) has shown that safety and noise pollution are on top of EU citizens’ concerns, in a list that also includes cybersecurity risks and the potential impact on wildlife. Therefore, there are many other issues beyond safety that must also be addressed in order to ensure the social acceptance of drones, such as environmental and privacy issues. In 2014 and 2015, the Commission adopted respectively a Communication on a new era for civil aviation and the Aviation Strategy for Europe which highlighted that safety is crucial to the successful integration of drones in the airspace as well as the development of this industry and the services and applications enabled by drones. The Aviation Strategy for Europe set an objective to establish a basic legal framework for the safe development of drone operations in the EU and to prepare more detailed rules that allow drone operations and the development of industry standards. This regulatory framework is now largely in place. New actions are needed at EU level because the drone sector is developing rapidly with new innovative ways of using drones emerging at a fast pace requiring an assessment of the regulatory and enabling framework to ensure that these new services can thrive in the EU internal market and globally. Related technologies such as radiofrequency communication, Artificial Intelligence, advanced sensors and improvements in power sources are opening new prospects. Drones are used as daily tools in ever broadening, data-demanding economic sectors such as agriculture, construction, surveillance, filming, healthcare, energy, environment, public safety and security. Future perspectives include the use of drones, for example, as platforms for communication hubs or weather or pollution monitoring. Drones are also both users and enablers of Global Navigation Satellite System (GNSS) services, they can be used to complement Copernicus imaging, as well as to complement Secure Connectivity services. Conversely, the fact that customised drones can also be used for illegal purposes should be addressed. In the transport sector, the use of drones for deliveries is already tested in many countries. First pilot trials in passenger transport in Europe are expected to take place within the next few years. At the same time, it is important that Europe safeguards its open strategic autonomy in this area, as recognised in the “Action plan on synergies between civil, defence and space industries”. Against this background, the existing strategy from 2015 has been overtaken by these new developments and a new strategy is needed at EU level to provide a forward-looking vision for the future holistic development of the sector. This Staff Working Document gives an overview of the Commission services’ assessment of the challenges that the drone sector faces as well as the analysis and data underpinning the new Drone Strategy 2.0. With that, it aims to support the entire drone eco-system, including cities, regions and Member States in the development of drone activities for mobility and services. 2Scope of the strategy The term “drone” is the layman term for “Unmanned Aircraft Systems” which means an unmanned aircraft and the equipment to control it remotely. The term “Urban Air Mobility” has been increasingly referred to in the context of new Urban Mobility initiatives. Due to the lack of a definition and in line with the regulatory operation centric approach, EASA has developed the notion of Innovative Aerial Services (IAS). IAS correspond to the set of operations and/or services that are of benefit to citizens and to the aviation market and that are enabled by new airborne technologies – the operations and/or services include both the transportation of passengers and/or cargo and aerial operations (e.g. surveillance, inspections, mapping, telecommunication networking). IAS can be further divided into “aerial operations” (surveillance, inspection, imaging, …), as well as a whole new emerging market called Innovative Air Mobility (IAM) (including international, regional and urban air mobility). For further reference in the following text, the term ‘drones’ will be used to cover all vehicles involved in Innovative Aerial Services including manned eVTOL, as well as Unmanned Aircraft Systems used in the defence sector. However, as explained in the Drone Strategy 2.0, the purpose is not to address the conditions of operations of military drones, but rather seeks to identify areas of cross-fertilisation whereby defence projects may benefit from innovative developments of SMEs for civilian drones and that civil aeronautics benefit from developments in the field of defence. 3Consultation Strategy As part of its consultation strategy, the Commission announced in the roadmap for the preparation of the Drone Strategy 2.0 the launching of an online Open Public Consultation (OPC), desk research as well as targeted stakeholder consultations in the context of a preparatory Fact finding study. Consultation tools used for collecting information for the study included surveys/questionnaires, interviews, stakeholder workshop and meetings of the informal drone expert group. The targeted consultations also included consultations of the defence community by Commission services to explore civil/military synergies in the development of drone technologies. The stakeholders that have been identified included national competent authorities/administrations, drone operators and producers, U-space and air navigation service providers, local rural and urban communities, airport operators, and relevant European associations. 3.1Roadmap summary result analysis The Commission published the intention to develop the Drone Strategy 2.0 on the website “Have your Say”, together with the roadmap for the Drone Strategy 2.0 . 45 comments were received on the roadmap in the period between 4 June and 2 July, 2021. The analysis of the comments received to the Roadmap is available in Annex A.

3.2Open Public Consultation Citizens and organisations were invited to contribute to the online public consultation which was open between 8 October 2021 and 31 December 2021. A total of 258 comments were received. The analysis of the comments can be found in Annex A. 3.3Informal Drone Experts Group and Drone Leaders’ Group report The Commission also used its existing consultation platforms for the development of the Drone Strategy 2.0, notably the Informal Drone Experts Group. In addition, in order to give a high-level steer to the development of the Drone Strategy 2.0, the Commission created on an ad hoc basis a ‘Drone Leaders’ Group’. In total, the Drone Leaders’ Group held four meetings between October 2021 and April 2022, collecting the views of its 26 members representing all core stakeholder groups whether from the national authorities, EU agencies, manned or unmanned aviation. The Group also organised three hearings with the members of the Informal Drone Experts Group addressing the following issues: ·Hearing 1 on Urban Air Mobility (cargo/passengers) and U-space (held on 18 February 2022) ·Hearing 2 on Enhancing drone services including the SME dimension (held on 25 February 22) ·Hearing 3 on Developing Civil-Defence industry synergies and technology building blocks (held on 8 March 2022). The Drone Leaders’ Group delivered a report including its Vision for the Drone Sector in 2030, identified key performance indicators and identified the main obstacles (and solutions) for the development of the EU drone services market. The most cited obstacles were: societal issues (privacy, security, noise and visual nuisances); technology (absence of standards, immature technologies, problems of integration); regulation (‘specific’ and ‘certified’ categories, vertiports, rules of the air, ATM-UTM integration); lack of investment and funding; and market issues (access to airspace, fragmentation). The Vision proposed by the Drone Leaders Group and a list of SMART performance indicators are presented in paragraph 7.1 below and the full report of the Drone Leaders’ Group is available in the Appendix of the synopsis consultation report. 4EU drone policy up to now (“Drone Strategy 1.0”) 4.1Formulating a policy 4.1.1Communication for “A new era for aviation Opening the aviation market to the civil use of remotely piloted aircraft systems (RPAS) in a safe and sustainable manner” The European Summit of 19 December 2013 called for action to enable the progressive integration of drones into civil airspace from 2016 onwards. This Communication focused on drones for civil use and responded to the call of the European manufacturing and service industry to remove barriers to the introduction of RPAS in the European single market. It set out the Commission's views on how to address drone operations in a European level policy framework which would enable the progressive development of the commercial drone market while safeguarding the public interest. The regulatory action and the related research and development efforts were to be built on existing initiatives involving a number of actors: the European Aviation Safety Agency, the national Civil Aviation Authorities, the European Organisation for Civil Aviation Equipment (EUROCAE), EUROCONTROL, the SESAR Joint Undertaking (SJU), the European Defence Agency, the European Space Agency, the drone manufacturing industry and operators. 4.1.2High Level Drone Conferences in Riga (2015), Warsaw (2016), Helsinki (2017), Amsterdam (2018) The Riga Drone Declaration of 2015 stated that drones need to be treated as new types of aircraft with proportionate rules based on the risk of each operation and EU rules for the provision of drone services should be developed quickly as well as technologies and standards ensuring the full integration of drones in the European airspace. The Warsaw Drone Declaration of 2016 called for the swift development of a drone ecosystem that is simple to use, affordable, commercially, and operationally friendly, yet capable of addressing all societal concerns such as safety, security, privacy and environmental protection. The Declaration also called for the safety rules to be kept simple, proportionate to the risk of the operation, performance-based, future-proofed, and based on global standards. Calling for urgent action on the airspace dimension, in particular the development of the concept of a U-space, a set of digital services enabling the safe scaling up of routine drone operations, the development of the U-Space was mentioned for the first time in a Declaration. The Helsinki Drone Declaration of 2017 supported the adoption of the new EASA Basic Regulation as providing the foundation for a European legislative framework for drone services. The growing fragmentation along national boundaries of the EU drone services market was also noted with concerns, indicating the urgent need for close cooperation between European and national authorities. The Declaration called for the opening of the drone services market and in particular, the introduction of competition between U-Space providers to ensure that services are delivered at the best possible cost-benefit ratio while allowing fair and timely access to airspace for drone operators. The Amsterdam Drone Declarations of 2018 called for a push towards integrated smart mobility and fair access to all dimensions of public space, inviting cities and regions, also within the Smart Cities initiative, to co-create with the citizens the public conditions and the infrastructure for integrated air and ground smart mobility solutions to flourish and for the timely delivery of the U-space regulatory framework. 4.1.3Communication for “an Aviation Strategy for Europe” In 2015, the Commission adopted its Communication on “an Aviation Strategy for Europe” highlighting the fact that while safety is crucial it cannot be looked at in isolation. In this Communication, drone technologies were considered as a major opportunity both for the European aeronautical manufacturing industry, especially for small and medium sized enterprises, and for the many aviation and non-aviation businesses that will be able to integrate drones into their activities and increase their efficiency and competitiveness. The Commission stated its intention to propose a basic legal framework for the safe development of drone operations in the EU, as part of the new basic aviation safety Regulation replacing Regulation 216/2008 and tasked the European Union Aviation Safety Agency with preparing more detailed rules allowing the drone operations and the development of industry standards. 4.1.4Communication for a “Sustainable and Smart Mobility Strategy – putting European transport on track for the future”

In its 2020 Sustainable and Smart Mobility Strategy, the Commission addressed the future challenges and opportunities for European mobility and the transport sector. From daily commuting to the proper functioning of global supply chains, mobility is an enabler of our economic and social life. As the second-largest area of expenditure for European households, the transport sector contributes 5% to European GDP and directly employs around 10 million workers. Whilst mobility brings many benefits for its users, it is not without costs for our society. By far, the most serious challenge facing the transport sector is to significantly reduce its emissions and become more sustainable. At the same time, this transformation offers opportunities for better quality of life, and for European industry across the value chains to modernise, create high-quality jobs, develop new products and services, strengthen competitiveness and pursue global leadership as other markets are moving fast towards zero-emission mobility. In its Sustainable and Smart Mobility Strategy, the Commission announced its intention to adopt a Drone Strategy 2.0 in 2022 setting out possible ways to guide the further development of this technology and its regulatory and commercial environment. . 4.1.5Communications on “the EU Security Union Strategy” and “Counter-Terrorism Agenda” In 2020, the Commission also adopted two Communications which both introduced new policy actions to counter possible threats that drones could pose. The EU Security Union Strategy and Counter-Terrorism Agenda stated that the threat of non-cooperative drones is a serious concern in Europe that needs to be addressed. In the Counter-Terrorism Agenda in particular, the Commission committed to look into the possibility of releasing an EU handbook for securing cities from non-cooperative drones This initiative has expanded and will now include “Protection against Unmanned Aircraft Systems – Handbook on Counter-UAS for Critical Infrastructure and Public Spaces” and “Protection against Unmanned Aircraft Systems – Handbook on Principles for Physical Hardening of Buildings and Sites”. The Commission introduced the Directive on the resilience of critical entities (CER Directive) in December 2020. This directive will reflect the priorities of the EU Security Union Strategy and address a wide range of non-cyber threats against critical entities and their infrastructure. It will cover eleven sectors, including the transport sector. The proposed Directive on the resilience of critical entities will introduce obligations on Member States and critical entities to conduct risk assessments and on critical entities to take technical, security and organisational measures to ensure their resilience against identified risks. Because of their nature, the threat of non-cooperative drones will be an integral part of their risk assessments. 4.1.6Communication for an “Action Plan on synergies between civil, defence and space industries”, including a “Drones Technologies” Flagship The Commission adopted in February 2021 a Communication for an “Action Plan on synergies between civil, defence and space industries” , including a flagship project for EU drone Technologies aimed to enhance the competitiveness of EU industry in this critical technology area. This Communication aimed to promote the competitiveness of the European drone eco-system, as well as, Europe’s defence capabilities, by reaping synergies between the civil and military use of drones. It highlighted that the flagship project forms part of an overall ambition to be further set out in the “Drone Strategy 2.0”. This Action Plan also identifies autonomous systems including drones as a critical technology for which Europe needs to achieve technological sovereignty. 4.1.7Communication on “the New EU Urban Mobility Framework” and publication of Urban Air Mobility guidelines To support the transition to cleaner, greener, and smarter mobility, in line with the objectives of the European Green Deal, the Commission adopted in November 2021 four proposals that will modernise the EU’s transport system. By increasing connectivity and shifting more passengers and freight to rail and inland waterways, by supporting the roll-out of charging points, alternative refuelling infrastructure, and new digital technologies, by placing a stronger focus on sustainable urban mobility, and by making it easier to choose different transport options in an efficient multimodal transport system, the proposals will contribute to putting the transport sector on track to cutting its emissions by 90%. The new framework announced a more ambitious approach to sustainable urban mobility planning (SUMPs) and related indicators. Such new and integrated approaches to using and managing urban space includes urban air mobility (e.g. drones). This complements the proposal for revised guidelines for the Trans-European Transport Network, according to which the largest 424 EU cities on the TEN-T network should adopt a sustainable urban mobility plan by 2025 and collect relevant data. To provide guidance on Urban Air Mobility (UAM) as specific topic related to Sustainable Urban Mobility Planning, UIC² – the UAM Initiative Cities Community or EU’s Smart Cities Marketplace – released a practitioner briefing in December 2021. 4.1.8Communication on a “Roadmap on critical technologies for security and defence” and “Versailles” Declaration The roadmap on critical technologies for security and defence, adopted in February 2022, is part of a number of Commission-led initiatives in areas critical for defence and security within the European Union. It is a concrete step towards a more integrated and competitive European defence market, particularly by enhancing cooperation within the EU, thereby building scale, mastering costs and enhancing operational effectiveness. The Commission thus provides input in the run-up to the EU Strategic Compass on Security and Defence. The Roadmap outlines a path to enhance the competitiveness and resilience of the EU security and defence sectors, notably by: ·inviting Member States to contribute actively to the Observatory of critical technologies currently being established; ·encouraging dual-use research and innovation at EU level. Two preliminary case studies have been carried out so far, including one on the defence technology area of autonomous systems. The “Versailles Declaration”, adopted by the heads of EU Member States, emphasised the need to foster synergies between civilian, defence and space research and innovation, and invest in critical and emerging technologies and innovation for security and defence. 4.1.9Joint Communication on the “the Defence Investment Gaps Analysis and Way Forward”

The analysis of defence investment gaps and the way forward, adopted in May 2022, is a response by the Commission and the High Representative to a task given by the European Council at the Versailles Summit. It presents an analysis of the defence investment gaps, and propose further measures and actions necessary to strengthen the European defence industrial and technological base, including defence related drone activities. It also responds to the call made in the context of the Conference of the Future of Europe for stronger EU action in defence. The Joint Communication presents a new level of ambition to build a stronger Europe in defence. It focuses in particular on the joint acquisition of military equipment, on strategic defence programming to set clearer priorities, and on the support to the European industrial base, including the strengthening of the European defence R&D framework, the European Defence Fund (EDF). The joint communication proposes to work on strategic short-, medium- to long-term capabilities to improve Europe’s defence capabilities. These include development and operationalisation of the medium-altitude “Eurodrone” (MALE RPAS) – which forms part of PESCO and EDF projects. Also, in the short- to medium-term developing and procuring counter drone-capabilities and weaponised medium-sized drones are identified as priorities. 4.2Developing and implementing a regulatory framework 4.2.1Adoption of Regulation (EU) 2018/1139 on common rules in the field of civil aviation (2018) The adoption of the new EASA Basic Regulation repealing Regulation (EC) 216/2008 was a landmark for the implementation of an EU wide drone policy. The new Regulation extended the scope of EU competence to all drones, irrespective of their weight or size, including the design, production, maintenance and operation of unmanned aircraft, their engines, propellers, parts and non-installed equipment, as well as the equipment to control unmanned aircraft remotely. The operation-centric approach reflects the fact that drones can be used for a large number of missions (recreational, exploration, delivery, etc.) that all display different levels of risks for other airspace users. This complexity could not be reflected by a framework only based on criteria such as weight. The operation-centric approach also ensures that new developments are not hampered by unnecessarily heavy and costly rules and procedures, which is in line with the Commission's Better Regulation approach. The new EASA Basic Regulation gave the Commission the legal power to adopt implementing and delegated acts in order to implement the essential requirements contained in the Regulation and guarantee a high and uniform level of civil aviation safety. 4.2.2Adoption of detailed implementing rules allowing effective drone operations and the development of industry standards In line with the operation centric approach embedded in Regulation 2018/1139, the EU drone regulatory framework should therefore be able to address safety and security concerns of different types of drones and operations, keeping in mind the risk level of the operation. Accordingly, the Commission adopted in 2019 two Regulations: Commission Delegated Regulation 2019/945 on unmanned aircraft systems and on third-country operators of unmanned aircraft systems and Implementing Regulation 2019/947 on the rules and procedures for the operation of unmanned aircraft. Limited to outdoor operations, Implementing Regulation 2019/947 applies since 31 December 2020. It lays down detailed provisions and conditions for the operation of drones, including the requirements to qualify as a remote pilot, minimum age of the pilot, requirements regarding the drones' airworthiness requirements, risk assessments, cross border operations, registration of the drone and its operator and competent authority. Regulation 2018/1139 introduces an approach to safety rules proportionate to the risk of the operation conducted by the aircraft. This approach is reflected in Article 3 of the Commission Implementing Regulation (EU) 2019/947. This article defines 3 categories of UAS operations, ‘open’, ‘specific’ and ‘certified’, corresponding to three levels of risks (low, medium, high). They are addressed by three different set of rules, all including a combination of rules on the design of the UAS and on its operations. The conversion of existing authorisations, certificates and declarations issued under the previous (nationally applicable) regulations could take place until 31 December 2022. A limited number of provisions will apply as from 1 January 2024, e.g. European Standard Scenarios or the use of drones in the Open category (linked to the creation of appropriate European standards). Commission Implementing Regulation 2019/947 allows Member States to further specify certain elements such as the minimum age for remote pilots and geographical zones for safety, security, privacy, and environmental reasons. Member States may: ·prohibit certain or all drones operations, request particular conditions for certain or all drones operations or ·request a prior operational authorisation for certain or all drones operations; ·subject drone operations to specified environmental standards; ·allow access to certain drone classes only; ·allow access only to drone equipped with certain technical features, in particular remote identification systems or geo awareness systems. Commission Delegated Regulation 2019/945 entered into force in June 2019 and was immediately applicable. It lays down the technical requirements relating to the unmanned aircraft itself. More specifically, this act lays down the regulation on: ·the product requirements for the design and manufacture of drone; ·the obligations of economic operators, importers, and distributors; ·the definition and requirement of presumption of conformity as well as the type of drone whose design, production and maintenance shall be subject to certification;

·making drones intended for use in the 'open' category and remote identification add-ons; ·third country drone operators when they conduct drone operation pursuant to Implementing Regulation 2019/947 within the single European sky airspace. Under Commission Implementing Regulation 2019/947, national competent authorities must establish and maintain registration systems for drones, whose design is subject to certification and for drone operators whose operation may present a risk to safety, security, privacy, and protection of personal data or the environment. On visual and noise pollution, limits reflecting the state of the art in the market have been introduced for small drones with a weight of less than 4 kg and which may be flown close to people by virtue of Regulation (EU) 2019/945. These limits will become even lower over time. In addition, further local noise constraints can be set in respect of ‘UAS geographical zones’. Directive 2002/49/EC on noise also imposes to all agglomerations of more than 100.000 people to prepare action plans to manage and limit the noise from air operations including drones. On emissions, Regulation (EU) 2019/945 imposes that small drones must be powered by electricity. If managed properly, drone operations, particularly in urban area, can contribute to the reduction of air pollutants, rather than causing additional adverse health effects for the citizens. 4.2.2.14.2.2.1 ‘Open’ category The operations in the ‘open’ category are performed with drones with a Maximum Take Off Mass of 25kg, marked with a Class Identification Label, complying with the technical requirements set out in Regulation 2019/945, always maintaining a Visual Line of Sight between the drone and the remote pilot and at a maximum altitude of 120 meters. They present the lowest risk of operations and therefore do not require any prior operational authorisation, nor an operational declaration by the drone operator. 4.2.2.24.2.2.2 ‘Specific’ category If one of the conditions of the ‘open’ category cannot be met, the operation is considered as riskier than allowed under the 'open' category and must then comply with either the ‘specific’ or the ‘certified’ category conditions, depending on the level of the risk. If the operations falls in the ‘specific’ categories, the drone operators has several possibilities: First, to carry out a full operational risk assessment (Specific Operation Risk Assessment (SORA)) on which basis the competent authority may grant an operational authorisation. Secondly, submit an operational declaration of compliance with so-called European ‘standard scenarios’ (as defined in Annexes of Regulation 2019/947) to the competent authority. Such a declaration to the competent authority must contain: ·administrative information about the drone operator; ·a statement that the operation satisfies the operational requirement of a standard scenario; ·the commitment of the drone operator to comply with the relevant mitigation measures; ·confirmation by the drone operator that an appropriate insurance cover will be in place, if required by Union or national law. Once the competent authority has confirmed receipt of a complete declaration, the operation may take place. Thirdly, a light UAS (Unmanned Aircraft System) operator certificate (LUC) which gives the privilege to the Drone operator to start operations without requiring a prior authorisation. In the situation where an operator intends for the operation to take place partially or entirely in the airspace of a Member State other than the one of registration, the drone operator must provide the competent authority of the Member State of the intended operation with an application including: (1) a copy of the operational authorisation granted (in the initial Member State); and (2) the location(s) of the intended operation and eventual mitigation measures. The competent authority of the sought Member State will assess the intended operation and operational authorisation granted by the initial Member State and can then provide confirmation that the operation may be undertaken. In the event where a declaration of compliance has been made to another competent authority than the one of the member state where the operation would take place, then the operator provides the competent authority of the member state of the intended operation with a copy thereof, as well as a copy of the confirmation of receipt and completeness.

4.2.2.34.2.2.3 ‘Certified’ category The ‘certified’ category of operations presents the highest risk and therefore are subject to stricter safety requirements and conditions in order to ensure the highest level of safety which require the certification of the drone and the certification of the operator, as well as – where applicable – the licensing of the remote pilot. These conditions are applicable as soon as the operation is conducted in any of the following conditions: ·over assemblies of people; ·involving the transport of people; ·involving the carriage of dangerous goods, that may result in high risk for third parties in case of accident; ·Or if the drone has a characteristic dimension of 3 metre or more so as to mitigate the risks for third parties in case of accident. This category should allow a development of a whole new market called Innovative Air Mobility (IAM) (international, regional and Urban Air Mobility (UAM)) to emerge with a use of new types of vehicles, including drones. IAM would represent a major development for the transport of freight and people, particularly within or out of urban environments that can contribute to reduce emissions and increase road safety, while providing new services to all communities. 4.2.3Adoption of a regulatory framework for the provision of U-space services Fulfilling one of the policy objectives set in the Sustainable and Smart Mobily Strategy, the Commission adopted on 6 April 2021 an initial regulatory framework for U-Space, consisting of three Implementing Regulations (EU) 2021/664, (EU) 2021/665 and (EU) 2021/666. The U-space framework, which will be applicable as from 26 January 2023, will ensure the scaling up of routine drone operations in designated geographical zones while ensuring the safety of both people on the ground and traditional users of the airspace. It introduces new services for drone operators, allowing them to carry out more complex and longer-distance operations, particularly in congested, low-level airspace (below 120m), and when out of sight. The three U-space regulations cover the roles and responsibilities of the various entities involved in the definition of U-space, the provision of U-space services, and the minimum necessary services required for manned and unmanned aircraft to operate within the U-space. The intent of the U-space regulations is to ensure that any drone operator planning flights in U-space is required to subscribe to one of the U-space service providers (USSPs). Flights may only be performed after a flight authorisation has been requested and issued. The three main (new) actors from a transaction perspective are: the drone operators willing to provide a drone service to a customer; the USSP (enabling the drone operation); and finally, the Common Information Service. Peripheral actors include Air Navigation Service Providers (ANSPs) who will continue to provide air navigation services for manned aircraft, while USSPs provide U-space services for drones. ANSPs must collaborate with USSPs (on a price for service basis) to ensure flight authorisations are coordinated and to exchange information about the airspace designations. Member States have full authority on the designation of U-space and decide how their airspace should be accessed and restricted. In addition to the four baseline services required by the U-space regulation, Member States can require USSPs to provide additional U-space services to support safe and efficient drone operations. 4.3Research & Innovation on drones and related systems A large number of collaborative research and innovation projects addressing drones and Innovative Air Mobility, as disruptive fields of aviation, have been funded at EU level through various Commission research and innovation frameworks: ·Horizon 2020, which was the EU's research and innovation funding programme from 2014-2020 with a budget of nearly €80 billion. It included specific topics that funded transnational research projects researching, developing and testing drones for specific capabilities, from transport to civil protection to law enforcement and border management. ·Horizon Europe, which succeeded Horizon 2020 and is EU’s key funding programme for research and innovation for 2021-2027 with a budget of €95.5 billion. ·Connecting Europe Facility for Transport, which is supporting investments in building new transport infrastructure in Europe or rehabilitating and upgrading the existing ones. Between 2021 and 2027 the European Climate, Infrastructure and Environment Executive Agency will manage €25.81 billion to support transport infrastructure projects throughout the EU and beyond. ·The European Defence Industrial Development Programme (EDIDP), which, with a financial envelope of €500 million for 2019-2020, was the first ever EU grant programme targeting capability development and co-financing the joint development of (new and upgrading of existing) defence products and technologies. EDIDP was one of precursor programmes of the European Defence Fund. ·The European Defence Fund (EDF), which, with a budget of close to €8 billion for 2021-2027, promotes cooperation among companies and research actors of all sizes and geographic origin in the Union, in research and development of state-of-the-art and interoperable defence technology and equipment. Those projects addressing drones, including Innovative Air Mobility, are advancing the state of the art in multidisciplinary areas such as autonomous flights for transport monitoring, aerial means for search and rescue, and automated electric mobility. They are developing new know-how and are testing innovative solutions that help to make transport safer, more resilient and more environmentally friendly.

Public concerns about drones and IAM are also addressed. Research and innovation helps drones and IAM not only to become more safe and secure, quiet, and green but also more accessible, affordable, and acceptable by the public. 4.3.1Single European Sky ATM Research (SESAR) In 2017, the European Commission mandated the SESAR JU to coordinate all research and development activities related to U-space and drone integration. In 2017, the SESAR JU published the U-space Blueprint, setting out the vision and steps for the progressive deployment of U-space services from foundation services to fully-integrated operations. This was followed by the 2020 edition of the European ATM Master Plan, which incorporated a drone roadmap. In 2017 and 2018, the SESAR JU launched 19 exploratory research projects and demonstration projects aimed at researching the range of services and technological capabilities needed to make U-space a reality. The projects brought together some 25 European airports, 25 air navigation service providers, 11 universities, more than 65 start-ups and businesses, as well as 800 experts, working in close cooperation with standardisation and regulatory bodies, including EUROCAE and EASA. In the Horizon 2020 framework, the EU has invested €44 million into research and development through SESAR JU, namely €9 million for “exploratory research”, €30 million for “industrial R&D” and €5 million for “very large demonstrators”. Overall, by the start of 2018, the EU had provided grants for more than €400 million to drone related projects (covering both civil and military projects), 90% of which correspond to the 7th Framework and Horizon 2020 Programmes. In May 2019, SESAR JU launched an open call for exploratory projects within the framework of the SESAR 2020 research and innovation programme. The call covered a wide range of topics and aims at fostering new and innovative ideas to transform air traffic management in Europe. The SESAR 3 JU was set up in 2021 to build on the work and achievements of earlier SESAR research and innovation programmes (SESAR 1 and SESAR 2020) and accelerate the market uptake of innovative solutions through a portfolio of demonstrators and a fast-track mechanism. It is co-funded by the European Union through the Horizon Europe research and innovation programme and industry as follows: ·Horizon Europe - EUR 600 million ·Eurocontrol – up to EUR 500 million (in-kind and financial contributions) ·Industry - EUR 500 million minimum (in-kind and financial contributions) In addition, the Digital European Sky programme will benefit from funding for its demonstrators from the Connecting Europe Facility (in coordination with CINEA) to the value of at least EUR 200 million. 4.3.2European Climate, Infrastructure and Environment Executive Agency (CINEA) CINEA also managed a cluster of drone and IAM projects under the EU Research and Innovation programme Horizon 2020, combining several aeronautical disciplines together with cross-cutting areas to test and advance the pre-deployment of drones and new urban air vehicles in very different environments . This comprehensive approach includes the efficient integration with urban infrastructures, with energy and communication networks and with other transport modes. In addition to the Horizon 2020 and Horizon Europe programmes, CINEA also implements other key EU programmes such as the Connecting Europe Facility (CEF) for deployment of infrastructures, including for transport at large and air traffic management (ATM). In close cooperation with the SESAR Joint Undertaking, a call for proposals was launched under CEF in 2021, containing provisions for a series of Digital European Sky Demonstrators. The future demonstrators are a key tool to support the vision of delivering the Digital European Sky. A total budget of EUR 60 million is earmarked for the future demonstrators, which are expected to be launched in 2022 and to run until 2025. One of the CEF Digital European Sky topics is “U-space and urban air mobility”. To unlock the potential of the drone economy and enable urban air mobility (UAM) on a wide scale, a new air traffic management framework for low-altitude operations needs to be put in place. Known as U-space, the framework foresees a set of new services relying on a high level of digitalisation and automation of functions and specific procedures designed to support safe, efficient and secure access to airspace for large numbers of drones. As such, U-space is an enabling framework designed to facilitate any kind of routine mission, in all classes of airspace and all types of environments - even the most congested. 4.3.3European defence research and innovation Drones have been actively used in the defence sector over the last decades as well. The Commission launched in 2016 the European Medium Altitude Long Endurance Remotely Piloted Aircraft System (MALE RPAS) programme to ensure EU’s sovereignty in the field of Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) and to foster the European Defence Technological and Industrial Base (EDTIB). As part of the direct award project within the European defence industrial development (EDIDP) work programme, this project led by four European entities (Airbus Defence and Space, Leonardo and Dassault industrial partners), received an EU contribution of €100 million for a total cost of €300 million. The European Defence Fund, for which the EDIDP was a predecessor, is a powerful instrument to boost industrial Defence cooperation throughout Europe and increase EU’s technological edge and develop the capabilities that are key for the strategic autonomy and resilience of the Union. EDIDP had a budget of €500 million for 2019-2020, to be compared to the €8 billion from the EU budget dedicated to the European Defence Fund for 2021-2027. This means that the EU will become one of the top 3 defence research investors in the world.

4-8% of this budget will be set aside to support innovative disruptive technologies for defence that will boost Europe’s long-term technological leadership and contribute to high-end defence products. One category of actions considered is called “Digital Transformation” and includes calls and topics related to unmanned aircraft. Coherence with other EU initiatives is key and the Action Plan on synergies between civil, defence and space industries complements the European Defence Fund with the aim to avoid unnecessary duplication, enhance complementarity and ensure cross-fertilisation between civil, security and defence. The emergence of new types of platforms, from micro drones to larger drones, as well as the current development of MALE, offer an opportunity to foster synergies with sustainable and smart mobility objectives, improve the competitiveness of European industry and strengthen Europe's strategic autonomy in this key technical domain. This also represents an excellent opportunity for civil-military cooperation since many of the technological building blocks building up these systems, such as Detect and Avoid, autonomy, datalinks, electro-optical sensors and other payloads are paradigmatic cases of dual-use enabling technologies, which ideally should also have European origins. 5Presentation of the EU drone eco-system today 5.1The elements of the eco-system The Drone Value Chain includes many actors which are coming from the transport sector and beyond. To present the drone value chain, distinctions should be made between the systems/products put in place to enable drones to operate safely and securely; and the services (or groups of services) that drones can deliver to the end-customers, as presented in the figure below: The drone eco-system In more details, the B2B drone value chain includes several segments which are all interlinked: ·Drone operators (service provider) performing Innovative Aerial Services; ·IAM operators offering innovative transport services; ·Drone manufacturers which produce the hardware. This activity may also include the assembly of some components produced by third parties; ·Producers of other payloads to be integrated to the drones, e.g., for filming, inspection, cargo, monitoring or measuring purposes; ·Technology providers for the platform who develop equipment and software systems whether for communication, control of the flight, situational awareness, or to enable specific or autonomous operations); ·Distributors selling or renting finished drone to third companies; ·Ground infrastructure operators such as vertiports and airports; ·Air traffic management suppliers (e.g. ANSPs, U-space service providers, Common Information Service Providers); ·Telecommunication infrastructure providers, as well as navigation and surveillance infrastructure providers. These actors are grouped in the following drone market segments:

·Drone services market: primarily service providers and customers. The drone services market facilitates access to all industries as the final customer and eventually provides most societal value. For example: by safely operating drones for data gathering or inspections, data is delivered into value chains in sectors like agriculture, construction, security, etc., where it can be processed and analysed for specific purposes. The key point is: the drone is a data gathering instrument in a longer value chain that includes other technological applications to make best use of the data collected. ·Drone operations market: primarily drone technology developers and drone users/pilots. The drone operations market is the tool to deliver transport for passengers or cargo as well as to deliver drone services where the drone becomes a link in a full value chain. ·Enabling services and infrastructure market: primarily associated with the implementation of U-space services, and enabling service/infrastructure providers. The enabler for automated longer distance, scalable drone operations and drone services. This enabler should be as cost-effective as possible, while providing fair access to airspace for a diversity of drone operators from across the EU. Each individual link of the value chain needs in principle to be competitive to allow access by all industries potentially benefitting from drone operations and services, as well as final customers, and ultimately to provide societal value. 5.2Drone services offered today As introduced in section 2, drone operations can be classified in two main groups: (1)Aerial Operations - in this case, drones are used as daily tools in ever broadening fields such as inspection (pipe line, rail, windmill maintenance), agriculture, mapping, architecture, constructions, real estate, energy, environment and public safety (firefighting, search and rescue, border patrol, local law enforcement); (2)Innovative Air Mobility – where drones and electric Vertical Take Off and Landing aircraft (eVTOL) are used for the transport of people and cargo. 5.2.1Aerial operations The drone services market related to aerial operations is well established and includes the following mature use cases, with a confirmed or very short term expected commercial viability: ·Data collection, for example: aerial photography and data collection for scientific research; ·Surveillance, providing aerial security and monitoring; ·Surveying, inspection and maintenance, for example: improving urban planning; measuring building energy efficiency, allowing servicing of infrastructure in particular in environments where safety is a concern; ·Entertainment or advertising, for example: using a drone swarm to replace fireworks displays. This is by no means an exhaustive list and other use cases are developing rapidly and are expected to become commercially viable with 2 to 5 years, for instance: ·Precision agriculture: monitoring of crops, spraying, environmental protection, planting, etc; ·Emergency and other public services, including police, firefighting as well as natural disaster response. 5.2.2Innovative air mobility Innovative Air Mobility covers use cases related to the transport of goods and people. Those use cases show considerably less maturity and longer term expected commercial viability compared to most aerial operations. Indeed, we are at the dawn of small parcel delivery services by drone, with pioneer implementations existing in Europe (e.g. “Manna” drone delivery service near Dublin, Ireland, or “Wing” drone delivery service near Helsinki, Finland), and medical transport is also developing fast (transport of medical samples between hospitals and laboratories, delivery of prescriptions to remote areas…). However, operations related to the transport of people – or heavier cargo - have yet to materialise.

High noise levels, lack of helipads availability and high operational costs can explain the lack of success of passenger transport by helicopter so far. Recently though, the interest in Urban Air Mobility has been reinforced by the development of small, electrically powered Vertical Take-Off and Landing (eVTOLs) aircraft. An eVTOL aircraft is a type of manned or unmanned aircraft that uses electric power to hover, take-off and land vertically, without the use or need for a runway. In an initial phase, these vehicles will have a qualified pilot on board. In a later stage, it will then be possible to have the drone remotely piloted (from the ground) or even proceed to fully automated flights (remove the pilot on board or on the ground). Passenger drones may be used within large and sprawling urban areas as part of a new Urban Air Mobility approach, or to connect cities with regions that are either difficult to access by surface transport or lack the infrastructure or scale necessary to support traditional forms of aviation. Although the capabilities of these aircraft have been improved significantly, there are still performance issues that need to be addressed, linked for example to the batteries and range limitations, as well as social acceptance. Furthermore, their financial viability also depends on several conditions like the targeted level of safety, the fact that the first phase of commercial operations will be carried out with a pilot on board, initial higher costs related to the OEMs production and maintenance, traffic management and operational constraints related to social acceptance and which are examined in Chapter 8 below. 5.3Drones as an emerging sector of the economy The EIB monitors the evolution of the drone sector in particular for Urban Air mobility and U-space and provides funding and technical assistance including for infrastructures that will enable drone operations. However, as found by the EIB, most private sector entities in the drone ecosystem are small scale and some are yet without a robust business plan in place to achieve commercial operations. There is a reliance on central funds, grants and venture capital to invest in research and development projects. All of this suggests a need to mature the industry capability rapidly, which requires having funding and financing mechanisms available to suit each part of the cycle and avoid falling into the first ‘valley of death’, as shown in the Figure below: (Source: European Investment Bank) Financial cycle of a business The European Investment Bank Guide to Finance for Drone Projects maps out the advisory and financial products that can potentially be used to support investments in drones, depending on the area of investment and the maturity of the market. The EIB itself identified a lack of products covering vehicles, associated technologies and enablers and maintenance during the early commercialisation stage. These areas might be covered by venture capital activities. Venture capital is more abundant outside of Europe, with the US leading the world in drone venture capital investment. The majority of investments are focused on drone operations (e.g. drone hardware) rather than enabling systems and end services. There is an incentive for European start-ups to move to the US to seek venture capital funding for their projects. Europe also lags behind both the US and China in total investment in drone services and number of vehicles respectively. A constraint faced worldwide is that investment in this immature industry is a high risk and long-term horizon investment. The projected development of the drone market in the future suggests profitability in various applications by 2040, but timescales remain imprecise and perhaps speculative. The main issue is the lack of established business models for drone services, which means any business who wants to invest in drone services needs to be willing to sustain losses for a relatively long amount of time while the market matures . 6The potential benefits of a viable drone eco-system in Europe 6.1Growth and Jobs There is a variety of studies on the current and future expected market size of the drone market. Based on an analysis of the available studies and forecast, the estimated amount of the commercial value of drones in 2030 ranges between € 10,3 billion and € 20,4 billion, with the most likely outcome being € 14,5 billion, with an associated CAGR of 12.3%, as presented in the figure below: Source: Drone Strategy 2.0 Fact-Finding Study, Ecorys Estimated commercial value of drones (in EUR billion) in Europe Furthermore, a recent study by the JRC , currently being updated to include more scenarios and to compare the EU situation with the US one, has shown that the existing land-use patterns in the EU can ensure financial viability of drone delivery services in most cities. In addition, as shown in the next figure, the research shows that as soon as the demand for freight deliveries by drones increases, the number of financially viable drone “nests” in the EU could be substantially higher than in the US (due to the land-use pattern of EU cities) thus representing a potentially more interesting market: Number of estimated economically viable drone delivery nests as a function of Market Penetration (MP) for EU and US for a box cost of 0 and 0.5 euro. In general drone services are providing automated solutions, which have an impact on employment. These effects could work both ways (negative or positive) and likely in parallel. According to a recent study by the International Transport Forum (ITF), drones will increase productivity in some sectors. Businesses may also replace human centric tasks using other justifications, for example safety benefits associated with inspection of dangerous infrastructure. In practice a combination of both people and drones will likely be used over the short to medium term. As with all technological changes in the workplace, learning or reskilling programs would facilitate transitions in the labour market. Apart from employment effects related to the changing business models, drones could also create new tasks. Predictions with varying geographic scale and timelines are available for the potential number of operational drones show: ·A current baseline (2020) of between 100,000 – 200,000 commercial drones in use in Europe;

·A commercial drone fleet of between 400,000 – 800,000 in Europe in 2030 (with higher probability that it is closer to the lower bound). According to SESAR (2016), there is substantial job creation expected (such as localised operations, pilots, insurers and others). One might expect a large opportunity for jobs in the software development/automation and telecommunications /data industries. In total, the sector is conservatively expected to create roughly 100.000 direct jobs. When including wider employment effects (so called indirect effects), the total number of jobs at a European level rises to between 250.000 and 400.000 jobs towards 2035. To provide an idea of the potential number of jobs in the EU in 2030 the support study took the employee productivity figure used by SESAR JU in their drone outlook study and scaled it based on updated market predictions. The figure applied is 100.000 euro per employee. The study has determined a low, medium and high scenario, which have a similar growth rate as the market value predictions. In the medium scenario, the total number of direct employees is estimated at around 145.000 in Europe in 2030. The results are presented visually in the Figure below: Source: Drone Strategy 2.0 Fact-Finding Study, Ecorys Estimated number of (direct) employees in Europe (x 1.000 employees) Indirect effects are retrieved from macroeconomic multipliers produced by the OECD . The relevant multipliers from sectors such as computer related activities, electrical machinery, etc. range between 1.9 and 3.0. The multipliers provide a simple method for determining indirect employment impacts based solely on the expected level of direct employment impacts. Using these multipliers the external study suggests that the total employment impact of the drone industry (direct and indirect) should range between 200.000 to 600.000 additional employees in 2030. 6.2Decarbonisation and circular economy 6.2.1Decarbonisation Decarbonising transport remains one of the major challenges ahead in order to mitigate climate change. Globally, roughly 25% of the greenhouse gas (GHG) emissions are emitted by fuel combustion from transport. And as of today, the sector remains dependent on oil for 92% of its energy demand. In the EU, transport emissions represent around 25% of the EU’s total greenhouse gas emissions. A clear path is needed to achieve a 90% reduction in transport-related greenhouse gas emissions by 2050, in line with the European Green Deal objectives. Although emissions reduction is possible across almost all drone use cases, the emissions reduction potential is mostly associated with logistics and passenger transport. A number of drone applications are powered through electric propulsion (and other emerging technologies) providing a decarbonised alternative to current modes of transport and therefore supporting the Paris Agreement and the European Green Deal objectives to achieve net zero emissions. Drones have the potential to contribute to the decarbonisation and modernisation of the transport and mobility system, addressing its negative impact on the environment and improving the safety and health of European citizens. However, while drones are emission free the production of electricity may generate emissions. Most drones are powered by electricity and produce zero tailpipe emissions creating no direct (scope 1) greenhouse gas emissions, as combustion engine drones will likely not be used in the future. This means they can immediately contribute to reduce net greenhouse gas emissions. All drones will consume energy creating indirect (scope 2) emissions. The amount of energy used and subsequently the amount of scope 2 emissions will depend on the design of the drone, its payload, the energy mix used for electricity production, and the method of electricity transmission to the battery. The production and scrapping of drones at the end of their lifespan will also consume energy and produce indirect (scope 3) emissions. The net emissions of drones compared to traditional modes of transport will depend on the specific use case, the local context and the source of energy supply. Given the forecasted fast drone development in the future, the environmental impact of drones must be given high consideration and requires further research. Expected environmental impacts will especially arise from the manufacturing, the utilization, and the waste streams of drone products and of the related infrastructure as well as by the development of drone operations in metropolitan areas, which will entail the development of suitable network of vertiports. Drones have the potential to reduce energy use especially if sustainable use of batteries is mandated. Transport-related CO2 and other emissions could be reduced (e.g. last mile transport for low weight goods when energy comes from sustainable sources) in comparison to traditional modes of transport. On the other hand, there is clearly a debate about negative externalities that might be realised with the further scaling of drone activity (such as noise related impacts). These environmental impacts on noise, air pollution and wildlife are further addressed in chapter 8.1.4 below. The potential emissions reduction for drone delivery were estimated in the support study by means of a “quick scan” analysis. The following methodological steps were taken to determine the potential emissions reduction for goods delivery: ·Step 1: Determining the commercial value of good delivery services and share of goods delivery within the estimated economic value of the European drone industry; ·Step 2: The added value (expressed in euro p. eVTOL unit) of delivery drones is estimated; ·Step 3: Assessing the number of delivery drones towards 2030; ·Step 4: Estimating the number of potential drone deliveries and freight potential by assuming the average productivity of delivery drones; ·Step 5: Retrieving the emissions key figures from existing literature;

·Step 6: Providing an estimated bandwidth of the potential emissions reduction from drone delivery services by determining the expected modal shift (e.g. electric van, diesel van, cargo bike and drone). By replacing cargo deliveries and last-mile express deliveries from traditional means of transport to drone services, the emissions reduction potential is estimated at around 120,000 ton CO2 in 2030 in Europe. The results (and bandwidths associated with the analysis) are presented in the figure below. (Source: Ecorys) Source: Drone Strategy 2.0 Fact-Finding Study, Ecorys Potential emission reduction for drone deliveries (in ton CO2) Several scientific studies in the field of the impact on the level of CO2 emissions from drone deliveries have been performed. Besides the impact in the drone delivery domain, there is also impact on decarbonisation expected in other applications and sectors. For example, drones might be used instead of high emissions vehicles in some agricultural practices such as spraying or planting. The findings from several studies (non-limitative) can be briefly described as follows: ·Park, J., Kim, S., & Suh, K. (2018) studied the environmental impact of drones compared to motorcycle delivery and differentiating between urban and rural areas. The results showed that global warming potential (GWP) per 1 km delivery by drone was one-sixth of a motorcycle delivery. In addition, the particulates produced by drone delivery were half that of motorcycle delivery. The researchers conclude that the actual environmental impact reduction in case of delivery distance was 13 times higher in a rural area than in an urban area. When increasing the use of environmentally friendly electricity systems, for instance solar and wind power, this could further enhance the environmental effects of a drone delivery system. ·Borghetti, et al (2022) investigated the viability of last-mile delivery drones in Milan, where they used stated preference survey and financial analysis. Findings show a high propensity by end users to use last-mile delivery by drones can be successfully used to deliver small and light packages, reducing environmental and social impacts, and ensuring profits for the transport provider. In light of the financial viability of last-mile delivery drones, they could be a solution to reduce traffic congestion and CO2 emissions. ·WING investigated – by means of ex-ante and ex-post studies – the effects of drone deliveries to society. One of these studies are performed by Gaia Consulting Oy , which studied the potential benefits of drone deliveries in Finland. The benefits are expressed for local businesses, consumers and society. Societal benefits are expressed via the reduction of vehicle kilometers travelled by road (equal to a reduction of 11 million km); reducing CO2 emissions (reduction of 2.000 t CO2); reducing road accidents (38 less road accidents). For local businesses and consumers, the benefits are linked to lower delivery costs (45% lower costs) and the connectivity (expressed via delivery reach and product variety). 6.2.2Circular economy The development of a drone value chain should also give careful consideration to circular economy aspects. The risks associated to the lack of raw materials are concrete and the EU cannot accept being dependent on external support for the implementation of this key technology. On the other hand, this issue may represent a significant opportunity for the European industry for developing the drone industry, building competitive advantage on environmental sustainability and Circular Economy. The waste of electronics components must be avoided and the drone’s end-of-life opportunities should and could be more effectively and efficiently addressed now at the beginning of the fast-emerging drone sector. Moreover, when looking at drones we cannot focus only on the airborne segment. To execute their tasks, drones require dedicated ground infrastructures. The same Circular Economy considerations apply to the ground segment as drone operations spread across the territory. 6.3Digitalisation The development of Innovative Aerial Services and the digital transformation go hand in hand. Drone technology and its multiple applications are based on a high level of digitalisation and automation, as described below. At the same time, drones can deliver accurate and actionable data to improve operational workflows, streamline processes and contribute to finding digital solutions in a wide variety of use cases, such as agriculture, construction, mining, surveillance, and inspection. Embracing digital technologies has become essential for many businesses to remain competitive in an ever increasingly interconnected economy. Digital technologies and products have also the potential to lower the environmental footprint of the economy and lead to higher energy and material efficiencies. The 2030 Digital Compass identified five key industrial ecosystems for digital transformation: ·Manufacturing; ·Health; ·Construction; ·Agriculture; and

·Mobility. Out of these, at least four (health, construction, agriculture, and mobility) have the potential to directly benefit from the introduction of aerial operations and innovative air mobility to drive changes in their respective sector, as illustrated by the drone-use cases listed in 5.2. But other ecosystems could also reap benefits from synergies with the technological development brought by drones, in particular in the fields of automation and artificial intelligence. This digital transformation will not only concern industrial ecosystems but also affect public services, and enable an efficient, holistic, and easy access to public services to all citizens. Here again drone services have the potential to support this transformation by connecting remote communities and ensuring the continuity of public services. The contribution of drones to the digitalisation of the economy is not limited to drone services provided to industrial and public sectors but extends across the whole drone value chain. Drone operations and enabling services have indeed the potential to be instrumental in the digitalisation of aviation. First, drone vehicles are catalyst for innovation in aviation. They are not only spurring the electrification of aviation and the development of more sustainable aircraft, but they are also advancing automation and connectivity at an unprecedented speed in air transport. Autonomous flight technology should enable accurate operations (including detection and avoidance of other vehicles and obstacles) without any involvement of human operations. Also here, the drone operations market is expected to act as a catalyst for the development of aviation, functioning as an enabler of innovation and digitalisation. The standard SAE J3016 developed for road vehicles is commonly used as basis when assessing the level of automation within drones. The standard defines six levels from no automation to full automation. Currently, due to restrictions in permitted level of flight automation, the use of drones still faces limitations. Nevertheless, drones are applied at various levels of autonomy, as illustrated in the figure below. Drones are applied at low automation degree in inspection & maintenance; location & detection; photography and filming, and monitoring. At partial automation degree, drones are used in mapping; spraying & seeding, measuring; and surveying. At degree of conditional automation, drones are used in mapping, delivery and surveying. Initial steps are taken in high automation in the case of photography and filming. A enabling service such as U-space, the set of digital services and operational procedures designed to support a safe, efficient, and secure access to airspace for large numbers of drones, can be an accelerator of the ATM innovation life cycle, facilitating faster, lower risk adoption of new technologies or approaches (automation, AI, cloud, etc.) in manned aviation. Such disruptive innovations can reduce innovation cycles from about 30 years that are typical in traditional aviation to about 5-10 years. To achieve this, the development and deployment of the integration of drones into the airspace, and in particular the development and implementation of U-space services, may be used as a ‘laboratory’ that can support faster life cycles in the manned aviation environment, and ultimately the implementation of the digital European sky. The digital European sky leverages the latest digital technologies to transform Europe’s aviation infrastructure enabling it to handle the future growth and diversity of air traffic safely and efficiently, while minimising environmental impact. In doing so, these technologies enable the system to become more modular and agile, while building resilience to disruptions, traffic growth and diversity of air vehicles. Drones, relying on an operations-centric approach and a digitalised system, can be a catalyst towards increased levels of digitalisation of the entire aviation system, currently still relying on a human-centric approach, for example in ATM. 7Vision and strategic objectives 7.1Vision Setting out a vision involves on the civil side to cater for the situation of three different but interlinked markets: Aerial Operations, Innovative Air Mobility and U-Space services as described above. The drone eco-system also includes the defence/military dimension, as both sides stand to benefit from technological synergies. This vision, developed by the Drone Leaders Group (see A.4) for 2030, can be formulated as follows: By 2030 drones and their required eco-system will have become an accepted part of the life of EU citizens and Member States. They will be used to provide numerous services to the benefits of diversified civilian and defence end-users, including EU citizens, organisations, States, and industry. These aerial operations will include emergency services, inspections, and surveillance, using drones as flying Internet of Things (IoT) platforms to gather data, as well as for the delivery of goods. Innovative Air Mobility (IAM) services will also have started to provide regular people transport services in various European cities and for some regional connections, initially using aircraft with a pilot on board but with the aim to fully automate their operations. Drone services will effectively integrate or complement existing transportation systems and contribute to the decarbonisation of the transport system, while minimising their impact on the environment throughout their life cycle. Urban Air Mobility (UAM) will have started to become a part of the future urban multimodal intelligent mobility ecosystem and the infrastructure enabling these services will be widely deployed and integrated. A wide spectrum of distinct types of drones and use cases will coexist in the future. The EU legislator, the Commission, the European Union Aviation Safety Agency (EASA) and the Member States all have an institutional responsibility to safeguard the safety, security and efficiency of their operations. They will ensure that all drone services are provided in a manner that ensures safety, security, privacy, and affordability, in line with citizens’ expectations and addressing their concerns. Drones used for the transport of people and goods will be particularly oriented to the achievement of publicly accessible services, thus creating benefits for citizens and local communities. The current U-space regulatory framework will have been completely rolled out in a seamless EU market. Additional advanced U-space services will support large scale highly automated and digitally connected affordable, safe, secure, and environmentally friendly unmanned aircraft operations in several Member States. The integration between manned and unmanned traffic in the same airspace will have been initiated, inside and outside U-space airspace.

The EU drone industry will become viable, and accessible to EU citizens and businesses with an active participation of actors of all sizes, including a variety of diversified SME’s, fostering collaboration between all actors, and broadening the spectrum significantly beyond the limited number of global multinational stakeholders. Civil-defence industry synergies will be systematically identified and exploited. They will benefit both sectors. They will improve the competitiveness of European industry and strengthen Europe's strategic autonomy, by allowing Member States to rely on competitive UAS technology of European origin. The drone eco-system thus created will provide jobs, promote, and protect European technological know-how and allow for growth opportunities for the EU economy as a whole, enabling European companies, including new SMEs to grow and flourish as global leaders. This was the basis for the Commission vision spelled out in the Drone Strategy 2.0 for a Smart and Sustainable Unmanned Aircraft Eco-System in Europe. 7.2Strategic objectives As set in the Commission roadmap for the Drone Strategy 2.0 , the following elements are part of the strategic objectives of this strategy: The strategy should foster the uptake of this innovative technology in Europe, while establishing the right balance between safety, security, health protection and other societal concerns, and a sustainable economic environment. The safety, security, health protection and privacy of people in the air and on the ground remains the priority. In addition, the future policy framework should provide an innovative, cost-efficient and market-led business environment for the development and take-up of new drone services and technologies within the EU’s internal market. It should also guarantee their widest possible social acceptance. The Drone Strategy 2.0 should provide a comprehensive policy package and address obstacles to the development of new drone applications and transport services and to the competitiveness of this industry. As outlined in the Action Plan on synergies between civil, defence and space industries, reaping synergies between the civil, security and defence use of drones and related technologies, including counter-drones’ solutions, can be an important success factor. The ambition of the strategy is therefore to further develop the drone sector, in light of the European Green Deal, Smart and Sustainable Mobility Strategy, Digital Strategy and other Union policies. 7.3SMART objectives The Drone Leaders’ Group proposed a number of SMART (Specific Measurable Achievable Reasonable Time-bound) objectives to be used to measure progress on achieving the above Vision and the targets to be reached by 2030. In this regard, the Group agreed on the following set of objectives: ·Number of cities/regions that will be served by IAM regular commercial services (Target for 2030: at least 45 in the EU and at least one per Member State) ·Number of Member States where emergency health services (medical samples, defibrillators, air ambulances) will be provided using drones (Target: services used in at least 20 Member States) ·Use of European U-spaces Airspace by commercial drone flight operations (Target: at least 100.000 a day) ·Number of EU Member States where advanced U-space Services (additional to those defined in the current regulatory framework) are operational in at least one U-space. (Target: at least 6 Member States) ·Number of USSPs designated in each U-space airspace (Target: at least 2) ·Safety level achieved (Target: the ratio between the number of accidents vs the number of drone flights is as low as required for manned aviation) ·Aerodromes falling under the EASA Basic Regulation, cities with over 100.000 inhabitants, and critical infrastructures will have assessed the security risk related to drone incidents and put in place procedures and measures that will protect them from such incidents proactively and reactively (Target: 100%) ·Number of assessments run by the EIB “European Drone Investment - Advisory Platform” and number of loan agreements granted by European Investment Bank (EIB) to drone sector stakeholders (Target: increased percentage respectively of 10%, year on year)

·Carbon emissions of urban and regional IAM operations (Target: 0%) ·The civil and military drone technology used in Europe will be designed and/or produced in Europe (Target: at least 50% of total value of drones used in Europe) ·Number of Universities / Technical Schools that offer drones subjects or specialisations (Target: at least 40 in the EU and one per Member States). ·Turnover in the overall drone eco-system and its contribution to EU GDP (Target: at least € 15 billion) 8The elements of a thriving EU drone eco-system in 2030 8.1Building the European drone services market As mentioned, the drone sector is composed of several different dimensions including State activities (including security, military and rescue-services), non-commercial use (hobby), and commercial activities (including hardware and software developments, maintenance, the provision of infrastructures such as vertiports). The current EU legal framework already offers many possibilities for the operation of small drones used for recreational or professional purposes. However, the feedback received during the consultation process showed that the current regulatory framework does not sufficiently support the scaling up of commercial drone operations, particularly for some of the most promising use cases. Furthermore, the current framework, for instance, does not allow the transport of people. There is thus a need to define further regulatory requirements, notably in urban areas. Whilst economic players from across the whole drone industry and beyond are joining forces to develop drone activities, it requires addressing several obstacles to make them become a reality by 2030. The regulatory dimension is only one aspect of these challenges faced by the Drone sector, which comes across the 10 different areas identified in the Drone Strategy 2.0. The first steps to address them was to define a clear vision. The high-level vision set out above is providing the foundation for the next steps to be taken at EU level to develop a viable drone eco-system in Europe. 8.1.1Improving airspace capabilities (U-space development and integration with Air Traffic Management) The provision of air traffic service follows the demand for air transport and other airborne operations. Since the beginning of aviation, this demand has generally seen a pattern of growth. Whenever ATM is not able to deliver capacity where and when it is needed, traffic limitation measures are taken to continue to ensure safety, causing rapid increases in delays and thereby a deterioration in environmental and cost efficiency and the achievement of airspace user needs. As the drone service market continues to grow and take shape in Europe, the pressure is on to make sure that these air vehicles are safely and securely integrated into our already busy airspace. Transforming infrastructure to support such operations is critical to harnessing the potential of the sector, unlocking market growth, jobs and services to EU citizens. But a simple adaptation of our current air traffic management system is not enough; accommodating these air vehicles in the numbers forecasted required a new approach. Therefore, to unlock the potential of the drone economy and enable innovative air mobility on a wide scale, a new ATM paradigm was developed to safely cater for a high level of expected low-altitude unmanned operations. This concept, referred to as U-space, includes new digital services and operational procedures and its development had already announced in 2017. U-space is a set of services and procedures relying on a high level of digitalisation and automation of functions to support safe, efficient and secure access to airspace for large numbers of drones. It provides an enabling framework to support routine drone operations and addresses all types of missions including operations in and around airports. As mentioned in section 4.2.3 above, the European Commission adopted in 2021 the U-space package - three regulations that together create the conditions necessary for both drones and manned aircraft to operate safely in section of our airspace known as the U-space. These regulations introduce new services for drone operators, allowing them to carry out more complex and longer-distance operations, particularly in congested airspace, and when out of sight. U-space creates and harmonises the conditions needed for manned and unmanned aircraft to operate safely, to prevent collisions between drones and other aircraft, and to mitigate the risks of drone traffic on the ground. U-space is expected to provide the means to manage safely and efficiently high-density traffic at low altitudes involving heterogeneous unmanned vehicles, including operations overpopulated areas and within controlled airspace. Ultimately, U-space will have to integrate seamlessly with the ATM system to ensure safe and fair access to airspace for all airspace users, including IAM flights departing from airports. The current U-space Regulation identifies an initial set of U-space services required to implement an initial U-space environment. In order to enhance U-space deployment to support IAM, it is necessary to continue research and development in accordance with the European ATM Master Plan (MP) vision, and the Roadmaps to achieve this as described in the Strategic Research and Innovation Agenda (SRIA) for the Digital European Sky. The first SESAR 3 JU Digital Sky Demonstrators addressing U-space will focus on direct support for the deployment of initial services, in support of the U-space Regulation. In parallel, research should continue to develop the overall concept of operations for U-space and IAM, both in terms of service definition and in the supporting technologies, in order to deliver more advanced services. This development should be designed to increasingly consider the ATM and U-space environments together so that, by the time the full U-space environment is deployed, the two environments will have become one, fully integrated air environment seamlessly encompassing small drones, IAM, ATM, RPAS and Higher Airspace Operations (HAO). The introduction of new types of aerial vehicles within the airspace requires ensuring a fully collaborative approach between all actors with the objective of ensuring an efficient interface between U-space and ATM, as well as avoiding airspace fragmentation. An efficient U-space–ATM interface is required to enable an adequate, robust and timely exchange of U-space information services between various U-space stakeholders such as drone and IAM operators, USSPs, ATM service providers, data service providers, aeronautical data providers and authorities. The relevant solutions are expected to have a positive impact on access and equity, enabling seamless ATM / U-space high-density automated and fully digitalised operations managed in close cooperation with UAS/IAM fleet operators.

In a longer term, a fully integrated ATM / U-space CONOPS definition is required to cover seamless operations inside and outside controlled airspace, further defining the interface between ATM and U-space, as well as examining the corresponding information exchange concept and requirements. Information exchange will be critical to enable a safe convergence of U-space and ATM. The possibility of a fully integrated airspace without segregation between U-space and ATM users is the ultimate goal. A fully integrated ATM / U-space ecosystem without segregation between U-space and ATM operations also requires the setting up of common fundamental enablers. Some of these enablers include the definition of a common altitude reference system (CARS), separation minima, safe operating distances from buildings and fundamental aviation tenets, such as airspace classification. The need to revise the rules of the air becomes necessary to consider the specificities of unmanned traffic in general, as well as of mixed traffic (unmanned and manned). Such work has been initiated by EASA, as part of the process of establishing a comprehensive set of new regulations to enable operations of UAS in the ‘certified’ category and aircraft with VTOL capability to deploy the potential of the IAM. Systems allowing drones to have a capability to “detect and avoid” (DAA) and/or “sense and avoid” (SAA) other aircraft do not exist yet and EASA objective is to develop them in accordance with a European harmonised set of validated standards adapted to the European airspace and working in all airspace classes. Therefore, there is a need to use strategic and tactical mitigation means offered by the ATM/U-space system in a first phase until these systems are available, provided that the traffic and traffic complexity is such that safe operations can be guaranteed. Always keeping safety as the primary goal, further work will be required on enablers for automation and autonomy for U-space and IAM. In this framework, a critical aspect of the integration will be the role of humans, particularly regarding the high level of automation that will be delivered by U-space services and the known automation disparity between ATM and U-space. IAM integration in the ATM / U-space ecosystems is also a specific research topic, as well as the challenge of how to support the transition from piloted vehicles to IAM/autonomous operations. Of course, the evolution of the ATM / U-space convergence will need to be synchronised and coordinated with the development of IAM services and the certification of IAM vehicles. Special consideration should be given to the operational limitations of these new vehicles and how U-space and ATM can contribute to their operational safety by protecting their operations in contingency and non-nominal situations. As research continues in each thread, lessons from one environment should be applied to each of the others such that the final environment is safe, economically viable and environmentally sustainable. This will contribute to making aviation smarter and more sustainable, and delivering the Digital European Sky. On the topic of Communication, Navigation and Surveillance (CNS), the SRIA of the SESAR3 JU clearly describes the transformation from three separate CNS domains into one integrated CNS (ICNS) environment. This includes all current CNS technologies used for ATM, but also those needed to support U-space, IAM, RPAS integration and HAO. The research programme, as envisaged in the SRIA, should look to ICNS as the mechanism by which all airspace users can inter-operate safely, while reducing costs and environmental impact through rationalisation and multi-use of existing and developmental technologies. This integration should include technologies from other domains, such as the telecommunications and the space industries, and should address increased connectivity through digital communications as well as the more conventional elements. Research and demonstration under this Action should address both technological issues and the specific performance and certification requirements of all relevant technologies that arise from the evolving U-space and IAM domains. 8.1.2Facilitating Aerial Operations As mentioned in Chapter 2 above, the terms “Aerial Operations” refers to the use of new aerial technologies and services provided to customers for other purposes than the transport of people and freight. These small drones equipped with advanced sensors and AI technologies can be deployed in diverse sectors such as construction, railways, ports, agriculture, energy, public safety, security, filming, insurance, real estate, transport of small payload, etc. Companies’ drone programmes can be either outsourced to third companies offering specialised drone services or partially developed in-house, using leased fully tested material from third company suppliers or finally, they can be fully developed internally. In this case, it may also require buying hardware, software and consulting services at an initial higher cost for their implementation. The aerial operations eco-system is largely composed of Small and Medium Enterprises providing hardware, software and services to commercial drone operators (see description in chapter 5.2.1 above. Most companies which are developing drone programmes chose to do it internally and to a large extent operations are conducted in visual line of sight. In fact, despite the risk-based operation-centric approach underpinning the development of the regulatory framework for drones, one of the key challenges faced by companies in the commercial drone sector is to be able to build up drone programmes based on fully autonomous drone operations in beyond visual line of sight conditions. As highlighted in the Communication, one of the missing regulatory elements at a European level is to perform operations at both end of the drone operations’ risk spectrum in the ‘specific’ category. On the one hand, for simple low risks operations in Beyond Line of Sight Operations or Extended Visual Line of Sight, which are not falling under the ‘open’ category and are not yet subject to a European standard scenario, there is a need to develop further European Standard Scenarios. On the other hand, for more risky operations there is a need to develop methodologies and procedural mechanisms which can facilitate the granting of an operational authorisation from the competent authority. Whenever operations do not fall under the ‘open’ category, drone operators must carry out a risk assessment to determine under which category the operation will fall, ‘specific’ or ‘certified’. Many stakeholders highlighted the complexity of conducting this risk assessment and the fact that the operation approval granting process might be a lengthy one and its outcome uncertain. This is in particular the case if the level of robustness of any of the operational safety objectives linked with the drone design is considered “medium”, as the national competent authority could in this case require a full design verification of the drone by EASA. One of the possibilities to facilitate the launching of a low-risk operation in the ‘specific’ category is that the operation falls under a European Standard Scenario as it would suffice for UAS operators to submit an operational declaration of compliance to the competent authority. The widespread consultations with industry stakeholders highlighted the need to improve some regulatory aspects related to the ‘specific’ category, as pending the development of new European standard scenarios, drone operators have to undertake the SORA in order to receive an authorisation from the competent authority which is perceived to be more cumbersome and may generate some business uncertainty. One of the risks for the drone operator is that the competent authority may reach the conclusion that the operation should be performed under the conditions of the ‘certified’ category instead of the ‘specific’ category, which requires the certification