COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010
Date: 2013-05-29
Institutions: European Commission
Subjects: EU financing, EU programme, marketing, observation, public safety, satellite, space research

EUROPEAN 
COMMISSION 

Brussels, 29.5.2013  
SWD(2013) 190 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a Regulation of the European Parliament and of the Council  

establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010 

{COM(2013) 312 final} 
{SWD(2013) 191 final} 

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COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a Regulation of the European Parliament and of the Council  

establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

Procedural issues and consultation of interested parties...............................................5 

Identification.................................................................................................................5 

Organisation and timing ...............................................................................................5 

Stakeholders consultation .............................................................................................5 

Scrutiny by the Commission Impact Assessment Board..............................................8 

Context..........................................................................................................................9 

Problem definition ......................................................................................................12 

The problem that requires action ................................................................................12 

Upgrading the system to routine operational status....................................................14 

Underlying drivers of the problem .............................................................................14 

Establishment of an appropriate governance structure ...............................................14 

3.5.  Who are the most affected groups? ............................................................................15 

3.6. 

3.7. 

3.8. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

5.5. 

5.6. 

5.7. 

5.8. 

6. 

Foreseen evolution of the problem .............................................................................16 

The risk of non-sustainability .....................................................................................17 

Does the EU have the right to act? .............................................................................17 

Objectives ...................................................................................................................19 

General objectives ......................................................................................................19 

Specific Europe 2020 policy objectives .....................................................................19 

Operational policy objectives .....................................................................................20 

Consistency with and relevance to other EU policies ................................................20 

Synergies with other DG Enterprise programmes ......................................................21 

Options and impact analysis .......................................................................................23 

Different options on budget allocation .......................................................................23 

Methodology...............................................................................................................25 

Options description.....................................................................................................27 

Analysis of impact of options on budget allocation ...................................................28 

Cost-Benefit Analysis.................................................................................................31 

Key enabling factors and the impact of a reduced budget..........................................32 

Expenditure profile considerations .............................................................................33 

Conclusion ..................................................................................................................33 

Options and impact analysis on Governance..............................................................34 

6.1. 

State of play ................................................................................................................34 

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6.2. 

Options on programme governance............................................................................35 

6.2.1.  Option A: Commission in charge of overall coordination and management .............35 

6.2.2.  Option B: Delegation of the management to an existing European Agency ..............35 

6.2.3.  Option C: Delegation of the coordination and management to the European Space 

Agency........................................................................................................................35 

6.2.4.  Option D: Delegation of the management to a new Agency ......................................35 

6.3. 

Impact analysis on governance ...................................................................................35 

6.3.1.  Option A: Commission in charge of management .....................................................35 

6.3.2.  Option B: Delegation of the management to an existing European agency ...............36 

6.3.3.  Option C: Delegation of the coordination and management to the European Space 

Agency........................................................................................................................36 

6.3.4.  Option D: Delegation of the management to a new agency .......................................36 

6.4. 

6.5. 

7. 

7.1. 

7.2. 

7.3. 

Decisions on governance ............................................................................................36 

Considerations on ownership......................................................................................37 

Monitoring and Evaluation .........................................................................................38 

Evaluation ...................................................................................................................38 

Monitoring ..................................................................................................................41 

Anti-fraud measures....................................................................................................41 

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1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Identification 

The  European  Earth  Observation  programme  Copernicus  (originally  called  GMES,  Global 
Monitoring for Environment and Security), is coordinated by the GMES/Copernicus unit of 
DG Enterprise and Industry. 

1.2. 

Organisation and timing 

This Impact Assessment is foreseen to accompany a legislative proposal for a Regulation of 
the  European  Parliament  and  the  Council  on  the  European  Earth  observation  programme 
(GMES/Copernicus).  It  is  based  on  a  previous  version  that  was  elaborated  in  consultation 
with an impact assessment steering group that met four times and was consulted on the draft 
impact  assessment.  The  following  DGs  were  invited  to  the  IASG:  ENV,  CLIMA,  RTD, 
AGRI,  ESTAT,  JRC,  TAXUD,  DEVCO,  ECHO,  INFSO,  ENER,  MOVE,  EEAS,  MARE, 
REGIO, JUST, HOME, OLAF, BUDG and SG. 

This  report  also  builds  on  previous  impact  assessment  studies,  in  particular  those 
accompanying the Commission proposal on the GMES/Copernicus programme and its Initial 
Operations1 (GIO) and the Commission Communication on the challenges and next steps for 
the  GMES/Copernicus  Space  component2.  As  the  existing  Regulation  concerns  the  initial 
operations  period  and  runs  until  2013,  there  is  a  need  for  a  new  Regulation  and  for  a  new 
impact assessment. 

• 

• 

This  is  the  first  impact  assessment  of  GMES/Copernicus  that  is  looking  at  the 
programme as a whole, including the three components (space, in situ and services) 
and at all the six services.  

By  now  two  services  (i.e.  Emergency  Management  Service  and  Land  Service)  are 
already operational, while the other four services are close to being operational and 
more information is available on costs and benefits of those services. 

The major study used for this impact assessment is the cost-benefit analysis commissioned by 
the EC and conducted by SpaceTec Partners in 2013 (see Annex I). This, in turn, builds on 
Booz & Company’s “Cost- Benefit Analysis for GMES” (CBA3) completed in 2011 and on 
SpaceTec  Partners'  "Assessing  the  Economic  Value  of  GMES/Copernicus:  European  Earth 
Observation and GMES/Copernicus Downstream Services Market Study" completed in 2012. 
The executive summaries of these studies are presented in the Annexes V, VI and VII. 

1.3. 

Stakeholders consultation 

This impact assessment is based on a continuous consultation of external stakeholders which 
started early in the GMES/Copernicus development process. 

Since the creation of the European Commission's "GMES Bureau" in 2006 a rolling process 
of  stakeholders'  consultation  has  been  in  place  on  GMES/Copernicus.  This  consultation 
process,  launched  with  the  Communication  entitled  “GMES:  from  concept  to  reality”4,  led 
firstly  to  the  adoption  of  the  2008  Communication  entitled  "GMES:  we  care  for  a  safer 

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4 

SEC(2009)639 of 20.5.2009 
SEC(2009)1440 of 28.10.2009 
Hereafter referred to as “Booz CBA” - available at http://copernicus.eu/pages-principales/library/study-
reports/  
COM (2005) 565 final of 10 November 2005 

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Planet"5.  Further  consultation  was  carried  out  in  order  to  prepare  the  Commission  proposal 
for  a  Regulation  on  the  European  Earth  monitoring  programme  (GMES)  and  its  initial 
operations  (2011-2013)6  and 
the  Communication  entitled  "Global  Monitoring  for 
Environment and Security (GMES): Challenges and Next Steps for the Space Component"7.  

This multiannual consultation process included: 

•  Thematic workshops with users of Earth observation-based information services; 

•  Extensive  consultation  of  independent  expert  groups  including  "implementation  groups" 
for  envisaging 
the  blueprints  of  future  services.  The  consultation  of  national 
GMES/Copernicus  coordinators,  appointed  by  their  respective  Member  States,  in  the 
framework of the GMES Advisory Council, an expert group with the mandate to provide 
strategic  advice,  foster  the  co-ordination  between  European  and  national  activities,  and 
facilitate  consensus-building  in  the  relevant  communities  around  the  development  of 
GMES/Copernicus.  This  consultation  continued  in  a  more  structured  and  formal  manner 
with the creation of the GMES Partners Board8, an expert group assisting the Commission 
with an enlarged mandate compared to the Advisory Council. National coordinators were 
tasked to consult stakeholders at national level and report back at the level of the Partners 
Board. This process, in full respect of subsidiarity, has been delivered and best practices 
have been developed and exchanged; 

•  Workshops and conferences9, by successive EU Presidencies, dedicated to GMES; 

•  An Information Day was organised in September 2009 with industry; 

•  A public consultation on the successor of the Competitiveness and Innovation Programme 
(CIP) also touched upon innovation in the space and Earth observation sector. Out of the 
676  persons  who  participated  at  the  survey,  75%  considered  support  for  satellite 
applications and other space based services relevant10. Results from the impact assessment 
study on the successor of the Competitiveness and Innovation Programme confirm space 
as  an  important  sector  for  future  priorities  in  innovation  financing.  The  study  concludes 
that  EU  intervention  to  support  the  application  and  adoption  of  European  Satellite 
Initiatives among non-space sectors should be expanded. 

•  Regional authorities' point of view, as well as that of local 'final users', has been monitored 
through FP7 projects such as Graal11 and DorisNet12, which also set up Regional Contact 
Offices both to raise awareness on GMES/Copernicus and to better understand local users' 

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COM(2008)748 final of 11.12.2008 
COM(2009) 223 final of 20.5.2009. Regulation (EU) 911/2010 of the European Parliament and of the 
Council of 22 September 2010 on the European Earth monitoring programme (GMES) and its initial 
operations (2011-2013) – OJ L276 of 20.10.2010, page 1. 
COM(2009)589 final of 28.10.2009 
COMMISSION DECISION of 5 February 2010 setting up the GMES Partners Board (2010/67/EU) – 
OJ L35 of 6.2.2010, page 23. 
See  e.g.  the  "GMES  operational  capacity  workshop"  in  Sofia  on  25-26  March  2010;  the  "GMES 
downstream  services"  conference  in  Tallin  on  6-7  May  2010;  the  "Space  and  Africa"  conference 
organised  by  the  Belgian  Presidency  on  16  September  2010;  the  “2-nd  GMES  Operational  Capacity 
Workshop”  in  Sofia  on  17-18  March  2011;  a  Space  conference  by  the  Hungarian  Presidency  in 
Budapest at 12 and 13 May 2011 and the “GMES and Climate Change” conference held in Helsinki, on 
16-17 June 2011. 
Results from the online questionnaire closed on 11 February 2011.  
http://copernicus.eu/pages-principales/gmes4regions/graal/ 
http://copernicus.eu/pages-principales/gmes4regions/doris-net/ 

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needs. In the same context the network of European regions using space technologies13 has 
organised  conferences  and  built  publications  to  spread  GMES/Copernicus  knowledge  at 
the regional level. 

•  Since the entry into force of the GMES Regulation in 201014, the consultation of Member 
States  and  users  has  continued  through  the  new  governance  bodies  set  up  by  the 
Regulation itself: the GMES Committee (which has met 10 times from 27th January 2011 
till  10th  December  2012)  and  the  User  Forum15.  The  establishment  of  a  'User  Forum' 
composed  of  user  representatives  has  the  objective  of  preparing  recommendations 
concerning  the  scope,  architecture  and  implementation  for  each  GMES/Copernicus  area. 
The  work  of  these  groups  culminated  in  public  conferences  which  are  reported  in  the 
following table:  

Table 1 User Forum Meetings and Thematic Workshops 

9th March 2011 

  GMES  USER  FORUM:  PREPARATORY  WORKSHOP  ON 

LAND MONITORING 

17th May 2011 

1st GMES User Forum 

26th September 2011 

GMES  USER  FORUM  PREPARATORY  WORKSHOP  on 
ACCESS  TO  GEOSPATIAL  REFERENCE  DATA  FOR 
GMES Land Monitoring and other services 

27th October 2011 

GMES  USER  FORUM  PREPARATORY  WORKSHOP  on 
ATMOSPHERE MONITORING 

30th November 2011 

2nd MEETING OF THE GMES USER FORUM 

12th 13th January 2012 

WORKSHOP on GMES Data and Information Policy 

25th January 2012 

7th March 2012 

GMES USER FORUM PREPARATORY WORKSHOP on the 
GMES MARINE MONITORING SERVICE 

USERS  MEETING  on  the  GMES  Initial  Operations  of  the 
Emergency Management Service - Mapping 

16th March 2012 

3rd MEETING OF THE GMES USER FORUM 

11th May 2012 

19th June 2012 

2nd July 2012 

Expert  meeting  on  the  Delegated  Act  for  GMES  Data  and 
Information Policy 

GMES  USER  FORUM  PREPARATORY  WORKSHOP  ON 
GMES SECURITY 

Expert  meeting  on  the  Delegated  Act  for  GMES  Data  and 
Information Policy 

13 
14 
15 
2011. Before stakeholders and users were consulted through working groups on the different thematic. 

NEREUS 
See note 4 
The GMES user forum gathered for the first time on 17 April 2011. The GMES Committee on 18 April 

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23rd October 2012 

4th MEETING OF THE GMES USER FORUM 

15th January 2013 

USER FORUM WORKSHOP ON GMES/COPERNICUS EMS 
Rush mode implementation 

22nd March 2013 

5th MEETING OF THE GMES USER FORUM 

Over  time,  the  consultation  has  confirmed  the  interest  and  need  for  the  GMES/Copernicus 
Programme  and  is  now  focusing  on  different  design  options,  in  particular  for  the 
GMES/Copernicus  services.  Stakeholders  have  indicated  that  the  uninterrupted  and 
guaranteed  availability  of  the  information  coming  from  GMES/Copernicus  services  is  the 
cornerstone for the success of the programme and for its benefits to be fully materialised. 

The network of European regions using space technologies  has also  expressed a  need for a 
long term perspective and a consequent and timely implementation of GMES/Copernicus16. 
The  European  Association  of  Remote  Sensing  Companies  recommended  that  financial 
support  is  assured  in  the  multi-annual  European  Budget  to  continue  the  GMES/Copernicus 
programme17. 

1.4. 

Scrutiny by the Commission Impact Assessment Board 

Two  versions  of  this  Impact  Assessment  have  been  scrutinised  by  the  Impact  Assessment 
Board  (IAB),  firstly  in  October  2011  and  secondly  in  March  2013.  Following  these 
submissions  the  IAB  has  made  a  number  of  suggestions  for  improvement.  Those  related  to 
the first submission were taken into account in the re-submitted document and those from the 
second submission have been responded to in this version. 

The  first  version  of  the  Impact  Assessment  analysed  different  options  with  respect  to  the 
overall  funding,  and  with  respect  to  governance  issues.  Since  the  European  Council  has 
decided on 8 February 2013 that GMES/Copernicus should be financed from within the EU 
MFF  budget  and  has  decided  on  a  maximum  budgetary  level,  the  re-submitted  Impact 
Assessment  no  longer  compared  different  options  with  respect  to  budget  size  and  funding 
sources  but  rather  analysed  alternative  ways  of  allocating  the  budget  within  the  same 
budgetary envelope18. 

In  its  opinion  of  March  2013  on  the  revised  Impact  Assessment,  the  IAB  made  further 
suggestions for improvement. This Impact Assessment addresses these suggestions as far as 
practically possible (and to the extent that they remain relevant). A structured summary of the 
responses to the latest IAB suggestions for improvement is provided separately. 

16 
17 
18 

NEREUS, Position Paper, April 2011.  
EARSC Position Paper on GMES, March 2011.  
An analysis of the impacts of different budget volumes can be found in the Booz CBA study referenced 
above. 

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2. 

CONTEXT 

Copernicus  is  the  European  Earth  observation  system,  previously  called  GMES.  Earth 
observation  systems  provide  information  about  planet  Earth’s  physical,  chemical  and 
biological  systems,  and  hence  enable  the  monitoring  of  the  natural  environment.  They 
produce  crucial  information  for  a  better  management  of  our  environment,  including  the 
availability of resources, enhanced security of the citizens and evidence-based policies. 

As a monitoring system, GMES/Copernicus includes both space based and non-space based 
facilities,  including  airborne,  seaborne  and  ground  based  installations  (referred  to  as  "in 
situ"). Data collected through satellites and in situ infrastructure are processed to enable the 
provision  of  information  services.  This  will  allow,  for  example,  the  more  efficient 
management of natural resources and biodiversity, the monitoring of the state of the oceans 
and the chemical composition of our atmosphere (important factors for understanding climate 
change  and  evaluation  of  the  adaptation  actions  for  policy-making),  the  response  to  natural 
and man-made disasters and ensuring border surveillance in a more effective way. 
Since  GMES/Copernicus  was  launched  in  199819,  continuous  and  substantial  efforts  have 
been  made  by  the  EU  (through  Framework  Programmes  for  Research  and  Development, 
Preparatory Actions and GMES Initial Operations), the European Space Agency ESA and its 
Member  States,  together  with  contributions  from  EU  Member  States  and  European 
organisations,  for  the  development  of  services,  the  provision  of  access  to  space  and  in  situ 
data, and for the development of a dedicated observation infrastructure. 

During  the  period  2000-2006,  the  concept  of  GMES/Copernicus  started  to  be  designed  and 
tested.  On  the  EU  side,  preliminary  projects  were  supported  by  the  5th  and  6th  Framework 
Programmes  for  Research,  Technological  Development  and  Demonstration.  The  first 
concrete steps started with the development of the pre-operational GMES fast track services 
using available funds from the FP6 Space Theme. In parallel, ESA launched its first activities 
in  support  of  GMES  at  the  Ministerial  Council  in  November  2001  with  the  Earth  Watch 
programme  and  its  GMES  Service  Elements  activities.  At  the  political  level,  an  important 
step  was  achieved  with  the  first  Space  Council  meeting  in  2004,  a  joint  and  concomitant 
meeting of the ESA Council at ministerial level and the EU Competitiveness Council.  

The period from 2007 to 2013 saw major achievements on GMES architecture, governance 
and  funding.  GMES  became  a  reality  with  the  adoption  of  a  Regulation  on  the  Initial 
Operations.  Moreover,  more  funding  was  made  available  from  the  EU  (FP7  Space 
Programme,  Preparatory  Actions,  and  operational  funding  allocated  to  the  Regulation)  and 
ESA Member  States, for the development of pre-operational services  and for the continued 
development  of  a  dedicated  space  infrastructure  (the  Sentinels).  The  launch  of  the  first 
GMES/Copernicus  Sentinel  is  scheduled  for  October  2013  while,  until  the  Sentinels  are 
operational,  satellite  data  come  only  from  contributing  missions.  Some  of  the  services  are 
already  generating  and  disseminating  products  to  users.  For  example,  the  Emergency 
Management Service has been operational since 1st April 2012 and has been activated in the 
so-called  "rush-mode"  on  21  occasions,  of  which  60%  concern  an  EU  continental  territory. 
For instance, after the serious earthquake that hit the Italian region of Emilia Romagna, new 
reference  maps  were  made  available,  facilitating  the  work  of  the  emergency  teams.  Other 
interventions  took  place  in  Bulgaria,  France,  Germany,  Hungary,  Italy,  Portugal,  Romania, 

19 

Declaration during the Baveno Manifesto 

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Spain and Sweden dealing with floods, forest fires and earthquakes using GMES/Copernicus 
satellite images. 

An  Urban  Atlas  (Land  Service  product)  provides  digital  mapping  for  urban  planning. 
the  supervision  of 
Different  projects  and  activities  have  been  undertaken  under 
GMES/Copernicus  Unit  to  disseminate  knowledge  and  demonstrate  the  potential  of  the 
programme; six projects have been selected to build demonstrators using GMES/Copernicus 
and  Galileo  services  combined,  exploiting  the  synergies  between  the  two  European 
programmes which is an area of potential enhanced benefit20.  

The  GMES/Copernicus  activities  paid  under  the  Preparatory  Action  (PA)  and  the  GMES 
Initial Operations (GIO) have been evaluated by an independent body21. 

As far as the Preparatory Action is concerned, the evaluator stressed the important role they 
played  in  stimulating  the  formation  of  user  communities  especially  in  the  emergency 
management  field.  The  GMES/Copernicus  PA  provided  the  main  lesson  that  obtaining 
regular  user  input  is  critical  in  adapting  services  to  meet  evolving  user  needs.  The  PA  has 
helped to encourage greater networking and coordination among user communities in specific 
fields  (e.g.  ice  monitoring,  emergency  management)  and  has  promoted  the  exchange  of 
information between relevant actors.  

As  far  as  the  GIO  is  concerned,  it  has  been  considered  that  operations  have  been  managed 
and  implemented  efficiently  and  effectively,  under  the  overall  coordination  of  the 
GMES/Copernicus  Unit.  JRC,  EEA  and  ESA  have  provided  the  appropriate  technical 
expertise  to  manage  and  implement  the  three  components,  space,  in  situ  and  services.  The 
GIO has achieved the objective of developing two fully operational services within the 3 year 
programming period, an important outcome at ‘results’ level. 

Some  lessons  learnt  from  the  GIO  provide  important  pointers  to  GMES  future  success:  the 
availability of quality and timely reference data, sufficiently well-resourced services and the 
need  to  close  the  data  gaps  of  in  situ  data.  Challenges  remain  in  terms  of  the  lack  of 
harmonization  between  national  reference  datasets  based  on  a  common  methodology  and 
gaps in country coverage. 

The evaluator stressed the necessity of raising awareness about GMES/Copernicus and about 
innovative  downstream  applications  that  build  on  its  services.  Although  good  progress  has 
been  made  in  strengthening  awareness  about  GMES/Copernicus  services  and  the  potential 
downstream benefits, further work is needed to encourage user uptake among specific types 
of  users  that  are  less  familiar,  such  as  local  and  regional  authorities  and  some  of  the  New 
Member  States.  This  process  is  ongoing,  for  example  through  the  funding  of  EMMIA 
projects  and  through  the  different  communication  activities,  such  as  the  European  Space 
Expo.  Moreover,  as  suggested  in  the  evaluation,  studies  have  been  recommended  to  better 
understand the size and the type of potential downstream markets for GMES/Copernicus, the 
results of which are already integrated in this Impact Assessment. 

In its Communication on the Budget Review, the Commission has acknowledged the major 
strategic  importance  of  large  scale  projects,  such  as  GMES22.  In  the  context  of  the  Europe 
2020  strategy,  the  Commission  has  also  underlined  that  the  GMES/Copernicus  Programme 
contributes  to  reaching  the  Europe  2020  goals:  the  Flagship  initiative  n°5  « An  industrial 

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22 

http://www.mobilise-europe.mobi/ 
CSES, Centre for Strategy & Evaluation Services, UK. See Annexes III and IV 
COM (2010) 700 point 4.3 

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policy for the globalisation era » explicitly mentions GMES: « to develop an effective space 
policy and (…) in particular to deliver (...) GMES »23.  

The  Communication  towards  a  space  strategy  for  the  European  Union  that  benefits  its 
citizens24, clearly mentions the importance of GMES/Copernicus for space policy and states: 
"The current priority is to ensure that it is implemented quickly and effectively, in partnership 
with the Member States, and that it is fully operational by 2014". 

The Competitiveness Council has reaffirmed the need for the Commission to ensure a quick 
and  effective  implementation  of  the  GMES/Copernicus  programme  by  2014,  in  partnership 
with  the  Member  States  and  has  recognized  the  necessity  and  importance  of  guaranteeing 
continuous and long term sustainable access to Earth observation data and Earth monitoring 
services  provided  by  GMES/Copernicus  in  order  to  encourage  the  development  of  a 
European industry of well-diversified downstream services25. At its meeting of 31 May 2011, 
the  Competitiveness  Council  invited  the  Commission  to  present  by  the  end  of  2011  a 
proposal  for  the  operations  and  to  clarify  the  governance  of  GMES/Copernicus  from  2014 
onwards.  The  conclusions26  of  the  31  May  2011  Council  meeting  recognised  the  necessity 
and  importance  of  guaranteeing  continuous  and  long  term  sustainable  access  to  earth 
observation data and derived Earth monitoring services provided by GMES/Copernicus. 
The European Economic and Social Committee (EESC)27 supported the Regulation on Earth 
Observation and its initial implementation (GIO), considering it to be a strategic step in the 
establishment of a new framework to bring European space policy to maturity.  

The European Parliament showed strong support for GMES/Copernicus by voting in favour 
of the Commission’s GIO proposal in its first reading28. 

A  Regulation  governing  the  initial  operations  of  the  GMES/Copernicus  programme  2011-
2013  was  adopted  in  2010  by  the  European  Parliament  and  the  Council29.  The 
GMES/Copernicus  programme  now  has  a  legal  basis  that  prepares  its  transition  from  mere 
research activity to operational activities.  
The  European  Council  decision  of  the  8th  of  February  2013  has  given  to 
GMES/Copernicus  a  maximum  level  of  commitments  of  €  3.786  Mio30.  This  Impact 
Assessment  estimates  the  Cost-Benefit  ratios  for  different  scenarios  related  to  different 
apportionment  of the proposed  budget,  based  on the analysis of the costs and of the social, 
environmental and economic benefits. 

Communication (2020) 2010 
COM(201) of 4.4.2011 
Competitiveness Council, 31 may 2011. 
Council of the European Union, Brussels, 31 May 2011, 1090/11. 
Opinion of the European Economic and Social Committee of 20 January 2010 
European Parliament legislative resolution of 16 June 2010 on the proposal for a 

23 
24 
25 
26 
27 
28 
regulation of the European Parliament and of the Council on the European Earth 
observation programme (GMES) and its initial operations (2011–2013) (COM(2009)0223 – 
C7-0037/2009 – 2009/0070(COD)) 
29 
30 

See note 7. 
Throughout this document the convention for representing ‘thousands’ is by using the separator “.” and 
for 

decimal numbers the separator “,”. Although this is not in accordance with common English usage it is 
employed here to reflect common Commission practice. 

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3. 

PROBLEM DEFINITION 

3.1. 

The problem that requires action 

Insufficient existing earth observation services  

In the last thirty years, substantial R&D efforts in the field of Earth Observation have been 
made  by  the  EU,  the  European  Space  Agency  (ESA)  and  their  respective  Member  States, 
with  a  view  to  developing  infrastructure  and  pre-operational  Earth  Observation  services. 
However, many of the existing Earth Observation services in Europe are insufficient due to 
infrastructure gaps and lack of guarantees on their availability in the long term. Data provided 
through  the  currently  existing  services,  either  do  not  cover  all  the  parameters  needed  by 
policy makers31, or are not provided on a continuous basis, in particular because the lifetime 
of the service or the underlying observation infrastructure is limited due to budgetary and/or 
technical constraints. GMES/Copernicus is conceived to address this potential weakness for 
the long term. 

Continuity  of  GMES/Copernicus  is  of  paramount  importance.  Any  interruption  of 
GMES/Copernicus  services  would  hamper  the  harmonization  and  standardization  efforts  of 
the geospatial information products at European level and would thus lead to a decrease of 
efficiency  for  inter-country  comparison  of  environment  information.  Moreover,  since  many 
areas of environmental issues – such as climate change mitigation and adaptation policies – 
require thinking globally and acting locally, discontinuing GMES/Copernicus would reduce 
dramatically the European added value and capacity to address environmental policies caused 
by a lack of coordination between national/regional and European / global programmes.  

Economic investments at risk 

The  GMES/Copernicus  programme  based  on  the  GMES  Initial  Operation  regulation  has 
financed,  during  the  period  2011  –  2013,  a  range  of  operational  activities.  A  first  step  has 
been made towards the definition of a comprehensive Earth Observation system. However, it 
is still limited in time (i.e. 2011-2013). 

To  date,  the  total  investment  made  by  the  EU,  ESA  and  its  Member  States  accounts  for 
more  than  €  3.000  Mio.  If  GMES/Copernicus  were  to  be  discontinued,  almost  all  past 
investments would be lost, with an additional risk to disrupt national capacities to maintain 
their investment in space earth observation activities as the EU dimension would no longer 
provide  a  political  and  programmatic  framework.  It  is  thus  very  likely  that  the  situation 
would  go  back  to  fragmented  and  uncoordinated  space  activities  with  remaining  gaps, 
unsolved redundancies, and lack of economies of scale, as they existed before the creation of 
GMES/Copernicus. 

This risk of discontinuity represents a major concern for end-users like public authorities, but 
also  for  downstream  service  providers,  as  they  are  unlikely  to  invest  significantly  in  non-
mature, risky markets and will face additional difficulties in raising capital. 

Innovation potential at risk 

The  risk  of  discontinuity  would  also  imply  that  R&D  investments  are  not  translated  into 
innovation.  Therefore 
to 
to  unleash 
GMES/Copernicus, which is mainly a service related innovation, will not be exploited. This 

innovation  capacity 

the  potential 

linked 

the 

31 

In particular, information aggregated at European or global level with a sufficient quality is currently 
not available to European policy makers.  

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would be regrettable especially taking into account that the EU innovation policy should be 
more targeted to the services sector, as different studies show32. 

Autonomous  access  to  reliable,  traceable  and  sustainable  information  on  environment  and 
security is strategic 

GMES/Copernicus is expected to provide key tools and products for enabling the definition, 
implementation and monitoring of EU policies on environment and security. The six thematic 
services as defined in the GMES/Copernicus Regulation are currently developing more than 
400  products  to  be  issued  either  on  a  routine  basis,  either  every  day  (e.g.  air  quality 
information), or on demand (e.g. damage assessment maps following a major disaster).  

Hence  through  GMES/Copernicus,  the  EU  has  significant  influence  in  international 
programmes  and  negotiations  such  as  the  three  Rio  Conventions  (Climate  Change, 
Desertification  and  Biodiversity),  post-Kyoto  Treaty,  GEO,  CEOS,  GCOS,  and  in  bilateral 
discussions on space activities. 

Finally, GMES/Copernicus gives the EU an autonomous capacity on access to information. 
Without it, the EU would have to rely on non-European (e.g. US) satellites or international 
sources  of  information  (e.g.  International  Charter,  international  conventions),  or  even  on 
uncoordinated sources from its Member States for the implementation of its policies.  

Employment at risk 

industry.  Besides 

the  European  space 

Satellite applications systems are the main source of income for the European space industry 
(€ 3.100 Mio), and are the main domain of exports (with € 1.130 Mio).33 One of the two most 
significant  segments  in  terms  of  income  is  Earth  Observation  (e.g.  GMES/Copernicus 
Sentinels). Currently, Earth Observation systems account for around 30% of the total income 
for 
industry  sales, 
GMES/Copernicus has a significant impact on the competitiveness and the profitability of the 
European  space  manufacturing  industry.  Export  and  trade  vastly  depend  on  the  relative 
competitive position of the sector.  
Recent  studies34  have  explored  the  impact  of  GMES/Copernicus  data  availability  on 
downstream  markets  development  and  have  added  the  figures  of  downstream  sector 
employment to the figures of jobs development in the space related sectors. Considering the 
GMES/Copernicus contribution along the Space value chain, GMES/Copernicus can be seen 
as a driving force for creating highly skilled job opportunities and can have indirect effects on 
the wider economy by 2030. 

this  direct 

impact  on 

Downstream:  Maintaining  and  creating  more  than  9.000  direct  jobs  cumulatively,  provided 
that full data continuity is assured for GMES/Copernicus in the long term, and the EO market 
potential is realised, with enabling factors in place.  
Upstream  and  Midstream:  Maintaining  and  creating  2.740  direct 
GMES/Copernicus funding scenario of full data continuity.  
An  aggregate  of  11.900  direct  jobs  will  be  created  and  maintained  across  the  entire 
GMES/Copernicus and EO value chain. 
A high-level analysis of potential economic multiplier effects (based on Oxford Economics’ 
Space industry multipliers, provided by the European Commission) suggests that more than 

jobs  under 

the 

See for instance Next generation innovation policy, the future of EU innovation policy to support  

32 
market growth, CEPS and Ernst & Young, 2011. 
33 
34 

The European Space Industry in 2010, ASD-Eurospace, 15th edition, June 2011. 
SpaceTec Partners 2012. 

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36.000 indirect jobs could be maintained and created, yielding an overall employment impact 
of approximately 48.000 jobs in Europe by 2030. 

3.2. 

Upgrading the system to routine operational status 

The  GIO  (GMES  Initial  Operation)  Regulation  will  be  valid  until  the  end  of  2013.  In  the 
meantime  a  new  budget  has  been  proposed  by  the  European  Council  for  GMES,  which  is 
entering  its  operational  phase  from  the  start  of  2014  under  the  new  name  of  Copernicus. 
These  changes  require  a  new  Regulation  which  will  propose  decisions  on,  among  other 
topics, the issues of programme governance, of ownership of the infrastructure and of budget 
apportionment between the different components. In addition, a Delegated Act on Copernicus 
Data and Information Policy, to be applicable to the operational phase, has been prepared and 
enshrines the principle of full, open and free-of-charge data access for all users. It is crucial 
that  this  ‘upgrade’  of  the  programme  results  in  a  smooth  transition  to  the  new  operational 
phase, especially from the perspective of existing and potential users, with the highest level 
of continuity and the efficient apportionment of the budget, as well as efficient governance 
choices. 

3.3. 

Underlying drivers of the problem  

As  shown  above,  stakeholders  widely  agree  that  a  public  intervention  in  basic  operational 
services  is  a  prerequisite  for  wide-ranging  operational  services  to  emerge.  Without  such 
intervention  operational  services  useful  for  policy  makers  and  others  will  not  become 
available.  

The  market  fails  in  providing  the  operational  services  without  public  intervention.  This  is 
mainly due to intrinsic high fixed costs, while at the same time returns generated by selling 
data to public authorities or commercial players are risky and hard to estimate. This makes 
the investment not sustainable for the private sector given the very long time span required to 
reach the break-even point of the investment35.  

Although the overall benefits from the programme are estimated to largely exceed the costs, 
they  are  partly  of  a  public  nature  linked  for  instance  to  monitoring  climate  change  or  to 
deforestation36. Moreover the benefits coming from downstream market development require 
the  continuous  availability  of  GMES/Copernicus  data  to  incentivize  private  investments  in 
the  sector.  For  these  reasons,  the  continuation  of  the  Programme  has  to  be  assured  and  the 
most  appropriate  budget  allocation  and  apportionment  approach  has  to  be  adopted.  This 
impact assessment will therefore look into different options regarding alternative allocations 
of the budget foreseen by the European Council for GMES/Copernicus. 

3.4. 

Establishment of an appropriate governance structure 

The  shifting  from  a  research  phase  to  an  operational  phase  requires  re-thinking  of  the 
governance  structure.  The  reasons  are  manifold:  research  projects  are  smaller  in  terms  of 
budget  and  objectives,  limited  in  duration  and  conceived  as  prototypes  of  what  the  whole 
Copernicus structure could look like. It is exactly building on those experiences, and taking 
into account internal financial and human resource constraints, that the GMES Unit has been 
analysing  different  options  and  proposing  the  most  efficient  governance  framework  for 
Copernicus. Final decisions on governance in the proposed Copernicus Regulation have taken 
account  of  discussions  with  other  interested  Commission  Services  and  in  stakeholder 

35 

36 

See also the Impact Assessment accompanying the Commission Communication on the European 
Space policy, SEC(2007)505 of 26.4.2007, p. 10.  
See for instance: Socio-economic benefits, PWC, 2006 or the results of the Booz Cost/benefit analysis 
in chapter 6 of this impact assessment. .  

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meetings  such  as  the  User  Forum  and  GMES  Committee.  Past  evaluations  and  personal 
experiences  have  been  taken  into  account  in  choosing  the  “delegation  solution”.  The  main 
reasons that lead to this decision are the increasing number of management tasks and the need 
for specialised personnel to address the specific services development: it is exactly to avoid 
duplication  that  the  Regulation  proposes  the  delegation  of  tasks  to  external  actors  who 
already  have  the  required  skills  and  organisation.  In  addition,  certain  management 
responsibilities  could  exploit  existing  Commission  resources  or  could  be  covered  by 
seconded  experts.  Thus,  through  a  combination  of  outsourcing  and  exploiting  internal 
resources,  the  effective  capacity  of  the  GMES  Unit  for  managing  the  programme  will  be 
appropriately increased. 

3.5.  Who are the most affected groups? 

GMES/Copernicus  is  a  user-driven  programme,  thus  requiring  the  continuous,  effective 
involvement  of  users,  particularly  regarding  the  definition  and  validation  of  service 
requirements,  aiming  at  providing  information  services  in  the  field  of  environment  and 
security. Up to now, during the build-up phase, the user consultation process has been based 
on  interaction  with  Member  States  (GMES  Advisory  Committee,  Partners  Board,  GMES 
Committee), on recommendations from the User Forum, and took stock from outcomes of the 
demonstration  activities  financed  through  the  FP7  programme,  conclusions  of  specific 
studies, results of dedicated workshops and dialogues with stakeholders, and reports from the 
Implementation Groups. 

GMES/Copernicus services are based on more than 30 applications with over 400 products. 
The  user  community  is  large  and  diverse,  spanning  from  international  stakeholders  to 
European citizens. The most affected groups include: 

–  At  European  level,  Commission  services  (13  DGs)  are  already  using  or  are  planning  to 
use  GMES/Copernicus  products,  e.g.  ECHO  for  emergency  management  services,  ENV 
for  land,  marine  and  atmosphere  monitoring  services,  AGRI  for  agri-environmental 
monitoring,  MOVE  for  oil  spill  and  ice  monitoring,  MARE  for  ocean  monitoring  and 
forecasting,  REGIO  for  land  use  and  CLIMA  for  forest  monitoring  and  climate  change 
mitigation and adaptation.  

–  EU agencies are also important users and actors (EEA, EMSA, FRONTEX, EUSC…), as 
well  as  the  European  External  Action  Service  (EEAS),  intergovernmental  European 
agencies  (ECMWF,  EUMETSAT,  EDA,  ESA),  and  European  programmes,  associations 
and  networks  (EMEP37,  EUMETNET,  Eurogeographic,  Eurogeosurvey,  OSPAR, 
HELCOM…). 

–  At international level, GMES/Copernicus is developing relationships with GEO partners, 
UN  agencies  (FAO,  WFP,  UNEP,  UNOSAT…),  NGOs,  and  international  research 
programmes  (ESSP38  with  DIVERSITAS,  IGBP,  WCRP,  IHDP)  since  the  scientific 
community is an important user of GMES/Copernicus data and services; 

–  National  Authorities  (Ministries  of  Environment,  Transport,  Interior,  Agriculture, 
Energy, Fisheries, Land Management, Maritime Affairs …) and Public Local Authorities 

37 

38 

the  European  Monitoring  and  Evaluation  Programme  is  a  scientifically  based  and  policy  driven 
programme  under  the  Convention  on  Long-range  Transboundary  Air  Pollution  for  international  co-
operation to solve transboundary air pollution problems 
Earth System Science Partnership 

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(e.g.  in  urban  planning  issues),  but  also  specific  entities  such  as  Civil  Protection 
Authorities and Risk Control Agencies. 

–  A wide range of users in the industry framework (space manufacturing sector and related 
operations,  service  provision,  data  production  and  dissemination  sector,  development  of 
value added services in the downstream sector), and ultimately European citizens who will 
use the final products. 

As far as the downstream sectors are considered, a specific analysis has already identified the 
more  promising  ones  and  estimated  the  potential  turnover.  An  estimate  of  the  European 
GMES/Copernicus’ downstream market potential has been performed and is included in the 
Cost-Benefit Analysis below. 

3.6. 

Foreseen evolution of the problem 

The challenge is to ensure the continuity and evolution after 2013 of appropriately designed 
services to meet the users' needs. This continuity of services presupposes the continuity and 
evolution  of  GMES/Copernicus  infrastructure  providing  the  necessary  data.  Without  good 
policy management, the "raison d'être" of the Programme is put into question, as users will 
only  rely  on  GMES/Copernicus  if  a  sustained  flow  of  data  is  ensured.  Without  appropriate 
funding given to services, the continuity will be exposed at risk. 

In this context, and given the € 3.786 Mio that are allocated to GMES/Copernicus inside the 
Multiannual  Financial  Framework  for  2014-2020,  the  baseline  scenario  for  this  impact 
assessment  is  that  the  above  budget  would  be  spent  on  GMES/Copernicus,  and  include 
financing the following actions:  

–  The  uninterrupted  provision  and  adaptation  of  GMES/Copernicus  services 
according  to  evolving  user  needs.  The  earth  Observation  (EO)  downstream 
evolution will largely depend on the continuous input of information produced in 
the framework of GMES/Copernicus services.  

–  The  exploitation  of  GMES/Copernicus  infrastructure  currently  developed 

specifically for GMES/Copernicus (the prototypes of the Sentinel missions), 

–  The  recurrent  units  (i.e.  identical  copies  of  existing  prototypes  needed  e.g.  to 
increase the frequency of observations and extend the time span of data provision 
with a relatively low investment compared to the prototypes); 

–  The 

of 

space 

renewal 

for 
infrastructure 
GMES/Copernicus  (taking  into  consideration  the  long  design  and  construction 
lead  times  for  satellites  (8–10  years),  including  decisions  on  the  second 
generation of Sentinels); 

specifically 

developed 

–  The user friendly access to space data from contributing missions (i.e. existing 
or  new  space  infrastructure  at  national  or  international  level  which  is  not 
developed specifically for GMES/Copernicus) and co-ordination activities in the 
European Earth observation sector; 

–  A contribution for the coordination of the in situ component. 

–  It  should  be  recalled  that  the  long-term  GMES/Copernicus  funding  approach 
should  be  developed  in  a  modular  way.  This  means  that  new  expansions  in  the 

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services  and  every  new  evolution  of 
scope  of  GMES/Copernicus 
GMES/Copernicus  will  be  assessed  against  the  criteria  of  cost  efficiency,  user 
needs and EU policy interests. 

–  However, while the overall budget has been decided, the allocation of the budget 
among the three main components of GMES/Copernicus (space infrastructure, in 
situ infrastructure and services) is not predetermined by the decision. This impact 
assessment  will  therefore  compare  three  alternative  options,  without  regarding 
any one of them as the baseline. The impacts in terms of costs and benefits will 
be analysed in absolute and relative terms for all three scenarios. 

3.7. 

The risk of non-sustainability 

The primary area of risk for both the downstream exploitation of the Copernicus Services and 
also the upstream sector is the inherent uncertainty in the funding model, based, as it is, on 
the European Union’s MFF funding strategy. This currently guarantees sustainability of the 
Copernicus  programme  only  for  7  years.  Hence,  as  time  passes  and  the  guarantee  period 
diminishes so the various actors whose businesses depend on the programme might become 
less  confident  about  the  future.  Unless  this  loss  of  confidence  over  time  can  be  mitigated, 
several  negative  impacts  may  emerge,  including  the  likelihood  that  the  profile  of  benefits 
revealed by the Cost Benefit Analyses may turn out to be over-optimistic. In order to mitigate 
these risks the Commission should take steps at an appropriately early stage (perhaps starting 
at the mid-term review) to instil confidence by firmly and publicly stating its commitment to 
securing  funding  for  Copernicus  beyond  2020.  In  addition  the  Commission  should  develop 
and publish a long-term strategy for Copernicus, including its funding, so that the confidence 
of those with vested interests in the programme can be maximised. 

3.8. 

Does the EU have the right to act? 

The legal basis for a European Earth observation programme (GMES/Copernicus) is Article 
189 of the TFEU, which allows the EU to act. Article 2 of the Regulation 911/2010 on the 
European  Earth  Monitoring  programme  (GMES)  and  its  initial  operations  establishing  the 
GMES/Copernicus Programme already lists activities included in the programme. Moreover, 
the delivery of GMES/Copernicus is a strategic objective of Europe 2020.  

Responsibility for funding the exploitation and the renewal of space infrastructure developed 
with  EU  and  intergovernmental  funds  cannot  be  optimally  achieved  by  individual  Member 
States  because of  the costs  incurred. In  the field of space-based observation  for operational 
meteorology,  European  States  have  pooled  their  resources  to  develop  and  exploit 
meteorological satellites in the framework of the European Organisation for the Exploitation 
of Meteorological Satellites (EUMETSAT). European States also developed demonstrators of 
environmental satellites either through ESA or through national space agencies. They could 
not,  however,  find  a  way  to  co-operate  with  regard  to  the  funding  of  sustained  operational 
programmes  in  the  field  of  environmental  monitoring  similar  to  that  for  meteorology.  The 
need  for  continuing  such  observations  is  becoming  critical,  considering  the  increasing 
political pressure on public authorities to take informed decisions in the field of environment, 
security and climate change and the need to respect international agreements. 

For  the  services  with  a  pan-European  (or  even  global)  coverage,  Member  States  cannot 
sufficiently  achieve  the  objectives  of  the  proposed  action,  as  the  inputs  from  different 
Member States have to be aggregated at European level. The provision of other services (e.g. 
emergency  maps  or  thematic  land  monitoring  maps  of  a  more  limited  geographical  scope) 
can  be  better  achieved  by  the  EU  for  two  reasons.  First,  a  more  coherent  and  centralised 
management  of  input  data,  from  space  based  or in  situ  sensors  will  allow  for  economies  of 

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scale.  Secondly,  an  uncoordinated  provision  of  Earth  observation  services  at  Member  State 
level would lead to duplications and would render the monitoring of the implementation of 
EU  environmental  legislation  on  the  basis  of  transparent  and  objective  criteria  difficult  or 
even impossible. If information produced at Member State level is not comparable, it will not 
be  possible  for  the  Commission  to  ascertain  whether  environmental  legislation  has  been 
implemented correctly in all Member States. Moreover, action at European level will create 
economies of scale leading to a better value for public money.  

The action proposed for the operational phase of GMES/Copernicus does not replace existing 
services at national or regional level, but rather complements and optimises them, coordinates 
them or ensures their continuity. EU institutions and policy makers will be among the main 
users  and  beneficiaries  of  the  GMES/Copernicus  information  and  services;  moreover  the 
provision of GMES/Copernicus data at a European level is necessary to build trust in the final 
users and to foster investment in downstream applications. 

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4. 

OBJECTIVES 

4.1. 

General objectives  

The  over-arching  objectives  of  defining,  financing,  establishing  and  operating  a 
GMES/Copernicus,  long-term  operational  programme  of  activities  as  described  in  the 
proposed  Regulation  on  establishing 
the  European  Earth  Observation  Programme 
(Copernicus) are to actively address the problems described in Section 3 above. 

By  forming  a  key  element  of 
the  EU’s  Space  Policy,  an  overall  objective  of 
GMES/Copernicus  can  be  defined  as  contributing  to  reaching  the  following  Europe  2020 
goals by creating: 

« a more resource efficient, greener economy » 
« a more competitive economy » 
« an economy based on knowledge » 
« an economy based on innovation » 
« a high-employment economy » 
« economic, social and territorial cohesion ».  

•  The GMES/Copernicus services aim to enable public policy makers in particular to: 

–  prepare national, European, and international legislation, for instance in the field 

of environmental matters, including climate change; 

–  monitor the implementation of this legislation; 

–  access  comprehensive  and  accurate  information  concerning  safety  and  security 

matters (e.g. for border surveillance, civil protection activities, …)39. 

–  Additional objectives concern the need of assuring continuous data provision to 

foster downstream markets development.  

These  objectives  will  be  pursued  in  the  context  of  international  cooperation,  while  at  the 
same time guaranteeing a minimum level of autonomy of the EU when it comes to accessing 
crucial information to inform its policy decisions. 

4.2. 

Specific Europe 2020 policy objectives  

Delivering  GMES/Copernicus  and  Galileo  Programme  is  one  of  the  objectives  stated  in 
Europe 2020 strategy. GMES/Copernicus aims to contribute to the Europe 2020 objectives in 
the following ways: 

« a  more  resource  efficient,  greener  economy »,  i.e.  in  particular  the  preservation  and 
management  of  environmental  resources  and  ecosystems  and  biodiversity  (knowledge  of 
biomass  and  land  use,  monitoring  of  oil  spills…);  achieving  efficiency  gains  as  a  result  of 
better enforcement of EU policies (environment, agriculture, maritime policies…). 

« a  more  competitive  economy »,  as  a  flagship  on  industrial  and  space  policies, 
GMES/Copernicus  aims  to  foster  the  competitiveness  of  EU  industry  and  its  technological 
edge  in  space  (manufacturing)  and  beyond  (services  +  applications);  it  specifically  aims  to 
create  business  potential  for  SMEs  by  boosting  innovation  (SMEs  represented  half  of  the 
downstream sector in 2009).  

39 

The security aspect is not included in the Cost-Benefit Analysis. 

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« an  economy  based  on  knowledge »,  GMES/Copernicus  aims  to  contribute  to  a  better 
understanding  of  global  challenges 
tropical  deforestation, 
desertification,  land  degradation  and  emergency  preparedness);  it  supports  the  development 
of research/science by the provision of critical data. 

(e.g.  climate  change, 

« an  economy  based  on  innovation »,  GMES/Copernicus  allows  the  emergence  of  highly 
innovative  downstream  services  (e.g.  for  the  management  of  the  environment,  security, 
meteorology,  civil  protection  and  risk  management);  it  aims  to  create  partnerships  between 
research  and  business  communities  and  can  set  benchmarks  for  transfer  of  research  and 
development into business; 

« a high-employment economy », GMES/Copernicus creates additional potential for new jobs 
(e.g.  in  the  satellite  manufacturing  industry  and  in  the  downstream  sector40)  by  boosting 
additional demand for highly-skilled workers and fostering new markets development. 

« economic,  social  and  territorial  cohesion »,  i.e.  need  for  new  ground  infrastructure  in 
particular in the EU-12; creating new business potential for SMEs in all EU Member States 
(also for services and applications in countries with weaker industrial base, thanks to the full 
and  open  data  access  principle  of  GMES/Copernicus).  GMES/Copernicus  will  give  an 
impetus  to  those  countries  lacking  behind  in  land  or  emergency  services  and  will  therefore 
contribute  to  the  objective  of  an  increased  cohesion  among  the  Member  States. 
GMES/Copernicus  services  are  by  definition  pan-European  and  respond  to  European 
requirements. 

4.3. 

Operational policy objectives 

The decision of the European Council integrates GMES/Copernicus inside the MFF, setting 
the ceiling for the maximum level of commitments to € 3.786 Mio from 2014 to 2020. The 
operational objective now is to allocate that amount in the most cost-effective way when 
developing  the  different  components  of  GMES/Copernicus.  On  governance,  and  based  on 
principles  of  good  governance,  the  operational  objective  is  to  separate  supervision, 
management and technical implementation. 

4.4. 

Consistency with and relevance to other EU policies 

In  the  operational  phase  GMES/Copernicus  will  be  able  to  deliver  information  services  to 
policy  makers,  public  authorities,  businesses  and  European  citizens.  This  means  that 
GMES/Copernicus, as an EU autonomous source of information, aims to support all relevant 
Union policies, instruments and actions, where understanding the way environmental changes 
affect our planet is paramount. 

Examples of GMES/Copernicus contribution to other EU policies include following: 

• 

• 

40 

International cooperation policies: extending GMES/Copernicus services to Africa 
represents  a  concrete  contribution  to  EU  development  policies.  Satellite  Earth 
Observation,  for  instance,  enables  the  monitoring  of  crop  conditions  during  the 
agriculture season and the development of Food Security Early Warning System for 
at-risk regions worldwide. In addition some applications of GMES/Copernicus could 
provide policy makers with information on natural resources in Africa. 

Transport  policy:  by  optimising  ship  routing  GMES/Copernicus  Marine  service 
could minimise fuel consumption and emissions.  

For an analysis of the Downstream service in Europe, see Annex VI.  

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• 

• 

• 

• 

• 

• 

• 

• 

Environmental  policies:  the  GMES/Copernicus  services  provide  systematic  or 
periodic  information  at  various  scales  which  are  necessary  for  monitoring  on  a 
continuous basis the state of the Marine, Atmosphere and Land environment. In this 
context  environmental  images  collected  through  GMES/Copernicus  could  provide 
the  basis  to  monitor  the  targets  of  the  new  European  biodiversity  strategy,  as 
announced in May 2011, or as a tool to monitor the efficient use of resources such a 
wood,  water,  minerals,  land,  air  (quality)  and  many  others  at  European  and  global 
scale 

Humanitarian  aid:  GMES/Copernicus  services  also  play  an  important  role  in 
emergency  response  activities  inside  and  outside  the  EU,  providing  up-to-date 
information which is crucial for decision makers, operation planners and field teams. 

Energy:  GMES/Copernicus  can  provide  Europe  with  a  reliable  source  of 
information,  monitoring  nuclear  proliferation  or  decommissioning  of  nuclear  sites 
and protecting vital infrastructure such as pipelines. 

Regional  policy:  at  Pan-EU  level  GMES/Copernicus  Land  Service  provides 
harmonised land cover and land cover change products. This information is essential 
for land use and urban policies purposes. 

Climate  change  policy:  There  are  several  GMES/Copernicus  services  that  touch 
upon climate-related issues such as forest monitoring and land carbon information, 
monitoring sea and ice level, analysis of greenhouse gases and fluxes. 

Internal  affairs  and  security:  GMES/Copernicus  can  contribute  to  border 
surveillance  and  maritime  surveillance.  In  this  framework  since  2008,  DG  ENTR 
and DG HOME have established a close cooperation.  

Agriculture: Agri-environment monitoring could contribute to the improvement of 
the timely and accurate monitoring of agricultural land use state and its changes at 
European,  national  and  regional  levels  by  providing  common  methodologies  and 
indicators  covering  various  temporal,  spatial  and  thematic  scales.  The  common 
agriculture  policy  could  use  GMES/Copernicus  in  order  to  monitor  the  ‘set-aside’ 
policy.  

Marine  related  policies:  GMES/Copernicus  allows  understanding  the  ocean,  its 
dynamic  processes  and  its  impact  on  climate  change.  Applications  in  this  domain 
include:  Maritime  Security,  Oil  Spill,  Marine  Resources  management,  Climate 
Change, Seasonal Forecasts, Coastal Activities, Ice Surveys and Water Quality. 

4.5. 

Synergies with other DG Enterprise programmes  

There are clear synergies between Copernicus and other DG Enterprise programmes, which 
have been exploited in the past and may be exploited in the future. The main Programmes to 
be  mentioned  are  the  space  elements  of  Horizon202041  and  COSME  (Competitiveness  of 
enterprises and SMEs). The fact that Copernicus is now entering its operational phase does 
not mean that it will not need research activities also in the future. The Copernicus services 
build  on  the  results  of  FP7  projects  (e.g.:  MACC  II,  MyOcean2,  etc)  and  there  will  be  a 
similar need from the Space projects of the framework programme Horizon 2020 to provide 
further  guidance  and  inspiration  –  obtained  through  multi-national  European  projects  –  to 
help in the onward development of Copernicus, especially regarding the less mature elements 

41 

Only  the space  component  of  Horizon  2020  is  mentioned  here,  for  the safe of briefness;  nonetheless 
other research areas are clearly related to Copernicus and its services (e.g. Climate Change, Transport). 

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(e.g.  the  Climate  Change  Service)  and  the  future  evolution  (e.g.  through  emerging 
technologies). Other examples include contributions to the provision of better tools to access 
and analyse the data, to studying innovative downstream applications of Copernicus data and 
services and to support the establishment of Space Surveillance and Tracking capability. As 
far  as  COSME  is  concerned,  in  the  past  there  has  been  cooperation  especially  for  the 
European  Mobile  and  Mobility  Industries  Alliance  (EMMIA)  projects:  a  European 
Commission  initiative  which  fosters  the  cooperation  between  industries,  especially  SMEs, 
and  regional  authorities  in  the  field  of  mobility  and  mobile  services.  A  specific  call42  was 
made to help entrepreneurs who want to build downstream applications using Copernicus and 
Galileo and new initiatives are foreseen for the future. 

42 

Already € 3.5 million have been mobilized in 2012 to fund 6 demonstrators and an additional action 
providing more traditional business support for entrepreneurs developing new services relying on the 
two Commission space Flagships. 

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• 

5. 

OPTIONS AND IMPACT ANALYSIS 

Preamble 

The  whole  of  Annex  I  and  the  large  majority  of  this  Section,  while  based  on  material 
from  a  Specific  Contract  with  Space  Tec  Partners  under  the  Framework  Service 
Contract  89/PP/ENT/2011  –  LOT  3,  has  been  edited  and  updated  to  reflect  the 
Commission's proposal for a Regulation establishing the Copernicus programme. 

This section presents the key results from the overall impact analysis. A more comprehensive 
description,  along  with  details  of  the  analysis  methodology,  is  presented  in  Annex  I.  It  is 
important  to  note  that  the  most  up-to-date  version  of  the  so-called  “Injection  Paper”  (the 
deliverable  from  the  Specific  Contract)  has  been  used  in  this  updated  Impact  Assessment 
(and  is  included  as  Annex  I).  The  most  significant  difference  from  previous  version  is  the 
assumption that the level of funding for Copernicus in the period 2021-2030 will be the same 
as that applicable during the current MFF. This change was requested and allows an analysis 
that is not complicated by guesses of future budget variability which are necessarily based on 
mere  speculation.  It  does  not  impact  in  any  way  the  opinions  expressed  by  the  IAB  on  the 
previous submission.  

Preliminary considerations 

All options in this impact assessment share some common elements that are described below. 

Infrastructure at Member State level 
GMES/Copernicus is partly based on an existing infrastructure at Member State level, of so-
called  "in  situ"  components  (airborne  or  ground-based  sensors)  and  space  components  (so-
called "contributing missions"). The starting assumption is that Member States will continue 
to invest in their space and in situ infrastructure for their own purposes, as they have done in 
the past. 

Principle of modularity 
The  modularity  principle  refers 
implementation  of 
GMES/Copernicus based on budget constraints. The principle applies both to the services and 
to the infrastructure investment. For instance, if under one of the options, the available budget 
would be still somewhat lower than what is foreseen in the option, the services can be slightly 
reconfigured  and  still  be  provided  with  a  reduced  portfolio  of  products.  Therefore  the 
GMES/Copernicus programme has no systemic risk of cost overrun. 

the  possible  differentiated 

to 

5.1. 

Different options on budget allocation 

Given  the  amount  of  funding  decided  by  the  European  Council  for  the  Copernicus 
programme,  the  three  scenarios  (options)  described  in  this  section  examine  the  effects  of 
varying  the  amount  apportioned  to  the  three  main  components:  space  infrastructure, 
contribution  to  the  in  situ  infrastructure  and  the  financing  of  the  Services.  The  analysis 
emphasises  the  trade-off  between  investments  in  space  infrastructure  and  services,  while 
keeping  the  expenditure  on  the  in  situ  stable,  given  the  inherent  nature  of  this  component 
(primarily reliant on national investments).  

The logic applied in designing the three cost breakdown scenarios in this analysis proceeds as 
follows: 

Previous  studies  have  identified  minimum  annual  budget  levels  for  the  three  components, 
below which realisation of benefits falls rapidly. 

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The first scenario represents the maximum investment in the Service component. 

The  remaining  two  scenarios  adjust  the  levels  of  the  Space  component  upwards,  and 
apportion the remaining budget to the Services component. 

The  analysis  of  the  possible  funding  scenarios  shows  that  investment  should  be 
proportionally  higher  than  previously  envisaged  in  the  service  component,  including  their 
initial  set up and the  continuous  improvement of the specific services.  Nonetheless,  a  large 
investment in the space component still remains necessary since this will provide the EC with 
the  essential  source  of  sustained,  independent  and  comprehensive  Earth  Observation  data, 
whose  exploitation  is  underpinned  by  a  well-defined  full  and  open  Data  Policy.  This  is  of 
crucial importance when it comes to private business development: a stable and transnational 
regulatory  framework  is  one  of  the  enabling  factors  for  private  entrepreneurs  to  invest  to 
develop businesses with Copernicus data. 

For  the  space  component,  ESA  has  proposed  a  revised  strategy  for  Sentinel  satellite 
development and deployment which reflects the reduction in the available budget but which 
responds  to  the  essential  need  for  continuity  of  space-based  observations.  This  re-planning 
includes three major changes when compared with the previously agreed Copernicus Long-
Term Scenario (LTS) as follows: 

Recurrent  –C  and  –D  units  of  all  the  Sentinels  are  introduced.  These  provide  for  data 
continuity  and  have  the  benefit  of  the  economies  of  scale  at  the  expense  of  postponing  the 
evolution of observational needs. The development of these units will take place during the 
MFF period, although their eventual launch and operations will occur post 2020; 
Related to the above point, the development of the Sentinel-NG (Next Generation) satellites 
is deferred beyond 2020; 
Less  funds  than  previously  foreseen  will  be  committed  to  securing  access  to  data  from 
contributing missions (i.e. satellites other than the Sentinels). The impact of this decision is 
mitigated  by  the  fact  that  data  from  the  Sentinels  will  become  available  progressively  over 
time, obviating the continued need/importance of some third-party data sets. 

This  approach  clearly  puts  the  onus  on  the  Services  and  the  downstream  applications  to 
exercise  their  creativity  and  expertise  to  the  maximum  extent  to  continually  find  new  and 
novel  ways  of  making  the  most  benefit  from  the  existing  data  while,  at  the  same  time,  to 
expend  effort  in  capturing  the  changing  requirements  that  must  be  consolidated  for  the 
planning of future (post 2020) developments with confidence. 

This approach results in the revised Sentinel development/deployment baseline described in 
the diagram below. 

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5.2.  Methodology 

In 2011 Booz & Company was commissioned by the European Commission to undertake a 
Cost-Benefit Analysis (CBA) of the GMES programme. The main focus of this study was the 
assessment  of  four  broad  funding  levels  for  GMES  and  its  operational  services.  The 
evaluation of benefits was mainly based on the role EO infrastructure plays in supporting the 
implementation of government policies aimed at better managing the environment and issues 
related  to  security.  Based  on  this  assumption,  the  study  analysed  the  value  of  information 
GMES provides to support policy action and resource management across the EU and further 
afield. 

In order to establish these benefits (and how GMES may reduce various costs), a  literature 
review  of  the  economic  value  of  information,  combined  with  interviews  and  desktop 
research, enabled the development of assumptions around the incremental benefit from better 
EO information. Four options were provided for analysis under the cost-benefit assessment: 

Option  A  (Baseline  Option  with  no  on-going  commitment  to  replace  infrastructure  or 
investing significantly in services); 
Option  B  (Baseline  Option  Extended,  but  still  with  no  on-going  commitment  to  replace 
infrastructure over the longer term and invest significantly in services); 
Option C (Partial Continuity, with commitment to provide Sentinel infrastructure and invest 
considerably  in  services,  with  limited  support  to  ensuring  continuity  of  data  from 
Contributing Missions); and 
Option D (Full Continuity with commitment to provide Sentinel infrastructure and enhanced 
support for the continuity of data from Contributing Mission with full investment in services). 

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The  quantification  of  benefits  was  based  on  an  approach  that  attributes  to  GMES  an 
incremental improvement in outcomes, e.g. measured as a change in baseline environmental 
damage costs. This recognised that the attainment of particular outcomes in each benefit area 
is a result of multiple factors, of which the contribution by GMES is only one part. The extent 
of GMES contribution was taken into account in the analysis for each benefit area. 

A new study was commissioned from SpaceTec Partners to re-examine the original CBA in 
the  light  of  potential  budgetary  and  governance  choices.  The  methodology  adopted  in  the 
Booz CBA was based on a Copernicus “full continuity” scenario (referred to as Option D), 
and  then  applying  progressive  degradation  to  each  of  the  other  options  in  relation  to  this 
scenario. This scenario was used as the reference case in the new SpaceTec Partners study. 
The  “progressive  degradation”  principle  is  applied  in  the  present  analysis  to  establish  the 
baseline  for  analysing  the  changes  in  the  allocation  of  funding  amongst  the  different  main 
cost areas, and the like-for-like estimation of benefits, subject to the understanding that there 
are limits to the validity of this principle, such as minimum and upper thresholds on benefit 
realisation. 

The CBA regards each of its options “as being discrete” (Booz CBA, p. 99), meaning that the 
benefits  do  not  grow  linearly  in  relation  to  the  level  of  investment,  but  are  the  outcome  of 
different configurations of the Space, Service and In Situ components within the options. In 
other  words,  a  step  function  is  at  work,  with  threshold  boundaries  separating  unconnected 
plateaux of benefit escalation. 

This is particularly true in the case of the Space component; since the Sentinels are deployed 
in  units,  there  are  limits  as  to  what  can  be  achieved  with  specific  levels  of  funding.  Minor 
deviations around these step changes do not serve to alter the benefit profile in a significant 
way.  Whilst  this  proposition  is  not  readily  observable  in  the  Booz  CBA  because  of  the 
proportionally  large  gap  between  the  funding  levels  of  each  option,  it  is  recognised  that  in 
each case, a step change in commitment (and hence, benefits) has taken place. 

In  order  to  refine  the  analysis,  the  SpaceTec  2013  study  examined  the  extent  to  which 
benefits  scale  in  relation  to  the  level  of  funding  allocated  between  the  Space  and  Service 
components, in particular. This analysis allows a comparison of the three scenarios analysed 
in  this  Impact  Assessment,  that  all  share  the  same  budgetary  envelope.  The  following 
assumptions underpin the present analysis as regards the scaling of benefits: 

Investment  in  the  Space  component  is  a  necessary,  but  insufficient  condition  for  the 
realisation of benefits.  

In order for benefits to arise, parallel investments must be made in Services. 

A  step  change  in  benefits  occurs  once  investment  in  Space  reaches  a  certain  threshold. 
Beyond this threshold: 

Additional investment in Space does not bring about linear increases in benefits 

Step-changes in benefits are contingent on additional investment in Services. 

Benefits  linked  to  investments  in  services  are  more  linear,  with  incremental  benefits 
possible  through  service  improvement,  extension  to  scope,  and  the  development  of  new 
services. These nonetheless remain dependent on upgrades or enhancements to the underlying 
Space infrastructure for larger step changes, accompanied by more major service-supporting 
developments such as improved access to data and the enabling of the downstream sector43. 

43 

For full considerations regarding enabling factors, refer to Annex I 

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While the in situ component also plays a role in the scaling of benefits, it is not shown here as 
the Space-Services relationship is considered to have the most impact on the present analysis. 

5.3. 

Options description 

The Cost-Benefit Analysis will analyse the three scenarios described below: 

Service Delivery Pull 

This scenario foresees a relatively large share of the available budget being used to finance 
the provision of services. This scenario allows for a level of funding for the Space component 
in line with previous studies (namely the Booz CBA option B). The realisation of additional, 
programme-wide  benefits  rests  on  the  development  of  the  Service  component  and  on  the 
implementation  of  its  enabling  factors.  In  this  scenario,  the  deployment  of  the  Space 
component  is  assumed  to  follow  a  serial  approach  (i.e.  the  Sentinel  series  of  satellites  are 
deployed in series). This scenario would therefore try to combine the minimum investment in 
space infrastructure with the maximum possible financial allocation to services. 
Intermediate 

The “Intermediate” scenario increases the investments in the Space component with respect 
to the first, while the Services component is reduced proportionally. In this scenario, as in the 
previous one, the deployment of the Space component is assumed to follow a serial approach. 
This  scenario  illustrates  the  impact  of  adding  emphasis  to  the  evolution  in  contrast  to  that 
attributable to the impact of evolving services. 

Technology Driven 

This  scenario  foresees  the  highest  possible  investment  in  the  Space  component  while  the 
Services  component  would  be  reduced  to  the  bare  minimum.  This  scenario  would  be 
completely  driven  by  advances  in  Space-based  remote  sensing  technology  but  would  not 
necessarily embrace the priorities elaborated by the users of the Services. 

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5.4. 

Analysis of impact of options on budget allocation 

The budgetary allocation assumptions for each scenario, given a fixed total budget, and the 
benefits for each of the scenarios are presented in the tables below: 

Table 2 - Cost Distribution by Scenario (Annual Averages) 

I - Service Delivery 
Pull 

II - Intermediate 

III - Technology 
Driven 

Space 

in 
situ 

Services 

Space 

in 
situ 

Service
s 

Space 

in 
situ 

Services 

Annual 
average 

€ Mio 

400 

22 

119 

422 

22 

97 

438 

22 

81 

541 

% 

74% 

4% 

22% 

78% 

4% 

18% 

81% 

4% 

15% 

TOTAL 

2014-2030 

Source: SpaceTec Partners 2013. 

Table 3 - Benefit Simulation by Scenario 

2014-
2020 

2021-
2030 

TOTAL  
(2014-2030) 

Integrated 
contribution 

Integrated Benefit 

Cost Ratio (BCR) 

to European GDP 

Cumulative, € Bn 

% 

I - Service 
Delivery Pull 

6,3 

23,0 

29,4 

0,164% 

II - Intermediate 

6,1 

22,1 

28,2 

0,157% 

III - Technology 
Driven 

5,9 

20,8 

26,7 

0,149% 

Ratio 

3,30 

3,17 

3,01 

Source: SpaceTec Partners 2013. 

Downstream Impact 

In  addition  to  the  direct  benefit  analysis,  the  economic  impacts  associated  with  the  Earth 
Observation and GMES/Copernicus downstream market have been estimated by scenario, as 
illustrated in the chart below. 

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Figure 1 - Projected Downstream Turnover By Scenario (2014-2030, € Bn) 

Source: SpaceTec Partners 2013. 

Impacts on employment 

The  impact  on  employment  has  been  estimated  for  each  scenario,  considering  direct  and 
indirect employment separately. The effects of different funding inputs have been modelled 
according to the cost scaling parameters outlined in Annex I. 

Table 4 - Employment Impact by Scenario  

(US: Upstream, MS: Midstream, DS: Downstream, DE: Direct Employment, IE: Indirect Employment, T: Total) 

(Figures rounded up to nearest 10) 

I - Service Delivery Pull 

II - Intermediate 

III - Technology Driven 

DE 

IE 

T 

DE 

IE 

T 

DE 

IE 

T 

Number of jobs created / maintained by 2030 

TOTAL
(2014-
2030) 

US 

MS 

DS 

T 

2.030 

5.270 

7.300 

2.140 

5.550 

7.690 

2.220 

5.770 

7.980 

710 

1.830 

2.540 

680 

1.750 

2.420 

650 

1.690 

2.340 

7.170 

29.340 

38.510 

8.710 

27.850 

36.550 

8.460 

27.070 

35.530 

11.900 

36.440 

48.330 

11.510 

35.150 

46.650 

11.330 

34.520 

45.840 

Source: SpaceTec Partners 2013. 

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Economic, Environmental and Social Benefits 

The  benefits  of  each  scenario  have  been  categorised  according  to  their  economic, 
environmental, and social dimensions, both qualitatively and quantitatively.  

Table 5 - Summary of Economic, Environmental and Social Benefits (Quantitative) 

Benefit 
Categories 

Values 

I - Service 
Delivery Pull 

II - Intermediate 

III - Technology 
Driven 

Total Space Turnover 
(2014-2030) 

8.002 

8.306 

8.542 

Economic 

Total Downstream 
Turnover (2030) 

€ Mio

1.034 

Combined Δ Scen. I 

% 

0% 

981 

-2% 

954 

-4% 

Environmental 

Total (2014-2030) 

€ Mio

17.611 

17.005 

16.158 

Δ Scen. I 

% 

0% 

-3% 

-5% 

Total (2014-2030) 

€ Mio

11.585 

11.045 

10.415 

Employment Impact44 
(2030) 

Social 

# 

48.330 

46.650 

45.840 

Δ Scen. I (Benefits) 

% 

Δ Scen. I (Employment)  % 

0% 

0% 

-5% 

-4% 

-10% 

-5% 

In order to complement the analysis being carried out by Booz, the SpaceTec study used an 
additional  model,  the  FeliX  model,  a  system  dynamics  model  and  benefit  simulator,  which 
takes  into  account  the  complex  relationships  between  natural  and  socio-economic  systems 
has  been  developed  by  SpaceTec.  The  model  forecasts  benefits  that  are  in  the  order  of 
magnitude  of  €  21.700  Mio  cumulatively  by  2020  and  €  220.000  Mio  by  2030 
(undiscounted),  substantially  higher  (~8  times,  in  the  long  term)  than  the  ‘static’  benefit 
projections of the present study. This is due to the enlarged scope of the FeliX model, and its 
broad  assumptions  of  underlying  infrastructure  (namely  GEOSS45,  to  which  Copernicus  is 
expected  to  constitute  the  EU’s  major  contribution).  The  comparison  with  the  FeliX  output 
serves  to  highlight  the  strong  potential  for  higher-order  magnitudes  of  benefits  when 
Copernicus is viewed as part of a broader system of systems. The figures used in this impact 
assessment are therefore considered to be conservative estimates. 

Figure 2 - Potential Range of Benefit Scaling Based on FeliX Model 

44 
45 

Refers to total direct and indirect new and maintained jobs associated with Copernicus. 
Global Earth Observation System of Systems. 

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Source: SpaceTec Partners 2013. 

5.5. 

Cost-Benefit Analysis 

This section summarises the results of the scenario analysis presented in this chapter. 

Table 6 - Integrated Impact Simulation by Scenario (Undiscounted) 

2014-2020 

Cumulative Benefits 

2021-2030 

Cumulative Benefits 

Cumulative Benefits 

€ Bn 

TOTAL 

(2014-2030) 

Downstream Impact in 
2030 

Integrated contribution 
to European GDP 

I - Service 
Delivery Pull 

II - Intermediate 

III - Technology 
Driven 

6,3 

23,0 

29,4 

1,03 

6,1 

22,1 

28,2 

0,98 

5,9 

10,8 

26,7 

0,95 

% 

0,164% 

0,157% 

0,149% 

Integrated BCR 

ratio 

3,30 

3,17 

3,01 

Source: SpaceTec Partners 2013. 

The analysis has examined three  scenarios  with different  proportional allocations  of budget 
amongst  Space,  in  situ  and  Services.  The  scenario  “Service  Delivery  Pull”  has  the  highest 
benefit  potential,  at  €  29,4  Bn  cumulatively  over  the  2014-2030  period,  and  the  highest 
integrated Benefit Cost Ration (BCR) at 3,30. 

Scenario I: Service Delivery Pull 

The  larger  benefits  projection  in  this  scenario  is  due  to  the  increase  in  investment  in 
services, coupled with the serialised deployment of the Space component, conferring the 
necessary 
longevity  and  programme  commitment  for  the  development  of  the 
downstream sector. 

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Overall,  this  scenario  represents  an  interesting  mix  of  investments.  It  capitalises  on  the 
marginally  increased  investment  in  Services  against  a  “legacy”  level  of  Space  component 
investment. The programme’s continuity is assured until 2030. The level of funding for the 
Space  component  should  include  some  allowance  for  preparatory  activities  leading  into 
developing  the  next  generation  of  Sentinels.  It  is  assumed  also  that  ESA  will  continue  to 
fund,  to  a  large  extent,  all  the  preparation  and  pre-development  activities  for  the  future 
generation satellites, plus the development of the prototype units. 

The impact of funding services at this level leads to a higher, relative level of benefits, given 
the  strong  coupling  between  services  and  benefits.  The  impact  should  be  ensured  by  an 
appropriate  expansion  of  the  Copernicus  services,  by  ensuring  access  from  everywhere  in 
Europe to the services and data, by enforcing adequate standards for products, by supporting 
the expansion of the downstream sector and sustaining the user community in the access to 
and adoption of new products, services. 

Scenario II: Intermediate 

This scenario represents less of an increase in benefits with respect to “Service Delivery 
Pull”, due to the higher spending in Space at the expense of Services. 

The objectives and extent of the investment in Services remain substantially the same as in 
the previous scenario, only to a slightly lesser degree. 

The Space component has additional margin for preparing the next generation, but part of this 
extra  should  be  dedicated  to  ensuring  wider  circulation  of  data  to  different  user  categories 
(science,  commercial,  downstream,  regional,  etc.).  This  amount  does  not  allow  a  change  in 
philosophy from the serial deployment of Sentinels. As in the previous one, it relies heavily 
on the Contributing Missions. 

Scenario III: Technology Driven 

This scenario presents a significant drop in overall benefits with respect to the previous 
ones,  as  the  transfer  of  funding  from  the  Services  to  the  Space  component  does  not 
compensate for the loss in benefits. 

This scenario does not offer many reasons to be recommended. It poses questions about the 
use  of  the  extra  funding  for  Space  (for  example, starting  a  different  family  of  Sentinels,  or 
adding  C/D  units)  and  does  not  sufficiently  encourage  the  expansion  of  services  and  their 
availability to a much wider user community. 

All  projected  benefits  in  this  analysis  are  contingent  on  the  implementation  of  a  set  of 
enabling factors, including regulatory and market development actions, summarised in Annex 
I. 

5.6. 

Key enabling factors and the impact of a reduced budget 

The initial phase has mainly been based on research projects, which have also led to the birth 
of the first two operational services (i.e. Land and Emergency Management). On the basis of 
this experience, the GMES Unit is now presenting the proposal for the Regulation with the 
aim of putting in place the framework necessary for the theoretical benefits to be realised. In 
particular,  sustained  data  availability,  quality  and  continuity,  underpinned  by  a  data  policy 
that ensures full, open and free-of-charge access, combined with a strategy ensuring historic 
data preservation, appear to be necessary factors for the private sector to invest in the use of 
Copernicus  data  to  develop  new  businesses  and  also  for  the  public  sector  to  have  the 
information  they  need  to  support  their  policies  and  their  monitoring  roles.  The  budget 

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apportionment  and  the  governance  choices  will  particularly  affect  the  quality  and  the 
continuity of data provision. 

To some extent, the reduction in the budget could be foreseen as a likely outcome of the MFF 
debate and so, in anticipation of the decision of Council, analyses of several possible funding 
scenarios  were  conducted  with  the  aim  of  mitigating  the  impact  of  an  eventual  reduced 
budget.  The  key  drivers  were  to  ensure  the  continuity  of  space-based  observational  inputs 
(necessitating  some  re-planning  of  the  Sentinel  developments  and  deployments)  and  to 
preserve the effectiveness of the services – and hence maximising their downstream impact – 
by  assigning  as  much  of  the  remaining  budget  as  possible  to  them.  The  decision  on  the 
apportionment  of  the  available  budget  to  the  three  component  areas  is  informed  by  the 
analyses and reflects the most favourable scenario analysed. 

The proposal had to be adjusted to take account of the fact that the MFF cut the initial amount 
by  over  2  Billion  EUR.  In  order  to  preserve  service  delivery,  the  Commission  had  to  cut 
expenditure for new developments of the space component during the MFF period. ESA will 
take  over  responsibility  for  the  development  of  the  next  generation  of  the  Sentinels. 
Moreover, the introduction of the next generation will be postponed. Instead, the D-Units of 
the Sentinels will be procured as explained in section 5.1 of the Impact Assessment. This will 
maintain the quality and continuity of the satellite data whilst postponing the introduction of a 
more modern generation of Sentinels to the second part of the next decade. 

5.7. 

Expenditure profile considerations 

The Commission shall establish a multi-annual plan for the implementation of the Copernicus 
programme. In order to optimise the implementation, a mix of annual and multi-annual work 
programmes  will  be  adopted.  Moreover,  such  is  the  nature  of  the  transition  to  routine 
operations, it is also envisaged that the allocation of funds during the MFF period shall reflect 
the  ‘ramping  up’  characteristic  of  the  various  Copernicus  Services  over  time  as  well  as 
reflecting  the  expenditure  needs  resulting  from  the  revised  satellite  development  and 
deployment.  Hence  an  adjusted  yearly  allocation  of  the  budget,  constrained  by  the  overall 
envelope, will be needed. This is anticipated to result in a peak of expenditure in 2017 and 
2018.  Administrative  expenditure  (including  human  resources)  is  expected  to  remain  at  a 
constant level throughout the MFF period. 

The analysis of benefits performed by Space Tech Partners did not attempt to reflect the year 
on  year  variability  in  expenditure  but  rather  assumed  a  constant  average  spend  each  year. 
This was decided due to the uncertainties currently present in the spending profile combined 
with the likely marginal impact that might be expected (since benefits are generally shown as 
cumulative). 

5.8. 

Conclusion 

The  above  Cost-Benefit  Analysis  shows  that  within  the  budget  foreseen  by  the  European 
Council, Scenario I (Service Delivery Pull) would have the highest benefits and therefore 
would be most cost-effective scenario. 

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6. 

OPTIONS AND IMPACT ANALYSIS ON GOVERNANCE  

Preamble 

The content of this section has, to some extent, been overtaken by internal discussions 
and other events since it was first presented in the IA. However, since not all questions 
have yet been completely addressed, it has been retained in this version for the sake of 
completeness.  

6.1. 

State of play 

•  The objective for governance is to assure that all aspects ranging from policy supervision 

to technical implementation are clearly fulfilled by mandated organisations: 

– 

– 

– 

– 

The  policy  supervision  and  overall  coordination  consists  in  defining  the  policy 
objectives, the high level orientations and content of the programme, the associated 
budget  requirements,  the  main  organisational  and  architecture  principles,  and  the 
overall guidelines for programme implementation. It also covers the coordination of 
funding commitments from stakeholders.  

Management:  the  managing  authority  follows  the  political  guidelines  and  is  in 
charge  of  the  management  of  budgets  for  the  implementation  of  tasks.  It  prepares 
and implements the work programmes and supervises the implementation of tasks. It 
is responsible for the preparation of administrative arrangements (e.g. calls, grants, 
delegations…) to the entities who will be in charge of the technical implementation 
of the tasks;  

Technical  coordination:  is  usually  carried  out  by  the  management  authority,  but  in 
some  cases,  the  latter  may  delegate  some  tasks  to  a  body,  e.g.  preparation  of 
contracts  and  Service  Level  Agreements,  monitoring  of  the  task  implementation, 
certification  of  products  and  services,  consolidation  of  user  and  service 
requirements. 

The  technical  implementation  is  ensured  by  the  operating  entities  (industrial 
companies,  networks  of  centres…)  in  charge  of  specific  tasks  (construction  of 
satellites,  delivery  of  services).  The  assignment  of  this  responsibility  will  follow  a 
competitive approach (e.g. Calls for Expressions of Interest) to ensure transparency 
and fairness. 

•  Under  the  current  GMES/Copernicus  programme46,  the  Commission  is  in  charge  of  the 
political  supervision  and  overall  coordination  of  the  GMES/Copernicus  programme, 
including management of the services, and of the EU budget47. The technical coordination 
of  some  activities,  including  budget  management  for  the  implementation  of  tasks,  are 
outsourced  to  external  entities  such  as  ESA  for  the  space  component,  or  the  European 
Environment Agency (EEA) for the in situ component. 

•  The responsibility for the technical implementation of the services must, on the one hand, 
take  into  account  the  invaluable  experiences  gained  during  the  GIO  (and  earlier)  phases 
while, on the other hand, pay due respect to the principles of open competition. The latter 
concern should take account of the presence of the open competition that underpinned the 

46 

47 

The Commission described its overall approach for the governance of GMES in its Communication of 
28 October 2009 entitled "Global Monitoring for Environment and Security (GMES): Challenges and 
Next Steps for the Space Component".  
See Annex VI, Evaluation of the Activities of the GMES, Bureau: Executive Summary. 

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awarding of the FP7 funded pre-cursor services as well as ensuring that principles of open 
competition are embraced by the coordinating entities of the services through the selection 
of partnership arrangements.  

•  The topic of governance has been discussed at different occasions. Stakeholders agree that 
the  GMES/Copernicus  programme  is  very  complex  and  the  technical  implementation 
could  be  done  by  an  external  agency,  enabling  the  European  Commission  to  focus  on 
political supervision. 

6.2. 

Options on programme governance 

6.2.1.  Option A: Commission in charge of overall coordination and management  

Under  this  option,  the  Commission  would  remain  in  charge  of  the  political 
supervision  and  the  overall  coordination  of  the  programme,  including  the 
management  of  tasks.  The  technical  coordination  of  space  infrastructure  would  be 
outsourced to competent bodies, such as ESA and EUMETSAT, and agencies such 
as EEA and ECMWF for the in situ component and/or the technical implementation 
of  appropriate  services.  The  Commission  would  take  decisions  regarding  the  daily 
management of the programme and would also implement the budget.  

6.2.2.  Option B: Delegation of the management to an existing European Agency 

The  Commission  would  remain  in  charge  of  the  overall  coordination  and  political 
supervision  of  the  programme  but  not  of  its  management.  Management  activities, 
such as the budget implementation, would be delegated to an external entity/Agency 
(or to several entities) who already possess the appropriate skills. The Commission 
would remain in charge of relationships with partners and users.  

6.2.3.  Option C: Delegation of the coordination and management to the European Space 

Agency  

The  Commission  would  no  longer  be  in  charge  of  the  programme.  The  overall 
coordination, including budget management and implementation of tasks, would be 
delegated to ESA, subject to the appropriate amendment of the constituent acts or to 
functional  arrangements.  The  Commission  would  no  longer  be  in  charge  of  the 
political supervision of the programme and of relationships with partners and users.  

6.2.4.  Option D: Delegation of the management to a new Agency 

Compared  to  the  options  described  above,  a  new  Agency  would  be  set  up  for  the 
programme  management  of  GMES/Copernicus  and  the  implementation  of  the 
corresponding budget. This new agency could be an EU Agency or an international 
one.  

6.3. 

Impact analysis on governance 

6.3.1.  Option A: Commission in charge of management 

The  advantage  of  this  option  is  that  the  current  set  up  would  not  be  disrupted.  With  the 
outsourcing  of  tasks,  the  impact  on  the  EU  resources  would  be  limited.  However,  the 
Commission would remain involved in the direct management of the operational phase of the 
programme,  including  the  budget  implementation,  while  it  should  concentrate  on  its  core 
business, namely the political supervision of the programme. 

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6.3.2.  Option B: Delegation of the management to an existing European agency 

The  Commission  would  play  a  political  role  of  supervision  and  coordination.  The 
daily management would be entrusted to entities more suited to this role with more 
specialized  staff,  under  the  control  of  the  Commission.  The  delegating  tasks  to  an 
Agency  would  still  have  an  impact  on  EU  resources.  This  option  is  in  full  respect 
with  the  separation  principle  between  supervision  and  management.  Moreover, 
operational efficiencies could be created if synergies with other programmes can be 
realised.  

6.3.3.  Option C: Delegation of the coordination and management to the European Space 

Agency 

The management would be entrusted to an entity with experience in this role and the 
impact on EU resources would be minimised. However, the Commission would lose 
political control over the programme and its influence in defining the objectives and 
requirements.  In  addition,  the  implementation  of  and  access  to  GMES/Copernicus 
infrastructure  and  services  may  be  reduced  to  a  few  Member  States  willing  to 
continue  their  investments  into  GMES/Copernicus.  GMES/Copernicus  would  then 
risk  becoming  a  technology  pushed  programme  instead  of  a  user  driven  one.  The 
management of an operational programme such as GMES/Copernicus could require 
amendments to the ESA Convention, which could be difficult to obtain and require a 
long time (ESA currently being a research and development Agency, ESA Member 
States may not necessarily be prepared to amend its statute). It should also be clear 
that ESA is a space agency whereas GMES/Copernicus has a large part of activities 
that go beyond launching satellites. This may mean that under ESA management the 
services  and  in  situ  component  of  GMES/Copernicus  are  liable  to  receive  a  lower 
level of focus. 

6.3.4.  Option D: Delegation of the management to a new agency 

a  political 

this  option, 

the  Commission  would  play 

In 
role  of 
supervision/coordination. The daily management would be entrusted to entities more 
suited to this role, under the control of the Commission. Opting for an international 
organisation would not impact EU resources. This option is however likely to make 
the institutional landscape more complex with one new entity. Synergies would not 
be  maximised,  with  potential  risks  for  the  implementation  of  the  programme.  In 
addition,  creating  a  new  entity  could  prove  either  too  complex  and  long  (e.g. 
international organisation) or incompatible with  the EU policy of not creating new 
agencies. A new Agency would require substantial additional resources. 

6.4. 

Decisions on governance 

Various  options  for  the  governance  of  Copernicus  are  described  above.  An  assessment  of 
these options and other factors has led to the following governance proposal. 

General considerations: 

The  Commission,  assisted  by  a  dedicated  Copernicus  Committee,  should  have  the  overall 
responsibility for the Copernicus programme; it should define its priorities and objectives, in 
accordance with the Copernicus Regulation, ensure the overall coordination and supervision 
of the programme; 
The  implementation  of  the  programme  should  be  delegated  to  entities  with  the  appropriate 
expertise.  The  Commission  should  rely,  whenever  possible,  on  the  capacities  of  competent 
Union agencies. 

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Specific considerations: 

The Commission shall entrust to ESA the development tasks of the space component; 
The  Commission  shall  entrust  the  operational  tasks  of  the  space  component  to  ESA  and  to 
EUMETSAT in accordance with their respective mandates; 
The Commission may entrust the operational tasks of the in-situ component to the operators 
of the services; 
The Commission shall award responsibility for the operation of the services to agencies who 
respond to a call for expressions of interest and who satisfy the Commission as regards their 
capabilities, experience and financial/operational capacity and suitability. 

6.5. 

Considerations on ownership 

Decisions  on  ownership  of  the  Sentinels  cannot  be  considered  in  isolation  of  decisions  on 
governance.  EU  ownership  of  infrastructure,  developed  specifically  for  GMES/Copernicus 
(in particular space infrastructure), would result in direct control of the assets by the EU. 

With  ownership  of  assets  comes  responsibility  for  associated  risks  and  liabilities.  For  the 
Sentinel satellites, which represent the largest value assets, the highest risks occur in relation 
to  their  launch  and  early  in-orbit  life  and  also  in  respect  of  their  potential  susceptibility  to 
damage from space debris, along with the implementation of the end-of-life scenario (i.e. de-
orbiting). By deferring the transfer of ownership until after the satellites have been launched 
and  successfully  completed  their  respective  in-orbit  validation  (IOV)  tests,  the  first  risk 
category is all but eliminated. Furthermore, the proposed Copernicus Regulation specifically 
identifies  an  operational  activity  delegating  the  physical  preservation  of  the  satellites  to  the 
agencies responsible for their routine operations, thereby addressing the second risk category. 

While  the  risk  from  ownership  is  low,  it  has  to  be  noted  that  EU  should  not  forego  the 
benefits  of  ownership  stemming  from  such  a  major  investment.  In  fact,  it  would  be 
inappropriate  for  the  EU  to  invest  some  3.8  Bn  EUR  without  acquiring  ownership  of  the 
space infrastructure and all the data and information thereby produced. Thus, it is suggested 
that  the  EU  should  assume  ownership  of  the  tangible  and  non-tangible  assets  of  the 
programme. 

Co-ownership of GMES/Copernicus assets by different public entities could be more costly 
than  EU  ownership  only.  This  could  lead  to  a  governance  structure  for  GMES/Copernicus 
that is too complex and potentially to higher costs. 

In  a  data  purchase  scheme,  the  EU  would  not  own  infrastructure,  but  would  acquire 
ownership or exclusive licences for parts or all data collected by one or more satellites. The 
advantage of this option would be that the EU would avoid direct involvement in the complex 
technical operations of the space infrastructure, which, however, could also mean that the EU 
cannot  influence  strategic  decisions  taken  by  the  infrastructure  owner.  The  inconvenience 
would be that the data policy would largely depend on the commercial strategy of the seller. 
Moreover, given the present structure of the satellite industry, the EU could find itself paying 
a large portion of the funds to satellite data providers of third countries, thus supporting the 
development  of  the  satellite  industry  of  those  countries  rather  than  investing  in  the 
development of the European satellite industry. 

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7. 

MONITORING AND EVALUATION 

7.1. 

Evaluation 

On-going evaluation will take place through the User Forum. An ex-post external evaluation 
will be organised in 2014, at the end of initial operational activities, and also it is planned that 
there shall be a mid-term evaluation of the operational programme in 2017. 

Three main indicator types will be considered: 

Sectoral performance indicators – e.g. context, trend and strategic indicators 

Policy indicators – setting out the link between objectives, the achievement of policy goals 
and the criteria needed to measures progress towards these. 

Programme indicators linked to the implementation of specific activities – indicators that 
measure  progress  towards  the  achievement  of  goals  linked  to  activities  within  specific 
Copernicus' services, and those few that can be aggregated. 

The  GMES  unit  has  already  undertaken  some  work  to  develop  sectoral  performance 
indicators.  These  are  important  indirect  proxies  of  the  programme’s  success,  but  are 
contextual  in  nature.  It  is  important  that  the  indicator  framework  builds  on  these  existing 
indicators.  

An overview of those suggested is provided below: 

Upstream indictors, relating to space infrastructure and services such as satellite application 
systems,  launcher  systems,  scientific  systems  and  ground  systems,  as  well  as  the 
manufacturing and development of earth-based infrastructure (sensors etc...); 

Midstream indicators relating to the production, distribution, dissemination of data and data 
processing; and 

Downstream indicators on the use of EO services and products both by the public sector and 
the commercial one, focussing on the opportunities for spin-off companies. 

These  indicators  provide  a  useful  framework  to  develop  a  better  understanding  of  the 
enabling factors that will lead to the development of EO products and services. They are also 
interrelated, with the development of downstream applications and services having knock-on 
upstream  effects  by  potentially  creating  an  increase  in  demand  for  data  and  enhancing  the 
commercial viability of space infrastructure. 

At  this  stage,  monitoring  the  development  of  downstream  services  can  mainly  be  achieved 
indirectly through sectoral performance monitoring. In the future, it may be possible through 
evaluation and improved monitoring  processes within Copernicus full  operations  to capture 
the  direct  longer  term  results  and  impacts  of  the  development  of  downstream,  measured  in 
terms of their contribution to employment and growth.  

There is also a need to develop indicators to assess programme outcomes, measured in terms 
of outputs and results. A study requested by the Commission to CSES advocated including a 
small  number  of  indicators  for  the  overall  services  (e.g.  service  user  uptake,  financial 
implementation),  and  then  some  supporting  indicators  relevant  to  each  of  the  two  services, 
EMS-Mapping and the GIO land. 

Examples  of  quantitative  indicators  are:  the  number  of  registered  users,  the  number  and 
volume  of  data  downloads,  the  number  of  service  activations,  the  number  of  data  products 
used,  etc.  Qualitative  indictors  will  also  provide  some  interesting  information  that  can  be 

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used  as  indicators.  These  could  include  ease  of  access  to  reference  data,  harmonisation  for 
available data between Member States etc. 

The indicator framework should include specific indicators relevant to each service so as to 
provide  monitoring  information  about  the  extent  of  usage  of  data  products,  the  purpose  for 
which  these  are  being  used  and  the  uptake  of  specific  services.  It  would  also  be  useful  to 
incorporate indicators in the framework that can be aggregated across Copernicus services to 
complement service-specific ones.  

Within  this  broad  set  of  indicators,  the  main  types  of  indicators  that  should  be  taken  into 
account are:  

• 

Inputs  –  indicators  that  monitor  the  level  of  resource  requirement  to  implement  a 
particular policy measure, initiative or action.  

•  Outputs  –  indicators  that  monitor  immediate  outcomes  and  are  useful  for  internal 

management purposes. 

•  Results  –  indicators  to  assess  medium-term,  intermediate  policy  outcomes.  It  should 
also  reflect  the  intervention  logic  of  the  specific  objective  under  which  measures  / 
initiatives have been supported. 

• 

Impacts  –  longer-term  indicators  that  relate  to  the  achievement  of  high-level  global 
objectives  and  their  effects  (e.g.  economic  and  employment  impacts,  impacts  on 
innovation,  technology  transfer  and  progress  towards  strengthening  space  industrial 
competitiveness). 

A set of performance indicators is proposed in the table below. Although these are based only 
on  an  analysis  of  the  fast-track  services  implemented  under  the  GIO,  they  could 
nevertheless be considered as a template for the assessment of future services. 

Some  of  the  performance  indicators  relate  to  monitoring  internal  processes  e.g.  Length  of 
time to produce reference maps and some to user uptake and exploitation. Context indicators 
relating  to  sectoral  performance  of  the  upstream  and  downstream  EO  industry  are  also 
included in the table. 

Table 7: Proposed indicators 

Performance indicators 

No. of service activations 

Service –specific (EMS) 

(i) Rush Mode and (ii) Non-Rush Mode 

Organisation 
responsible for 
collecting data 

Output 

Sub-indicators for internal management purposes: by 
type (earthquake, explosions, fire, floods)  

No. of Member States triggering the service  

DG ECHO/ MIC 

Output 

-  EMS-Rush mode 
-  EMS-Non-rush mode 
-  EFAS 

No.  of  downloads  of  EMS-Mapping  data 
products 

DG ECHO/ MIC 

Output 

No. of downloads of EFAS products 

JRC 

Length of time to produce: 

-  Reference maps  

Service contractor 

Output 

Output 

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Service-specific 
indicator – GIO Land 

-  Delineation maps 
-  Grading maps 

Baseline (i) from point of service activation (ii) 
from point of reception of raw data 

Length of time between the production of maps 
and their dissemination to end-users 

DG ECHO/ MIC 

Output 

No. of users of EMS-Mapping data products 

DG ECHO/ MIC 

Result 

-  Rush mode 
-  Non-rush mode 
-  EFAS 

NFP 

Survey  of  members  of 
the 
network 
belonging  to  MIC  to 
ascertain  how  widely 
civil 
among 
used 
protection agencies. 

Number of GIO land product downloads 

EEA 

Output 

Pan-European component 

- 
-  Local component 
-  Global component 

Number of public authorities and wider organisations 
using land applications / services 

EEA 

Result 

Pan-European component 

- 
-  Local component 
-  Global component 

Number  of  new  applications  /  services  developed 
using GIO land data products  

EEA’s  Corine  Land 
Cover  User  Application 
Database 

Result 

No.  of  Member  States  having  harmonised  reference 
datasets through INSPIRE 

EEA 

Output 

No.  of  Member  States  making 
interoperable to the EC/ EEA/ JRC 

their  datasets 

EEA/ JRC 

Output 

No. of Member States for which GIO land data is the 
only reference data available 

EEA/ JRC 

Output 

Aggregate  Copernicus 
indicators 

Number  of  companies  that  have  used  GIO  data  to 
develop downstream applications and services 

Estimated number of jobs created as a result of these 
applications and services 

Number of companies relying on GMEs data for over 
20% of their turnover 

Indicator type 

Indicator 

Data source 

Output 

Result 

Result 

Type of 
indicator 

Sectoral indicators 
Upstream 

•Number of commercial and institutional launches 

•Share of launchers sales (and trends) 

ESPI, 
companies data 

Eroconsult, 

Context  

•European  satellite  manufacturing  market  share 
(commercial and institutional) 

Arianespace data 

•Number of potential international clients with which 
there  are  trade  barriers  (in  public  procurement  and 
other barriers)  

Company 
Euroconsult 

data 

, 

Ad hoc analysis 

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•Value of orders (by sector) 

•EU upstream trade balance  

Company data  

Eurostat 

Sectoral indicators 

•Turnover from EO data 

Companies data 

Context 

Midstream 

•Employment in midstream sector 

Sectoral indicators 
Downstream 

•EBIT / EBITDA of operators 

•Level of vertical integration between space actors  

•Employment 

•Share of SMEs in total firms in the sector / TO 

•Number  of  patents  developed 
services  

in  downstream 

•Ease of access to finance for start-ups 

•Number of application and services developed 

Companies  data,  ASD 
Eurospace 

hoc 

Ad 
analysis  

hoc 

Ad 
analysis  

qualitive 

qualitive 

Context 

Source: CSES 2012 

7.2.  Monitoring 

The  Commission  will  ensure  that  contracts  and  grants  concluded  in  the  framework  of  the 
Copernicus programme provide for supervision and financial control by the Commission, if 
necessary by means of on-the-spot checks, including sample checks, and audits by the Court 
of Auditors. If need be, the Commission could be assisted by external technical experts when 
monitoring the implementation of the programme. On the basis of the results of the on-the-
spot  checks,  the  Commission  will  ensure  that,  if  necessary,  the  scale  or  the  conditions  of 
allocation  of  the  financial  contribution  originally  approved  as  well  as  the  timetable  for 
payments are adjusted. 

In addition to financial supervision, the Commission will put in place mechanisms to ensure 
the  continuous  quality  of  the  services  provided.  This  will  be  realised  by  measuring  users' 
satisfaction  on  one  side  and  by  technical  audits  on  the  other  side.  Finally,  the  Commission 
will organise user fora in order to ascertain that services are user-driven. 

7.3. 

Anti-fraud measures  

The setting up of the operation will mainly take place through our partners: ESA for the space 
component  and  EEA  for  the  in-situ  component.  The  delegation  agreements  allow  the 
financial  flow  to  be  fully  controlled.  Public  procurement  will  be  used  to  subcontract,  and 
grants are limited, hence we can consider Copernicus not to be fraud-sensitive. 

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The annexes attached to this Impact Assessment are listed below along with a short rationale 
for their inclusion. 

ANNEXES 

# 

I 

Title 

Rationale for Inclusion 

Injection  paper  by  SpaceTec 
Partners 

analysis 

underpinning 

This  annex  forms  the  primary  input  into  the  cost-
Impact 
benefit 
Assessment. The document provides substantive and 
methodological  material 
the  key 
conclusions  in  Section  5  “Options  and  Impact 
Analysis”. 

supporting 

this 

II  List of acronyms and definitions 

Lists  acronyms  and  definitions  used  in  this  Impact 
Assessment. 

III  Reference studies and documents 

Lists  other  supporting  studies  and 
material. 

reference 

IV  Evaluation 

the  GMES 
of 
Preparatory Action (Conclusions) 

V  Evaluation  of  the  GMES  Initial 
Operations (Executive Summary) 

VI  Assessing  the  Economic  Value  of 
Copernicus:  “European  EO  and 
Copernicus  Downstream  Services 
Market  Study" 
–  Executive 
Summary 

VII  Summary  of  the  Booz  &  Co's 

Cost-benefit Analysis on GMES 

Summarises the conclusions of the Evaluation. 

Summarises the conclusions of the Evaluation. 

Summarises  the  conclusions  of  the  study,  which 
Impact 
forms 
Assessment’s evaluation of downstream impacts.  

important 

input 

the 

an 

to 

the 

conclusions  of 

Summarises 
study, 
undertaken  by  Booz&Co.  in  2011,  which  provide  a 
the  cost-benefit 
key  benchmark  underpinning 
analysis in the Impact Assessment. 

the 

VIII  The FeliX Model 

Provides  a  description  of  the  FeliX  model,  which 
serves  as  a  high-end  benchmark  against  the  CBA 
conclusions.  

IX  Comparison  of  the  PwC  2006 
study and Booz & Co's 2011 study 

Compares  the  two  major  cost-benefit  studies  on 
Copernicus.  

X  GMES  programme  -  overview  on 
the  evolution  and  funding  until 
2013 

Provides  an  overview  of  the  evolution  and  various 
funding inputs and their sources until 2013. 

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42 

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ANNEX I Injection Paper by SpaceTec Partners 
Injection Paper 
Specific Contract under the Framework Service Contract 89/PP/ENT/2011 – LOT 31 
Key Analysis for Copernicus Impact Assessment 

1 

This  paper,  while  based  on  material  from  the  Specific  Contract  referred  to  above,  has  been  edited  and 
updated to reflect the Commission's proposal for a Regulation establishing the Copernicus programme.  

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43 

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1. SUMMARY AND CONCLUSIONS  

The budget for the next Multi-Annual Financial Framework (MFF, 2014-2020), decided by 
the  European  Council  on  the  7th  and  8th  of  February  2013,  set  the  maximum  level  of 
commitment for the Copernicus programme at € 3.786 M. 

Based on this financial envelope for the Copernicus programme, the present study analyses 
the costs, benefits and impacts of three scenarios for the Copernicus programme with respect 
to  the  budgetary  distribution  across  the  Space,  In  Situ  and  Services  cost  categories.  The 
expected impact is expressed in terms of: 

The socio-economic and environmental benefits; 

The economic impact generated by the future, potential downstream services market; 

The overall impact on employment in the upstream, midstream and downstream markets. 

Two approaches have been applied in this analysis: a like-for-like comparison with the costs 
and  benefits  of  the  options  in  Booz  &  Company’s  “Cost-  Benefit  Analysis  for  GMES” 
(CBA2), completed in 2011 (using the same budget distribution), and a scenario analysis of 
the  costs  and  benefits  of  three  scenarios,  varying  the  budget  proportions  between  the  three 
cost categories given the funding envelope for Copernicus. In each case, two time horizons 
and total Copernicus funding assumptions are considered: €3,8 Bn in 2014-2020 (the 7-
year timeframe of the MFF) and € 5,4 Bn in the second 2021-2030 period (the following 
MFF, plus an additional 3 years). 

Seen in terms of the average annual budget, the Copernicus funding envelope (€ 541 M for 
2014-2020; € 541 M for 2021-2030; €541 M average overall) falls between Options B (€ 362 
M  overall  annual  average)  and  C  (€  730  M)  of  the  Booz  CBA  The  benefits  are  therefore 
calculated based on enhancement of Option B, but not reaching the level of Option C. In the 
like-for-like  analysis,  the  proposed  funding  envelope  is  referred  to  as  Option  X.  The 
associated  impact  on  the  downstream  market  and  employment  has  been  modelled  as  a 
proportional decrease based on the funding deficit. 

The scenario analysis establishes three scenarios, varying the breakdown amongst the Space, 
In Situ and Services cost areas. The three cost budget distribution scenarios are shown below. 

I - Service Delivery Pull 

II - Intermediate 

III - Technology Driven 

Total 

Space 

In Situ  Services 

Space 

In Situ 

Services  Space 

In Situ  Services 

€ Mio 

TOTAL 
(2014-
2030) 

€ Mio 

400 

22 

119 

422 

22 

97 

438 

22 

81 

541 

% 

74% 

4% 

22% 

78% 

4% 

18% 

81% 

4% 

15% 

Table 8: Cost Distribution By Scenario (Annual Averages in the 2014-2030 period)  

The  analysis  ranks  Scenario  I,  “Service  Delivery  Pull”,  as  the  option  with  the  most  benefit 
potential.  The  cumulative  benefits,  downstream  impacts  and  associated  Benefit-to-Cost 
Ratios are shown in the table below. 

I - Service Delivery 
Pull 

II -Intermediate 

III - Technology 
Driven 

2 

Referred  to  as  “Booz  CBA”  from  here  on  out.  All  data  in  this  study  are  evaluated  “as  given”; 
responsibility for any errors in the document lies with the original authors.  

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2014-2020 

Cumulative Benefits 

2021-2030 

Cumulative Benefits 

TOTAL  
(2014-2030) 

Cumulative Benefits 

€ Bn 

Downstream Impact in 
2030 

Integrated contribution to 
European GDP 

Integrated BCR 

% 

: 

6,3 

23,0 

29,4 

1,03 

6,1 

22,1 

28,2 

0,98 

5,9 

20,8 

26,7 

0,95 

0,164% 

0,157% 

0,149% 

3,30 

3,17 

3,01 

Table 9: Integrated Impact Simulation By Scenario (Undiscounted) 

The  FeliX  model  (a  system  dynamics  model  and  benefit  simulator,  which  takes  into 
account  the  complex  relationships  between  natural  and  socio-economic  systems) 
forecasts benefits that are in the order of magnitude of € 21.7 Bn cumulatively by 2020 
and € 220 Bn by 2030 (undiscounted), substantially higher (~8 times, in the long term) than 
the ‘static’ benefit projections of the present study. This is due to the enlarged scope of the 
FeliX  model,  and  its  broad  assumptions  of  underlying  infrastructure  (namely  GEOSS3,  to 
which  Copernicus  is  expected  to  constitute  the  EU’s  major  contribution).  The  comparison 
with the FeliX output serves to highlight the strong potential for higher-order magnitudes of 
benefits when Copernicus is viewed as part of a broader system of systems. 

Figure 3: Potential Range of Benefit Scaling Based on FeliX Model 

In compliance with the EC Impact Assessment Guidelines, the benefits of each scenario have 
been  categorised  according  to  their  economic,  environmental,  and  social  dimensions,  both 
qualitatively and quantitatively. A summary of the quantitative analysis is provided below. 

Benefit 
Categories 

Values 

I - Service 
Delivery Pull 

II - Intermediate 

III - Technology 
Driven 

3 

Global Earth Observation System of Systems. 

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Total Space Turnover 
(2014-2030)4 

8.002 

8.306 

8.542 

Economic 

Total Downstream 
Turnover (2030) 

€ Mio

1.034 

Combined Δ Scen. I 

% 

0% 

981 

-2% 

954 

-4% 

Environmental 

Total (2014-2030) 

€ Mio

17.611 

17.005 

16.158 

Δ Scen. I 

% 

0% 

-3% 

-5% 

Total (2014-2030) 

€ Mio

11.585 

11.045 

10.415 

Employment Impact5 
(2030) 

Social 

# 

48.330 

46.650 

45.840 

Δ Scen. I (Benefits) 

% 

0% 

Δ Scen. I 
(Employment) 

% 

0% 

-5% 

-4% 

-10% 

-5% 

Table 10: Summary of Economic, Environmental and Social Benefits (Quantitative) 

Scenario I: Service Delivery Pull  

The  larger  benefits  projection  in  this  scenario  is  due  to  the  increase  in  investment  in 
services, coupled with the serialised deployment of the Space component, conferring the 
necessary 
longevity  and  programme  commitment  for  the  development  of  the 
downstream sector. 

Overall,  this  scenario  represents  an  interesting  mix  of  investments.  It  capitalises  on  the 
marginally  increased  investment  in  Services  against  a  “legacy”  level  of  Space  component 
investment. The programme’s continuity is assured until 2030. The level of funding for the 
Space  component  should  include  some  allowance  for  preparatory  activities  leading  into 
developing  the  next  generation  of  Sentinels.  It  is  assumed  also  that  ESA  will  continue  to 
fund,  to  a  large  extent,  all  the  preparation  and  pre-development  activities  for  the  future 
generation satellites, plus the development of the prototype units. 

The impact of funding services at this level leads to a higher, relative level of benefits, given 
the  strong  coupling  between  services  and  benefits.  The  impact  should  be  ensured  by  an 
appropriate  expansion  of  the  Copernicus  services,  by  ensuring  access  from  everywhere  in 
Europe to the services and data, by enforcing adequate standards for products, by supporting 
the expansion of the downstream sector and sustaining the user community in the access to 
and adoption of new products, services. 

Scenario II: Intermediate 

This scenario represents less of an increase in benefits with respect to “Service Delivery 
Pull”, due to the higher spending in Space at the expense of Services. The objectives and 

4 

5 

This  figure  includes  the  indirect  effects  of  the  Space  industry  on  the  wider  economy,  which  is 
€163Mio, €152Mio and €152Mio for the three scenarios, respectively. 
Refers to total direct and indirect new and maintained jobs associated with Copernicus. 

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46 

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extent of the investment in Services remain substantially the same as in the previous scenario, 
only to a slightly lesser degree. 

The Space component has additional margin for preparing the next generation, but part of this 
extra  should  be  dedicated  to  ensuring  wider  circulation  of  data  to  different  user  categories 
(science,  commercial,  downstream,  regional,  etc.).  This  amount  does  not  allow  a  change  in 
philosophy from the serial deployment of Sentinels. As in the previous one, it relies heavily 
on the Contributing Missions. 

Scenario III: Technology Driven  

This scenario presents a significant drop in overall benefits with respect to the previous 
ones,  as  the  transfer  of  funding  from  the  Services  to  the  Space  component  does  not 
compensate  for  the  loss  in  benefits.  This  scenario  does  not  offer  many  reasons  to  be 
recommended. It poses questions about the use of the extra funding for Space (for example, 
starting a different family of Sentinels, or adding C units) and does not sufficiently encourage 
the expansion of services and their availability to a much wider user community. 

All projected benefits in this analysis are contingent on the implementation of a set of 
enabling  factors,  including  regulatory  and  market  development  actions,  summarised 
below 

Enabling Factors 

•  Continuity of Sentinel data  
•  Research and development for the next generation of Sentinels 
•  Continuity of current arrangements for sharing of responsibilities between 

ESA and EU, in particular concerning the preparation of the next 
generation developments 

•  Continuity of access to contributing missions (primarily European, but not 

Space 

exclusively) 

•  Simplified access to Sentinel data for widespread distribution 
•  Development of international cooperation in order to complement 

Contributing Missions 

•  Accessibility to services / products  
•  Supporting the operations and evolution of the Copernicus services, in their 

transition to operations  

•  Enlarging the range of the Copernicus services 
•  Service development and evolution 
•  Enabling of downstream sector 
•  Demand incubation at regional and local levels aimed at commercial users 
•  Continued promotional and communications efforts 
•  Continued, coherent action to federate, consolidate and update user needs 

and requirements 

Services 

In Situ 

On-going  coordination  and  harmonisation  efforts  in  complement  to  the 
subsidiarity principle 

Regulatory 

•  Free and open data policy 
•  Governance, assurance of data and service continuity 
•  Quality assurance and standards-building 

Table 11: Enabling Factors 

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2. INTRODUCTION AND OBJECTIVES 

The budget for the next Multi-Annual Financial Framework (MFF, 2014-2020) was decided 
by  the  European  Council  on  the  7th  and  8th  of  February  20136.  The  maximum  level  of 
commitment for the Copernicus programme was set at € 3.786 M. 

The  present  document  aims  to  provide  input  to  the  European  Commission’s  Impact 
Assessment (IA) following the announcement of the new Copernicus funding envelope. This 
Impact  Assessment  is  based  on  Booz  &  Company’s  “Cost-  Benefit  Analysis  for  GMES” 
(CBA) and further study and analysis performed by SpaceTec Partners. 

The  Copernicus  budget  for  the  period  2014-2020  represents  a  significant  milestone  in  the 
history of the programme. The programme stands to move definitively past the foundational 
R&D basis on which it has been established and transition into a genuine, operational system. 
This budget represents a somewhat unique opportunity to make Copernicus operational, and 
the  realisation  of  this  opportunity  is  hinged  on  the  question  of  how  to  best  deploy  the 
relatively scarce resources available, for the benefit of the EU taxpayer. 

The objective of the Impact Assessment is not to support a decision on the funding level, but 
rather how the given budget should best be deployed amongst the three key programme cost 
areas: Space, In Situ and Services. 

Since the Booz CBA was published, additional studies have been performed on the impacts 
of  the  Copernicus  programme,  particularly  with  regard  to  the  downstream  sector.  These 
projections need to be taken into account in the Impact Assessment. 

The present study has the following main objectives: 

Given the funding envelope for Copernicus within the next MFF, evaluate the programme 
benefits on a like-for-like basis as a function of the options defined in the Booz CBA 

Integrate the results of 2012 study on the future potential Copernicus downstream market, 
performed by SpaceTec Partners, into this analysis 

Perform a sensitivity analysis of projected benefits based on different scenarios/allocations 
of funding amongst the three major programme cost areas, Space, In Situ and Services 

In the chapters, which follow, these objectives will be dealt with in turn. 

3. METHODOLOGY AND INTEGRATION OF IMPACTS 

This  chapter  firstly  introduces  the  methodologies  used  in  the  present  analysis,  and  in  the 
studies which served as key input material. The key studies are the Booz & Co. “Cost Benefit 
Analysis  for  GMES”,  and  the  2012  European  Earth  Observation  (EO)  and  GMES 
Downstream  Services  Market  Study  by  SpaceTec  Partners.  The  FeliX  System  Dynamics 
Model  is  introduced,  and  its  application  to  the  present  analysis  discussed.  Thereafter,  the 
approach to the integration of the study inputs in the present analysis is outlined, concluding 
with a section on the enabling factors, which underpin the conclusions of the analysis.  

3.1 Booz and Co. Cost Benefit Analysis 

This chapter reports the main methodological aspects and approach of the Booz CBA. Booz 
&  Company  was  commissioned  by  the  European  Commission  to  undertake  a  Cost-Benefit 
Analysis  (CBA)  of  the  Copernicus  programme.  The  main  focus  of  this  study  is  the 
assessment  of  four  broad  funding  options  for  Copernicus  and  its  operational  services.  In 
carrying out this exercise, it is important to bear in mind that Copernicus represents a unique 

6 

The budget is, at the time of writing, yet to be finally approved by the European Parliament. 

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48 

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public  investment  programme  which  is  designed  to  support  a  wide  array  of  public  policy 
objectives.  Copernicus  is  Europe’s  contribution  to  the  Global  Earth  Observation  System  of 
Systems  (GEOSS),  a  multi-lateral  initiative  of  States  and  the  international  scientific 
community involved in EO and climate research. 

As Copernicus is a major EU effort to enhance our understanding of Earth science, a major 
benefit of Copernicus will be the Value Of Information it provides to support policy action 
and resource management across the EU and further afield. The Value of Information (VOI) 
depends on a number of factors regarding the circumstances of decision makers, including the 
level of uncertainty that they face, what is at stake, the cost of using information, and the cost 
of the next-best information substitute. A review of academic literature supports the view that 
there is inherent value in information. Based on this review, there are valid reasons to suggest 
that the overall extent of the VOI is incremental. These include the ability of Copernicus to 
provide  additional  information  that  may  assist  decision  making  and  add  to  analysis 
incrementally, rather than provide a transformational difference to a particular sector. These 
incremental benefits accrue over time as extended time series of observations are available, 
particularly for strategically important fields such as climate change. As such, Copernicus has 
the potential to deliver significant economic value through enhanced EO information. 

The quantified cost-benefit assessment requires the identification and calculation of benefits 
arising from Copernicus. These benefits almost exclusively arise from Copernicus being an 
enabler  of  better  policy  responses  to  key  public  policy  issues.  In  order  to  establish  these 
benefits (and how Copernicus may reduce various costs), a literature review of the economic 
value  of  information,  combined  with  interviews  and  desktop  research,  enabled  the 
development of assumptions around the incremental benefit from better EO information. 

The  benefit  areas  considered  in  the  Booz  CBA  study  have  environmental,  economic  and 
social impacts. They are reported in the table below along with the policy sector and service 
area which they refer. 

Policy Sector 

Service Area 

Main Applications 

Global Climate Change Action 

Climate 

Climate Change Mitigation & Adaptation 

Resource Management 

Atmosphere 

European Air Quality 

Land 

Land 

Marine 

Marine 

Marine 

Land 

Land 

Emergency Response (Europe) 

Emergency 

Emergency 

Emergency 

Emergency 

European Deforestation (Forest Fires) 

Global Desertification 
Unlawful Oil Discharge in Sea Vessel 
Operations 
Major Accidental Oil Spills 

Maritime Navigation  

EU CAP Monitoring 

Regional Policy (Urban Development) 

Europe - Geohazards (Earthquakes) 

Europe – Flooding 

Europe - Forest Fires 

Europe – Other, including storms and landslides 

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49 

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Emergency 

European Natural Disaster Reconstruction 
Support (EU Solidarity Fund) 

Global Humanitarian Aid 

Emergency 
Security / Emergency 
Emergency 

Natural Hazards - Rest of World 
Humanitarian Aid in Conflict Situations 
EU Humanitarian Aid 

Other 

All 

Wider Economic7 

Table 12: Key Benefit Areas for the Cost-Benefit Analysis (Booz CBA) 

Four options were provided for analysis under the cost-benefit assessment:  

Option  A:  Baseline  Option  with  no  on-going  commitment  to  replace  infrastructure  or 
investing significantly in services;  

Option  B:  Baseline  Option  Extended,  but  still  with  no  on-going  commitment  to  replace 
infrastructure over the longer term and invest significantly in services;  

Option C: Partial Continuity, with commitment to provide Sentinel infrastructure and invest 
considerably  in  services,  with  limited  support  to  ensuring  continuity  of  data  from 
Contributing Missions; and  

Option D: Full Continuity with commitment to provide Sentinel infrastructure and enhanced 
support for the continuity of data from Contributing Mission with full investment in services. 

Each  option  contains  profiles  of  investment  in  infrastructure  (Space,  In  Situ),  Services  and 
user  take-up.  The  quantification  of  benefits  is  based  on  an  approach  that  attributes  to 
Copernicus an incremental improvement in outcomes, e.g. measured as a change in baseline 
environmental  damage  costs.  This  recognises  that  the  attainment  of  particular  outcomes  in 
each benefit area is a result of multiple factors, of which the contribution by Copernicus is 
only  one  part.  The  extent  of  Copernicus  contribution  has  been  taken  into  account  in  the 
analysis for each benefit area. 

Key  results  for  each  of  the  four  options  are  presented  in  the  table  below.  The  table  shows 
total benefits, total programme costs and the associated net benefits over the 2014 – 2020 and 
2021-2030  time  periods.  Results  are  cumulative  undiscounted  and  discounted  at  4%  per 
annum. All values are expressed with 2010 as the base year. 

Option A 

Option B 

Option C 

Option D 

P1 

P2 

T 

P1 

P2 

T 

P1 

P2 

T 

P1 

P2 

T 

Cumulative, Undiscounted, € Bn 

Benefits 

2,0 

0,9 

3,0 

6,0  11.0  17.0  13.0  36.6  49.6  18.0  53.0  71.0 

Costs 

2,1 

1,0 

3,0 

3,7 

3.4 

7.0 

5.0 

9.9 

14.8 

6.4 

12.4  18.8 

Net Benefits 

0,0 

0,0 

0,1 

2,4 

7.6 

10.0 

8.0 

26.7  34.7  11.6  40.7  52.3 

7 

The  wider  economic  impacts  include  the  economic  activities  of  industries  that  support  the  upstream 
Space  sector  through  the  provision  of  material  and  labour  inputs,  activities  of  the  housing  and  retail 
sector  linked  to  expenditure  by  the  Space  sector,  and  the  wider  economic  benefits  associated  with 
economic spillovers that are linked to the R&D aspects of the Space sector. 

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Cumulative, Discounted, € Bn 

Benefits 

1,5 

0,6 

2,1 

4,5 

6.2 

10.7 

9.5 

19.9  29.4  13.2  28.8  42.0 

Costs 

1,6 

0,6 

2,1 

2,8 

1.9 

4.7 

3.7 

5.4 

9.1 

4.8 

6.7 

11.5 

Net Benefits 

0,0 

0,0 

0,0 

1,7 

4.3 

6.0 

5.9 

14.5  20.4 

8.4 

22.1  30.5 

BCR 

1 

2,3 

3,2 

3,7 

Table 13: Results of Cost Benefit Analysis (Booz CBA. P1: 2014-2020; P2: 2021-2030, T: 
Total) 

The  methodology  adopted  in  the  Booz  CBA  is  based  on  a  Copernicus  “full  continuity” 
scenario  (referred  to  as  Option  D),  which  is  used  as  a  reference  case,  and  then  applying 
progressive degradation to each of the other options in relation to this scenario. The scaling 
parameters applied to the other options are listed in the following table. Meaning that in the 
Booz Model the cost to benefit discount ratio is (1:1,3). 

Cost Reduction on 
"undiscounted" Values 

Resulting Benefit 
Fulfilment 

Resulting benefit discount 

Ratio benefit/cost discount 

2014-2020  2021-2030  2014-2020 2021-2030 2014-2020 2021-2030 

Option A 

-67% 

-92% 

11% 

2% 

-89% 

-98% 

Option B 

-43% 

-73% 

34% 

21% 

-66% 

-79% 

Option C 

-22% 

-20% 

72% 

69% 

-28% 

-31% 

Option D 

0% 

0% 

100% 

100% 

0% 

0% 

2014-
2020 

2021-
2030

Total 
average 

1,3 

1,3 

1,6 

1,3 

1,1 

1,1 

1,6 

Table 14: Cumulative Cost and Benefit Scaling Parameters Across Booz CBA Options 

This  “progressive  degradation”  principle  will  be  applied  in  the  present  analysis  to 
establish the baseline for analysing the changes in the allocation of funding amongst the 
different  main  cost  areas,  and  the  like-for-like  estimation  of  benefits,  subject  to  the 
understanding  that  there  are  limits  to  the  validity  of  this  principle,  such  as  minimum  and 
upper thresholds on benefit realisation. 

3.2 SpaceTec Partners Downstream Study 

The principle goal of this study was an assessment of the value of the potential downstream 
market  for  Earth  Observation  (EO)  Value-Added  Services  (VAS)  arising  as  a  result  of  the 
provision of data and services from the Copernicus programme. 

The study was based on a high-level assessment of market potential across relevant sectors of 
economic  activity,  such  as  insurance,  water  transport,  agriculture,  extraction  of  oil  and  gas 
and the production of electricity. Using a combination of case-based bottom-up analysis and 
top-down  industry  assessments,  the  study  sought  to  project  the  future  markets  for 
downstream  services  over  a  broad  time  horizon  (2015-2030).  The  study  also  included  an 
analysis  of  the  impact  on  direct  and  indirect  employment  in  the  downstream,  upstream  and 
midstream sectors. 

3.2.1 Downstream Impact 

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The  expected  continued  availability  of  Copernicus  data  is  essential  for  the  purposes  of 
downstream market development. This applies both to the immediate implications during the 
next MFF and – crucially – to the longer-term 15-year timeframe8. The forecast scenarios in 
the STP EO and Copernicus downstream market study depend on the assumption of full data 
continuity,  underscored  by  an  average  yearly  budget  of  €  800  M  in  the  high  scenario. 
Therefore, any funding option which threatens full data continuity will generate a less 
favourable impact on the downstream market. 

In addition, the downstream market development is linked to the development of the Services 
component.  Without  active  and  continuous  provision  of  Copernicus  service,  the  market  for 
downstream  services  is  unlikely  to  evolve  beyond  the  relatively  limited  boundaries  of  the 
services  funded  under  FP7.  The  correlation  between  the  Services  component  and  the 
downstream market is reflected in the modelling undertaken for the purposes of this analysis. 

In the STP downstream study, long-term market potential was assessed through the concept 
of  the  Total  Addressable  Market  (TAM).  This  concept  expresses  hypothesised  market 
penetration, under specific assumptions and within certain limitations. It serves as a metric of 
the  underlying  revenue  potential  of  a  given  opportunity  -  in  this  case,  downstream  market 
turnover - and should be treated as a “bounded theoretical maximum”. The three downstream 
turnover  scenarios  presented  in  the  STP  downstream  study  are  summarised  below,  for 
reference. 

€ Bn 

3,0 

2,5 

2,0 

1,5 

1,0 

0,5 

0,0 

EO/Copernicus Commercial DS Market Potential*  
(Yearly Turnover Projection by Scenario**, € Billion)  

2,6 

1,8 

1,0 

High 

Medium 

Low 

2015  2016  2017  2018  2019  2020  2021  2022  2023  2024  2025  2026  2027  2028  2029  2030 

(*): Assuming GMES full data continuity funding scenario;; (**): High= 100% of market potential fulfillment, Medium= 75% and Low 40% 
Sources: Euroconsult, Eurostat, STP Analysis 

Figure 4: Downstream Market Scenarios, STP Downstream Study 

The foreseen € 3,8 Bn envelope for Copernicus translates into an annual budget of € 541 Mio 
in 2014-2020. This has the following implications for the assessment of impact on the future 
downstream market: 

The closest corresponding budget scenario is the “STP Low” case, against which the annual 
average budget for the entire period represents a -14,1% reduction. 

It is assumed that the same € 541 M (or a higher) annual budget level will be committed in 
the 2021-2030 period to assure programme continuity in the longer term.  

8 

Along which the Booz CBA also extends. 

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3.2.2 Impact on Employment 

The  approach  utilises  a  methodology  based  on  the  relationship  between  industry  labour 
productivity and projections of: 

EO/Copernicus downstream turnover (for the downstream);  
Copernicus funding in the Space component (for upstream and midstream).  

Labour productivity represents a measure of the relationship between “a volume measure of 
input to a volume measure of output” (OECD, 2002). It is calculated by proxy, as the quotient 
of industry turnover and the total number of employees, or FTEs (Full-Time Equivalents) in 
the  sector.  Dividing  the  cost  or  turnover  inputs  by  the  labour  productivity  for  each  sector 
serves  as  a  proxy  of  the  number  of  jobs  created  or  maintained  in  each  case.  Labour 
productivity  is  assumed  to  be  approximately  €  179,000  in  the  upstream  and  midstream 
sectors, and € 113,000 in the downstream. The key data used in the employment analysis are 
summarised in the table below: 

Input  

Data Type 

Labour productivity 

Description 

€ / Employee 

Upstream 

Space component - Satellites only  

Programme 
budget forecast 

Midstream 

Space component - Contributing 
Missions and Services component 

Programme 
budget forecast 

179.000 

179.000 

Downstream 

Downstream services Total 
Addressable Market (TAM) 

Turnover forecast 

113.000 

Table 15: Key Inputs for Employment Analysis 

The remainder of this section provides the background to the methodology used in the STP 
downstream study, for reference and as a baseline input to the core analysis in the chapters 
which follow. In the context of this analysis: 

Direct  employment  refers  to  persons  employed  by  an  organisation  operating  in  the  Space 
industry (upstream, midstream or downstream); 

Indirect  employment  refers  to  persons  employed  in  other  industries  which  are  impacted  by 
the  Space  industry,  either  because  they  form  part  of  the  Space  industry  supply  chain,  or 
because the industry supplies other goods and services (such as retail or financial services). In 
both cases, these industries benefit from increased employment in the Space sector. 
The STP study introduced three cost scenarios9 representing different levels of Copernicus-
related  funding  in  the  upstream  and  midstream  sectors.  The  scenarios  correspond  to 
variations of the “Copernicus data continuity” options outlined in the Booz CBA (Options C 
and D), and are summarised below. 

Cost Scenario 

Upstream  Midstream Total 

In Situ 

Grand 
Total 

9 

These are referred to as STP High, STP Medium and STP Low, and should not be conflated either with 
the Booz CBA Options A-D, nor the Scenarios I-III outlined in this document 

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STP High  

(as Booz Option D) 

STP Medium 

(as Option D excluding Jason Mission) 

STP Low  

(as Option C) 

535 

215 

750 

50 

800 

487 

198 

685 

50 

735 

424 

176 

600 

30 

630 

Total 

1.446 

589 

2.035 

130 

2.165 

Table 16: Copernicus Programme Cost Scenarios 2014-2020, STP Downstream Study (€ M, 
Annual Averages) 

The  resulting  employment  scenarios  from  the  STP  downstream  study  are  presented  below. 
Any  decrease  of  the  programme  funding  scenario  would  reduce  the  associated  impact 
on employment. 

Upstream  Midstream  Downstream 

Total 

Direct 

3.500 

STP High 

Indirect 

9.100 

STP 
Medium  

Total 

12.600 

Direct 

3.300 

Indirect 

8.580 

Total 

11.880 

Direct 

2.900 

STP Low 

Indirect 

7.540 

Total 

10.440 

1.300 

3.380 

4.680 

1.200 

3120 

4.320 

1.100 

2.860 

3.960 

23.000 

27.800 

73.600 

86.080 

96.600 

113.880 

16.000 

20.500 

51.200 

62.900 

67.200 

83.400 

9.000 

13.000 

28.800 

39.200 

37.800 

52.200 

Table  17:  Aggregated  (Direct  and  Indirect)  Downstream  Employment  Scenarios,  STP 
Downstream Study (Number of Employees, 2030) 

It  is  important  to  point  out  that  these  figures  do  not  necessarily  represent  new  employment 
positions, although a large proportion will indeed be new, particularly in the downstream and 
midstream  sectors.  The  numbers  also  indicate  other  cases  of  employment  impact,  such  as 
jobs,  which  are  maintained  by  the  inflow  of  funding,  or  the  expansion  in  scope  of  existing 
roles. 

In  the  calculation  of  the  downstream  employment,  the  budget  change  between  the  two 
periods  is  not  modelled,  since  the  average  across  both  is  used  to  establish  the  turnover 
baseline.  For  upstream  and  midstream,  the  drop  is  evident  in  the  funding  between  the  two 
periods,  but  to  avoid  inconsistencies,  in  the  analysis  the  combined  average  between  the 
periods  is  taken  as  an  order-of-magnitude  measure  of  the  employment  impact  across  the 

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timeframe. Therefore, when employment impact is reported, this is not done per period, but 
only as a total over the entire timeframe. 

3.2.3 Scaling of Benefits 

The Booz CBA regards each of its options “as being discrete” (Booz CBA, p. 99), meaning 
that  the  benefits  do  not  grow  linearly  in  relation  to  the  level  of  investment,  but  are  the 
outcome of different configurations of the Space, Service and In Situ components within the 
options.  In  other  words,  a  step  function  is  at  work,  with  threshold  boundaries  separating 
unconnected plateaux of benefit escalation. 

This is particularly true in the case of the Space component; since the Sentinels are deployed 
in  units,  there  are  limits  as  to  what  can  be  achieved  with  specific  levels  of  funding.  Minor 
deviations around these step changes do not serve to alter the benefit profile in a significant 
way.  Whilst  this  proposition  is  not  readily  observable  in  the  Booz  CBA  because  of  the 
proportionally  large  gap  between  the  funding  levels  of  each  option,  it  is  recognised  that  in 
each case, a step change in commitment (and hence, benefits) has taken place. 

The extent to which benefits scale is, therefore, assumed to differ in relation to the level of 
funding  allocated  to  the  Space  and  Service  components,  in  particular.  The  following 
assumptions underpin the present analysis as regards the scaling of benefits: 

Investment  in  the  Space  component  is  a  necessary,  but  insufficient  condition  for  the 
realisation of benefits.  

In order for benefits to arise, parallel investments must be made in Services and In Situ.  

A  step  change  in  benefits  occurs  once  investment  in  Space  reaches  a  certain  threshold. 
Beyond this threshold: 

Additional investment in Space does not bring about linear increases in benefits 

Step-changes in benefits are contingent on additional investment in Services. 

Benefits  linked  to  investments  in  services  are  more  linear,  with  incremental  benefits 
possible  through  service  improvement,  extension  to  scope,  and  the  development  of  new 
services. These nonetheless remain dependent on upgrades or enhancements to the underlying 
Space infrastructure for larger step changes, accompanied by more major service-supporting 
developments  such  as  improved  access  to  data  and  the  enabling  of  the  downstream  sector. 
These considerations are elaborated in Section 0, "3.5 Enabling Factors. 

The figure below is a simplified representation of the relationships described above. It serves 
to  conceptually  highlight  the  key  points  of  reference  for  the  modelling  exercise  in  the 
analysis. 

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Benefits (€ M)  

Step Function Linking Benefits to Funding 
in the Space Segment at Constant Services Costs 

Conceptual 

~ € 300 M 

~ € 500 M 

Step Function Linking Benefits to Funding 
in the Services Segment at Constant Space Costs 

Benefits (€ M)  

combined exponential 

Services Budget (€ M)  

funding 
services 

80 

100 

120 

140 

160 

180 

200 

220 

240 

6 

5 

4 

3 

2 

1 

0 

Figure  5:  Conceptual  Relationships  of  Benefit  Scaling  Based  on  Investments  in  Space  and 
Services 

Evidently, the In Situ component also plays a role in the scaling of benefits. It is not shown 
here, in the interests of parsimony, and because the Space-Services relationship is considered 
to have the most impact on the present analysis.  

3.3 FeliX System Dynamics Model 
The EuroGEOSS FeliX10 model is a systems dynamics model developed in order to represent 
conceptually the interrelationships between environmental, economic and social subsystems. 
It provides a modelled example of how EO data can influence future development based on 
government  policy  decisions  and  human  behaviour.  The  FeliX  model  has  been  used  to 
illustrate  a  potential  maximum-benefit  scenario  through  investment  in  a  comprehensive  EO 
system at European in order to augment Member States’ EO networks. 

It  is  important  to  recognise  that  FeliX  has  not  been  used  to  model  specific  Copernicus 
scenarios, and it is difficult to identify the extent to which Copernicus services are reflected 
in the underlying model structure and assumptions, and the likely added value of Copernicus 
over and above other available EO systems. Copernicus represents the EC’s contribution to 
GEOSS.  Benefits  projected  by  the  FeliX  model  may  therefore  be  seen  as  a  way  of 
demonstrating the value of a comprehensive GEOSS architecture. 

10 

Full of Economic-Environment Linkages and Integration dX/dt. 

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Figure 6: EuroGEOSS FeliX Benefits (2014-2030) 

The FeliX model shows that potential benefits in the order of magnitude of € 220 Bn can 
be  generated  (cumulatively  by  2030,  using  undiscounted  values).  This  is  substantially 
higher  than  the  ‘static’  benefit  projections  of  the  present  study  (by  a  factor  of  7,5  to  8,2  at 
period  end)  due  to  its  enlarged  scope  and  broad  assumptions  of  underlying  infrastructure 
(GEOSS). 

3.4 Integrated Approach 

This  chapter  describes  the  methodological  approach  used  in  the  analysis,  and  establishes  a 
methodology by which the outputs of various input studies can be effectively combined, in 
order to arrive at a synthetic conclusion. The major outputs of the STP downstream study and 
the Booz CBA are summarised below: 

Figure 7: Outputs of Booz CBA and STP Downstream Study 

The STP downstream study is subject to the following key assumptions:  

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Catalytic  effect  of  free  and  open  data  provision11:  Copernicus  services  are  expected  to 
enable  and  stimulate  the  downstream  sector  by  freely  and  openly  providing  access  to  basic 
pre-processed data and modelling outputs, more cheaply than would be the case if companies 
had  to  undertake  such  basic  processing  and  modelling  themselves.  The  business  case  for 
Copernicus is that the services improve the efficiency of the downstream sector, allowing the 
industry to offer better value for money in products and services to end users. 

Full and assured continuity of Copernicus: In order for the potential of future markets for 
Earth Observation downstream services to be realised, the continued long-term availability of 
Copernicus  data  services  is  assumed.  The  investment  incentives  are  crucially  tied  to  both 
political  and  financial  commitments  at  an  institutional  level.  This  continuity  of  services 
presupposes  the  continuity  and  evolution  of  Copernicus  infrastructure  providing  the 
necessary data. Without continuity, the "raison d'être" of Copernicus is put into question, as 
users will only rely on Copernicus if a sustained flow of data is ensured. Without appropriate 
funding, existing services will cease their activities.  

Therefore,  a  Copernicus  funding  envelope,  which  is  not  able  to  assure  full  data 
continuity will impact the fulfilment of the downstream market potential. Furthermore, a 
set of enabling factors has been identified, on which action and associated investments are 
considered necessary for the realisation of downstream market potential. Certain institutional 
conditions are necessary to enable and accelerate the market dynamics foreseen in this study, 
linked, inter alia, to market development and capacity building. They are summarised below: 

Regulation:  Free and open data policy; assurance of data  continuity; quality assurance and 
standards-building. 

Data Availability and Access: Simplified access to Copernicus Sentinel datasets at ready-to-
use processing levels (L1)12 for high-volume distribution, thereby responding to the needs of 
the value-adding industry, ideally avoiding the duplication of efforts at national level.  

Demand/Market:  Continued  dissemination  efforts;  regional/local  demand  incubation  and 
communication schemes aimed at commercial users; federation / consolidation of user needs 
and  industry  requirements;  further  integration  of  EO  information  as  a  supplement  to 
traditional systems.  

The  figure  below  shows  the  potential  impacts  from  investments  in  Space  programmes, 
comparing  the  outputs  of  the  Booz  CBA  and  the  STP  downstream  analysis.  The  notion  of 
“enduring  impacts”,  distinguished  from  “temporary  impacts”,  refers  to  causal  implications 
beyond  the  development  phase  of  a  programme.  The  impact  categories  are  drawn  from  the 
model presented in OECD (2011). 

11 
12 

This refers to data derived from the Copernicus family of dedicated satellites, the Sentinels  
L1 includes geometric and radiometric pre-processing. 

EN 

58 

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Figure 8: Relative Contribution of Studies Towards Assessment of Enduring Impacts 

The  economic  impacts  and  the  benefits  as  defined  in  the  Booz  CBA  should  be  regarded  as 
separate, but parallel measures of potential causal effects, each with a different and distinct 
methodology,  scope  and  interpretation.  It  should  follow  that  there  is  no  possibility  to 
establish  overlaps  between  the  two  types  of  measurement.  This  makes  it  logically 
inconsistent to simply add them together. 

There  is,  however,  a  potential  approach,  which  may  allow  the  production  of  an  integrated 
picture. The approach is based on establishing the impact of both benefits and impacts on EU 
Gross  Domestic  Product  (GDP)  and  the  integrated  impact  on  employment  (excluding  any 
double-counting), allowing the comparison of like with like. 

In  order  to  be  fully  compliant  with  the  EC  Impact  Assessment  Guidelines,  the  derived 
integrated  impacts  have  been  associated  with  economic,  environmental  and  social 
dimensions. The approach is visualised below:  

Benefits: x * 1% 

% of EU GDP 

Booz CBA 

Economic impacts: y * z  

% of EU GDP 

Employment: y / s  

Only Upstream 

STP Downstream 
Market  Analysis 

Potential markets: p * f 

% of EU GDP 

Employment 

Upstream/Midstream/
Downstream 

Source: Booz & Co. 2011, STP Analysis 

Figure 9: Potential Integrated Impacts Approach 

Integrated GDP 
impact 

Integrated impact 
on employment 

Economic 

Environmental 

Social 

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In  this  analysis,  the  approach  to  integrated  benefits  will  incorporate  only  the 
conclusions  from  the  STP  downstream  analysis,  and  exclude  the  impact  on  employment 
presented in the Booz CBA. 

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The benefit categories and associated indicators used to evaluate the impact of each scenario 
are presented in the table below. 

Benefit Categories  Quantifiable Indicators

Qualitative Indicators`13 

Economic 

•  Space industry 

turnover  

•  Downstream sector 

turnover 

•  Wider economy 

impact 

Environmental 

•  Global climate 

change mitigation & 
adaptation 

•  European air quality  
•  European 

deforestation 

•  Global desertification
•  Oil spills 

Social 

•  Maritime navigation 
•  EU CAP Monitoring 
•  Urban development 
•  Emergency response 
•  Global humanitarian 

aid 

•  Employment impact 

•  Functioning of the internal market and competition 
•  Competitiveness, trade and investment flows 
•  Operating costs and conduct of business/Small and 

Medium Enterprises 

•  Administrative burdens on businesses 
•  Public authorities 
•  Property rights 
•  Innovation and research 
•  Consumers and households 
•  Specific regions or sectors 
•  Third countries and international relations 
•  Macroeconomic environment 
•  The climate 
•  Transport and the use of energy 
•  Air quality 
•  Biodiversity, flora, fauna and landscapes 
•  Water quality and resources 
•  Soil quality or resources 
•  Land use 
•  Renewable or non-renewable resources 
•  The environmental consequences of firms and consumers
•  Waste production / generation / recycling 
•  The likelihood or scale of environmental risks 
•  Animal welfare 
•  International environmental impacts 
•  Employment and labour markets 
•  Standards and rights related to job quality 
•  Social inclusion and protection of particular groups 
•  Gender equality, equality treatment and opportunities, 

non -discrimination 

•  Individuals, private and family life, personal data 
•  Governance, participation, good administration, access to 

justice, media and ethics 
•  Public health and safety 
•  Crime, Terrorism and Security 
•  Access to and effects on social protection, health and 

educational systems 

•  Culture 
•  Social impacts in third countries 

Table 18: Economic, Social and Environmental Benefits Description 

3.5 Enabling Factors  

To  conclude  this  chapter,  it  is  necessary  to  elaborate  on  the  precept  underpinning  all 
conclusions  in  this  analysis,  namely  that  all  projected  benefits  are  contingent  on  the 
implementation  of  a  set  of  enabling  factors.  The  enabling  factors  are  summarised  in  the 
following table.  

13 

Simplified  from  questions  taken  from  European  Commission’s  Impact  Assessment  Guidelines, 
SEC(2009) 92 

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Enabling Factors 

•  Continuity of Sentinel data  
•  Research and development for the next generation of Sentinels 
•  Continuity of current arrangements for sharing of responsibilities 
between ESA and EU, in particular concerning the preparation 
of the next generation developments 

•  Continuity of access to contributing missions (primarily 

European, but not exclusively 

•  Simplified access to Sentinel data for widespread distribution 
•  Development of international cooperation in order to 

complement Contributing Missions 
•  Accessibility to services / products  
•  Supporting the operations and evolution of the Copernicus 

services, in their transition to operations  
•  Enlarging the range of the Copernicus services 
•  Service development and evolution 
•  Enabling of downstream sector 
•  Demand incubation at regional and local levels aimed at 

commercial users 

•  Continued promotional and communications efforts 
•  Continued, coherent action to federate, consolidate and update 

user needs and requirements 

•  On-going coordination and harmonisation efforts in complement 

to the subsidiarity principle 

•  Free and open data policy 
•  Governance, assurance of data and service continuity 
•  Quality assurance and standards-building 

Space 

Services 

In Situ 

Regulatory 

Table 19: Enabling Factors 

If  the  enabling  factors  are  not  in  place,  the  benefits  are  not  expected  to  materialise  to  the 
projected  levels.  An  indicative  and  conceptual  analysis  of  the  extent  to  which  the  enabling 
factors are linked to the fulfilment of benefits is supplied below.  

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Enabling Factors 

Basic  

Continuity of data 

•  No guarantees of data continuity 

Accessibility to services / 
products  

•  Services as they are today 
•  Service products accessed through 

disparate websites 
Commercial access to products not 
catered for  

•  No unified perception of Copernicus 

Level of Fulfilment 

Medium  

High  

•  Data continuity assurances in the medium term, up to the 

•  Fully assured data continuity in the long term 

end of the “serialised” Sentinel schedule (2025) 

•  Service accessibility by commercial service providers 

becomes viable 

• 

Copernicus 

services are presented under a common visual identity 

Service development and 
evolution  

•  No clear roadmap for new services  
Climate change: a slow starter, or a 
bad example? 

•  No perspective for users 

•  Expanding the range of products of services 
•  Enlarging the range of services 

Limited set of standards for services 

• 

Initial action in the downstream sector: support to 
development outside R/D budgets 

•  Limited funding for downstream services targeting public 

needs 

•  Attention and support to services targeting regional ad hoc 

requirements 

•  Minimal funding of DS sector through 

R&D (FP7) 
No overarching market development 
strategy 

• 

The 
piecemeal approach at its worst 

TODAY 

20% 

Enabling of downstream 
sector 

Indicative Downstream 
Benefits Scaling 

Within Given Scenario  

Table 20: Indicative Dependency of Benefits on Enabling Factors 

EN 

2014+? 

40% 

63 

(2025+) 
"One-stop shop" for service products 

• 
•  Organised coordinated databases of information 

• 

generated by services 
Interfaces for real-time data streaming when 
required 

•  Availability of Software Development Kits 
(SDK) for programmatic data retrieval  
•  Roadmap for continuous improvement and 

innovation of services: for the first time a long 
term plan appears in this sector of industry 
•  EU actors have access to substantial databases 
(climate, environment, agriculture, disasters 
and emergencies, monitoring of European 
waters etc.) obeying coherent standards and 
easily applicable to local and regional situations 

•  Europe-wide product standards 

•  Broad support to downstream services, for 

public and commercial needs: expanding the 
information society and advancing Europe to 
the same level as the most advanced competing 
countries 

80% 

EN 

 
  
 
 
 
 
 
 
Given  that  the  benefits  are  clearly  mainly  driven  by  the  investment  in  services,  there  are  some 
additional  enabling  factors  which  should  be  considered  as  multipliers,  or  at  least  as  necessary 
conditions for such benefits to materialise. 

These factors concern essentially the availability and accessibility to a wider public of: 

Data from the Sentinel satellites, and  

Products and information generated by the services. 

This obviously derives from the fact that a wider user base is more likely to generate ideas and new 
services, because of the well-known mechanism in Earth Observation that allows science and research 
results to move smoothly into operational applications and services61.  

Investment  in  data  and  products  accessibility,  coupled  with  an  enlargement  in  scope,  number  and 
quality  of  the  initial  Copernicus  services,  accompanied  by  continuous  support  to  the  downstream 
industry, may indeed act as a real multiplier of benefits, both in the preservation and creation of 
jobs and in overall economic value. 

The  costs  of  this  wider  availability  should  be  borne  by  the  Space  component  and  the  service 
component.  The  current  assumptions  about  the  allocation  of  funding  to  the  three  components  are 
certainly compatible with this suggestion. 

The areas to be addressed are, in more detail: 

Making Sentinel data accessible for the scientific community 

Making Sentinel data available for European SMEs involved in value-adding activities 

Making  products  and  information  generated  by  the  Copernicus  services  accessible  to  value-adding 
industry 

Ensuring the evolution of current Copernicus services: wider scope, additional products 

Favouring the addition of new Copernicus services 

Supporting the development of downstream services of European interest 

Creating an adequate distribution network in support of the above points 

Developing  the  capability  to  follow  and  assess  the  development  of  services:  the  quality  of  their 
products,  the  degree  of  adoption  by  user  organisations,  and  their  impact  in  terms  of  socio-economic 
benefits. 

Preparatory work on these areas should lead to a 'service implementation plan', as a set of guidelines.  

61 

The involvement of scientists in, for example, operational meteorological services, has historically been deep, and 
determinant in both their success and their ubiquity.  

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4. LIKE-FOR-LIKE COST-BENEFIT ANALYSIS 

In this chapter, the Copernicus benefits associated with the new MFF funding level for the 2014-2020 
period  are  evaluated  on  the  basis  of  a  “like-for-like”  comparison  with  the  options  presented  in  the 
Booz CBA. “Option X”, the reference scenario for the like-for-like analysis, is defined as follows: 

Option X 

2014-2020 

2021-2030 

Annual Average 

Space 

In Situ  

Services 

% 

79% 

4% 

17% 

Total 

100% 

€ Mio 

427 

22 

92 

541 

% 

79% 

4% 

17% 

100% 

€ Mio 

427 

22 

92 

541 

Table 21: Option X Costs, Budget Distribution and Annual Values 

4.1 Costs and Benefits 

The Copernicus costs reported in the Booz CBA Options are presented below. In the Booz CBA, costs 
are  increased  year  on  year  to  account  for  price  escalation  in  line  with  real  GDP  growth  (~2%  per 
annum) and subsequently discounted to reflect the time value of money (4% per annum). 

2014-2020 

2021-2030 

TOTAL 

Uninflated 

Inflated 

Uninflated 

Inflated 

Uninflated 

Inflated 

Cumulative, Undiscounted, € Mio 

Option A 

Option B 

Option X 

Option C 

Option D 

1.925 

3.430 

3.786 

4.620 

5.950 

% Δ X to B 

10,4% 

2.054 

3.669 

4.025 

4.969 

6.384 

9,7% 

809 

2.723 

5.410 

7.810 

9.790 

961 

3.378 

6.839 

9.869 

2.734 

6.153 

9.196 

3.015 

7.047 

10.864 

12.430 

14.838 

12.372 

15.740 

18.756 

98,7% 

102,4% 

49,5% 

54,1% 

% Δ X to C 

-18,0% 

-19,0% 

-30,7% 

-30,7% 

-26,0% 

-26,8% 

Table 22: Comparison of Costs Across Booz CBA Options and Option X (Cumulative, 2014-2020, € 
M) 

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The Copernicus MFF funding level falls between Options B and C of the Booz CBA. With this as a 
starting  point,  an  estimation  of  benefits  is  presented  based  on  the  following  assumptions,  whilst 
respecting the principles of benefit scaling outlined in the section “Scaling of Benefits” 

Like-for-like  benefits  accrue  in  the  first  period  according  to  a  change  in  the  budget  with  respect  to 
Booz Option B;  
In the second period, because the foreseen budget is considerably higher (in the order of 100%) than 
that of Option B, an alternative method has been used to establish a benefits baseline (both for Option 
X  and  in  the  ensuing  scenario  analysis).In  particular,  the  benefits  baseline  in  the  analysis  has  been 
calculated as follows: for the first period (2014-2020), benefits are assumed to fall in line with those 
projected by Option B in the Booz CBA. In the second period (2021-2030), because the cost base is 
higher in the present analysis than in Option B, a different benefits profile has been assumed. As with 
all  of  the  Options  in  the  Booz  CBA,  this  is  based  on  a  proportional  degradation  of  the  benefits  of 
Option D, relative to the cost difference. Specifically, the benefits of Option D in the second period are 
degraded by 59%, based on a cost difference of 45% and a benefits scaling ratio of 1,3, which is the 
average for each of the cost-benefit relationships across the Booz CBA options. 
The  second  period  benefits  across  the  Booz  options  are  generally  considerably  higher  than  the  first 
period  benefits,  due  to  the  combined  effect  of  longer-term  user  uptake  and  downstream  fertilisation 
activities,  incremental  improvements  to  services,  deeper  integration  with  operational  platforms  and 
potential upgrades and improvements to the space and ground segments. 

The proposed funding level can be expressed as a 10% increase to Option B (comparing uninflated and 
undiscounted figures in each case) in the first period, and a roughly 100% increase in the second. For 
the first period, the like-for-like analysis therefore places the benefits of Option X in the same order of 
magnitude  as  those  described  in  the  Booz  CBA  Option  B.  In  practice  these  are  regarded  as  being 
equivalent  for  the  purpose  of  this  analysis,  assuming  that  the  split  between  the  Space,  In  Situ  and 
Service components follows the proportions of the Booz CBA. 

In the second period, the benefits are higher due to the increased budget, coupled with the assumptions 
about  the  incremental  accrual  of  benefits  expressed  in  the  Booz  CBA,  and  summarised  in  the 
Methodology chapter. The costs and benefits of Option X are summarised in the table below, which 
includes the discounted figures based on the Booz CBA. 

2014-2020 

Option X 

2021-2030 

TOTAL 

Undiscounted 

Discounted 

Undiscounted 

Discounted 

Undiscounted 

Discounted 

6,0 

-3,8 

2,3 

4,8 

-4,0 

0,8 

Cumulative, € Bn 

21,9 

-5,4 

16,5 

12,0 

-6,8 

5,1 

27,9 

-9,2 

18,7 

16,8 

-10,9 

6,0 

1,60 

4,04 

3,04 

Benefits 

Costs 

Net Benefits 

Benefit to 
Cost Ratio 
(BCR) 

Table 23: Option X Costs and Benefits (Cumulative, € Bn) 

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The  Space  component  of  Option  X  is  assumed  to  follow  the  serialisation  strategy  outlined  in  the 
section on “Scaling of BenefitsError! Reference source not found.”. 

4.2 Downstream Impact 

The impact on the downstream market is estimated as a function of the decreased programme budget 
with  respect  to  the  existing  cost  scenarios  outlined  in  the  STP  downstream  study  (see  section  on 
Methodology).  The  closest  corresponding  scenario  is  “STP  Low”  at  €  630  Mio,  against  which  the 
annual average Copernicus budget over the whole period (2014-2030) - namely € 541 Mio - represents 
a decrease of 14,1%. The projected downstream market size under this programme funding scenario is 
€ 0.77 Bn in 2020, and € 0,97 Bn in 2030. 

Figure 10: STP Downstream Market Development Scenarios and Option X 

4.3 Impact on Employment 

The corresponding impact on direct and indirect employment is presented in the following table. 

Option X 

Direct 

Indirect 

Total 

# of jobs created / maintained by 2030 

TOTAL  
(2014-
2030) 

Upstream 

2.170 

5.650 

7.820 

Midstream 

670 

1.750 

2.420 

Downstream 

8.620 

27.590 

36.210 

Total 

11.460 

34.990 

46.450 

Table 24: Direct and Indirect Employment Impact in Option X (Jobs Created or Maintained by 2030) 

In conclusion, the like-for-like analysis of Option X results in the following outcomes:  

Option X 

2014-2020 

Cumulative Benefits 

2021-2030 

Cumulative Benefits 

€ Bn 

6,0 

21,9 

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TOTAL  
(2014-2030) 

Cumulative Benefits 

Downstream Impact in 2030 

27,9 

0,97 

Integrated contribution to European GDP 

% 

0,155%

Integrated BCR  

: 

3,14 

Table 25: Option X, Total Impacts By Area (Undiscounted) 

Option X, overall, represents a positive return on investment, with a Benefit to Cost Ratio (BCR) of 
3,0. The integrated impact, expressed as a percentage of EU GDP, is 0,155%. The aggregate impact on 
direct  and  indirect  employment  by  2030  is  estimated  at  approximately  46,500  (new  or  maintained) 
jobs. 

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5. SCENARIO ANALYSIS 

This  chapter  evaluates  the  sensitivity  of  projected  programme  benefits  to  different  allocations  of 
funding amongst the three major programme cost areas, Space, In Situ and Services.  

5.1 Analysis Background 

In order to provide a baseline for  comparison, the cost  breakdown provided in the Booz CBA study 
serves  as  a  key  initial  input.  The  costs  reported  below  apply  to  the  period  2014-2020  only,  and  are 
expressed in 2010 prices, uninflated and undiscounted. 

Cost Components 

Option A  Option B  Option C  Option D 

Space component 

180 

370 

In Situ component 

Service component 

10 

65 

20 

80 

Total GMES 

255 

470 

Competitiveness  and  Innovation 
Framework Programme (CIP)62 

20 

20 

500 

30 

100 

630 

30 

600 

50 

150 

800 

50 

Total EU 

275 

490 

660 

850 

Table 26: Average Spend per Annum (2014 – 2020, € M, 2010 Prices, Uninflated, Undiscounted) 

Derived from the above information, the proportional split between Space, In Situ and Services in the 
four options of the Booz CBA is shown below. 

Space 

In Situ  Services

Option A 

71% 

Option B 

79% 

Option C 

79% 

Option D 

75% 

4% 

4% 

5% 

6% 

25% 

17% 

16% 

19% 

Average 

76% 

5% 

19% 

Table 27: Percentage Breakdown of Costs by Booz CBA Option (2014-2020) 

The  proportions  across  the  four  options  are  broadly  comparable,  with  the  average  being  76%  for 
Space,  5%  for  In  Situ  and  19%  for  Services.  A  baseline  scenario  has  been  established,  based  on  the 
allocation of budget in the same proportions as Booz CBA Option B (79%, 4%, and 17% respectively). 
Booz  Option  B  was  used  as  a  reference  point  since  it  is  the  closest  to  the  2014-2020  MFF  funding 
level. The three scenarios are built around this reference scenario and its associated benefit profile.  

62 

Expenditure associated with supporting service take-up is funded through CIP. 

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Option X 

2014-2020 

2021-2030 

Annual Averages 

% 

€ Mio  % 

€ Mio 

79% 

427 

79% 

427 

4% 

17% 

22 

92 

4% 

17% 

22 

92 

100% 

541 

100% 

541 

Space 

In Situ  

Services 

Total 

Table 28: The Baseline Scenario (equivalent to Option X) 

The  lowest  cost  option  in  the  Booz  CBA  is  Option  A.  Under  this  option,  overall  costs  are  largely 
equivalent to benefits, meaning that the Copernicus programme “breaks even” with a BCR of 1.  

The  assumption  is  therefore  taken  that  there  are  levels  of  funding  for  Space,  In  Situ  and  Services, 
which  constitute  the  “minimum  requirement”  for  the  realisation  of  benefits.  Below  these  levels,  the 
benefits  do  not  exceed  the  costs,  and  the  BCR  would  fall  below  1.  Based  on  previous  studies,  and 
through  additional  consultation,  minimum  thresholds  for  benefits  realisation  as  well  as  upper  limits 
(ceilings,  i.e.  in  terms  of  absorptive  capacity)  on  annual  expenditure  have  been  established.  Both  of 
these are presented in the table below. 

Minimum Threshold 

Ceiling  

(Absorptive Capacity) 

€ Mio, Annual 

Space 

In Situ 

Services 

300 

20-30 

70 

≈600 

60 

170 

Table 29: Minimum Thresholds for Benefit Realisation and Upper Limits on Annual Expenditure 

5.2 Scenario Descriptions 

Given  the  amount  of  funding  which  has  been  made  available  to  the  Copernicus  programme,  the 
scenarios described in this section examine the effects of varying the amount allocated to the three cost 
areas: Space, In Situ and Services. The analysis preferentially emphasises the trade-off between Space 
and Services, maintaining the In Situ component relatively stable. 

The logic applied in designing the four cost breakdown scenarios in this analysis proceeds as follows: 

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Minimum annual budget levels have been identified for the three components, below which realisation 
of benefits falls rapidly towards zero. Such levels are approximately € 320 Mio for Space, € 20 Mio for 
In Situ, and € 90 Mio for Services. 

The first scenario represents the maximum investment in the Service component. 

The  remaining  two  scenarios  adjust  the  levels  of  the  Space  component  upwards,  and  apportion  the 
remaining budget to the Services component. 

The cost-benefit analysis therefore establishes the three scenarios described below. 

Service Delivery Pull 

The  Space  component  is  held  at  a  level  just  below  the  Booz  CBA  Option  B  threshold  (74%),  and 
investment  in  the  Services  component  is  maximised  at  22%,  whilst  4%  is  allocated  to  the  In  Situ 
component. This scenario allows for a level of funding for the Space component in line with previous 
studies.  The  realisation  of  additional,  programme-wide  benefits  rests  on  the  development  of  the 
Service component and on the implementation of its enabling factors. In this scenario, the structure of 
the Space component is assumed to follow the serialisation strategy for Sentinel deployment. 
Intermediate 

The  “Intermediate”  scenario  raises  the  Space  component  by  4%  with  respect  to  the  first,  and  the 
Services  component  is  reduced  proportionally  (to  18%).  In  this  scenario,  as  in  the  previous  one,  the 
structure  of  the  Space  component  is  assumed  to  follow  the  serialisation  strategy  for  Sentinel 
deployment. 
Technology Driven  

Investment  in  the  Space  component  is  maximised  (81%).  The  Services  component  is  decreased  to 
15%. Under this level of investment, it would be feasible to consider the deployment of the C units of 
Sentinels  1-3,  but  this  would  not  affect  the  benefits  profile  without  a  corresponding  increase  in 
investment in the Services component. 

5.3 Costs and Benefits  

The budgetary allocation assumptions for each scenario, given a fixed total budget, are presented in the 
table below:  

I - Service Delivery Pull 

II - Intermediate 

III - Technology Driven 

Total 

Space 

In Situ 

Services 

Space 

In 
Situ 

Services 

Space 

In 
Situ 

Services 

€ Mio 

TOTAL 
 (2014-
2030) 

€ Mio 

400 

22 

119 

422 

22 

97 

438 

22 

81 

541 

% 

74% 

4% 

22% 

78% 

4% 

18% 

81% 

4% 

15% 

Table 30: Cost Distribution By Scenario (Annual Averages) 

The percentage differences between the baseline costs and the costs of each of the other scenarios are 
reported in the table below. 

I - Service 
Delivery Pull 

II - Intermediate 

III - Technology 
Driven 

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Space 

In Situ  

Services 

-6% 

0% 

29% 

% 

-1% 

0% 

6% 

3% 

0% 

-12% 

Table 31: Cost Scaling Relative to Baseline Scenario (applicable to both periods) 

Based on the average correlation between cost and benefit scaling (1:1.3) derived from the Booz CBA 
model, the above cost changes imply the following percentage changes in benefit for each scenario: 

I - Service Delivery Pull 

II - Intermediate 

III - Technology Driven 

Space 

In Situ  

Services 

-6% 

0% 

32% 

% 

-1% 

0% 

6% 

3% 

0% 

-13% 

Table 32: Benefit Scaling Relative to Baseline Option 

The benefits for each of the Scenarios I-III are calculated by applying the benefit scaling factors to the 
Baseline Scenario benefits.  

2014-2020 

2021-2030 

TOTAL  
(2014-2030) 

Delta on Scen. I 

Service Delivery Pull 

Intermediate 

Technology Driven 

6,3 

6,1 

5,9 

Table 33: Benefit Simulation By Scenario 

Cumulative, € Bn 

23,0 

22,1 

20,8 

29,4 

28,2 

26,7 

% 

0% 

-4% 

-10% 

The  model  outcome  is  the  result  of  pre-existing  relationships  of  proportion  between  the  costs  and 
benefits of the options defined in the Booz CBA.  

5.4 Sensitivity Analysis 

A sensitivity analysis on the 2014-2020 period has been performed, in order to elucidate the potential 
impact on benefits, while changing the proportional allocation of the services or space components on 
a total given budget . The results are highlighted below. 

Scenarios 

Selected Scenarios 

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Cost Breakdown (%) 

Space 

Services 

In-Situ 

Total Benefits Outputs  

(2014-2020, € Bn) 

Delta on Scenario I 

Delta Services on Scen I 

I+ 

71% 

25% 

4% 

6,7 

6% 

14% 

I 

74% 

22% 

4% 

6,3 

0% 

0% 

II 

78% 

18% 

4% 

6,1 

-4% 

III 

81% 

15% 

4% 

5,9 

-7% 

-18% 

-32% 

III+ 

85% 

11% 

4% 

5,7 

-11% 

-50% 

Table 34: Sensitivity Analysis of Different Potential Scenarios (at Constant Total Costs) 

The  analysis  shows  that,  for  a  given  total  budget  envelope,  every  +10%  increase  in  the  services 
funding  results  in  a  +2%  increase  of  total  benefits,  while  an  equivalent  +10%  increase  in  the  Space 
funding  (up  to  the  next  step  ceiling  of  approx.  €500  M  defined  in  “Scaling  of  Benefits”),  to  the 
disadvantage of the Services component, will result in an approximately -7% decrease of total benefits, 
as illustrated below. 

Conceptual Analysis 

+/- Delta 

Scenario I 

+/- Delta 

Delta Services Costs vs Scenario I 

Delta benefits vs Scenario I 

Delta Space Costs vs Scenario I 

Delta benefits vs Scenario I 

-10% 

-2,1% 

-10% 

11,2% 

0% 

0% 

0% 

0% 

10% 

2,1% 

10% 

-7,1% 

Table  35:  Correlation  between  Incremental  Variations  of  Services  and  Space  Costs  and  Resultant 
Benefits 

5.5 Downstream Impact 

In  addition  to  the  benefit  analysis,  the  economic  impacts  associated  with  the  EO  and  Copernicus 
downstream market have been estimated by scenario, as illustrated in the chart below. 

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Figure 11: Projected Downstream Turnover By Scenario (2014-2030, € Bn) 

The chart shows a sharp increase in the first period, which tapers off gradually from 2021, whilst still 
rising steadily.  

5.6 Impact on Employment 

The  impact  on  employment  has  been  estimated  for  each  scenario,  considering  direct  and  indirect 
employment separately. The effects of  different funding inputs  have been  modelled according to the 
cost scaling parameters outlined above. 

I - Service Delivery Pull 

II - Intermediate 

III - Technology Driven 

DE 

IE 

T 

DE 

IE 

T 

DE 

IE 

T 

# of jobs created / maintained by 2030 

TOTAL  
(2014-
2030) 

US 

MS 

DS 

T 

2.030 

5.270 

7.300 

2.140 

5.550 

7.690 

2.220 

5.770 

7.980 

710 

1.830 

2.540 

680 

1.750 

2.420 

650 

1.690 

2.340 

9.170 

29.340 

38.510 

8.710 

27.850 

36.550 

8.460 

27.070 

35.530 

11.900 

36.440 

48.330 

11.510 

35.150 

46.650 

11.330 

34.520 

45.840 

Table  36:  Employment  Impact  By  Scenario  (both  periods,  figures  rounded  up  to  nearest  10;  US: 
Upstream, MS: Midstream, DS: Downstream, DE: Direct Employment, IE: Indirect Employment, T: 
Total) 

5.7 Economic, Environmental and Social Benefits  

This  section  combines  the  economic  indicators  resulting  from  the  analysis  above  with  qualitative 
considerations in order to assess the overall impact of the scenarios in terms of three areas: economic, 
environmental and social. The economic impact is linked to the development of the Space industry, the 
downstream sector and cascading economic impacts on the wider economy. The environmental impact 
is loosely hinged on the climate change and under certain extent to resource management benefits, and 
the  social  impact  is  linked  to  the  emergency  response/security  benefits,  other  resource  management 
benefits like maritime navigation, CAP monitoring and urban planning, as well as to the employment 

EN 

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benefits.  It  is  worth  noting  that  in  order  to  derive  the  scenario-related  benefits  from  the  quantitative 
assessment table below, the Social and Environmental totals should be added to the Wider Economic 
row. 

The  benefits  in  each  of  these  benefit  categories  have  been  assessed  both  qualitatively  and 
quantitatively. In the latter case, data from the cost-benefit analysis has been linked with outcomes in 
each benefit category. For the qualitative analysis, reference is made to the list of impact areas in the 
EC  Guidelines  for  Impact  Assessment63,  which  are  qualitatively  ranked  in  terms  of  the  impact  of 
Copernicus.  

63 

SEC(2009) 92: “Impact Assessment Guidelines”, January 2009. 

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   EN 

 
                                                 
Benefit Category 

Impact Area 

Scenario Ranking 

Functioning of the internal market and competition 

Competitiveness, trade and investment flows 

Operating costs and productivity  

Small and Medium Enterprises development 

Administrative burdens on businesses 

Public authorities 

Economic 

Property rights 

Innovation and research 

Consumers and households 

Specific regions or sectors 

Third countries and international relations 

Macroeconomic environment 

TOTAL (Relative) 

Environmental 

The climate 

Transport and the use of energy 

Air quality 

I 

++ 

++ 

++ 

+++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

3 

+++ 

+ 

+++ 

II 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

2 

+++ 

+ 

+++ 

III 

++ 

++ 

++ 

+ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

++ 

1 

+++ 

+ 

+++ 

EN 

76 

EN 

 
  
Biodiversity, flora, fauna and landscapes 

Water quality and resources 

Soil quality or resources 

Land use 

Renewable or non-renewable resources 

The environmental consequences of firms and consumers 

Waste production / generation / recycling 

The likelihood or scale of environmental risks 

Animal welfare 

International environmental impacts 

TOTAL (Relative) 

Social 

Employment and labour markets 

Standards and rights related to job quality 

Social inclusion and protection of particular groups 

Gender equality, equality treatment and opportunities, non -discrimination 

Individuals, private and family life, personal data 

Governance, participation, good administration, access to justice, media and ethics 

+ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

2 

+++ 

+++ 

+ 

+ 

+ 

+ 

+ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

2 

++ 

2 

+ 

+++ 

+++ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

EN 

77 

EN 

 
  
 
 
 
Public health and safety 

Crime, Terrorism and Security 

Access to and effects on social protection, health and educational systems 

Culture 

Social impacts in third countries 

TOTAL (Relative) 

+++ 

+++ 

+++ 

+++ 

+ 

3 

+++ 

+++ 

+++ 

+++ 

+ 

2 

+++ 

+++ 

+++ 

+++ 

+ 

1 

Table 37: Economic, Social and Environmental Benefits by Scenario – Qualitative Assessment 

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I. Service Delivery Pull 

II. Intermediate 

III. Technology Driven 

P1 

P2 

T 

P1 

P2 

T 

P1 

P2 

T 

2.802 

4.003 

6.805 

2.953 

4.220 

7.173 

3.067 

4.382 

7.449 

Quantifiable 
Indicators 

Space 
turnover (€ M) 

industry 

Downstream impact (€ 
M, at period end) 

Economic 

Wider economy 

815 

38 

219 

125 

Total (€ M) 

3.655 

4.347 

Delta vs scen. I 

Global climate change  

1.033 

European air quality 

1.345 

0% 

8.213 

3.793 

1.034 

163 

8.002 

9.246 

5.138 

European 
deforestation 

Environ-
mental 

Global desertification 

Oil spills 

2 

790 

39 

6 

8 

2.280 

109 

3.070 

148 

774 

35 

3.762 

987 

1.282 

2 

804 

38 

207 

116 

4.543 

-2% 

7.846 

3.616 

981 

152 

752 

33 

8.306 

3.852 

8.833 

4.898 

6 

8 

2.320 

3.124 

104 

142 

952 

1.235 

2 

814 

36 

202 

107 

4.690 

-4% 

7.336 

3.429 

954 

140 

8.542 

8.288 

4.664 

5 

8 

2.250 

3.064 

97 

134 

Total (€ M) 

3.210 

14.401 

17.611 

3.113 

13.892 

17.005 

3.040 

13.118 

16.158 

Delta vs scen. I 

Social 

Maritime navigation 

102 

 EU CAP Monitoring 

 Urban development 

12 

9 

0% 

282 

35 

27 

384 

47 

37 

97 

12 

9 

-3% 

268 

33 

26 

365 

45 

35 

93 

11 

9 

-5% 

251 

31 

24 

345 

42 

33 

Emergency response 

705 

1.859 

2.565 

668 

1.761 

2.430 

641 

1.650 

2.291 

 Global  humanitarian 
aid 

2.269 

6.284 

8.552 

2.167 

6.003 

8.171 

2.091 

5.613 

7.704 

EN 

79 

EN 

 
  
 
 
 
Total (€ M) 

3.098 

8.487 

11.585 

2.953 

8.092 

11.045 

2.845 

7.570 

10.415 

 Employment impact 

48.330 

Delta 
vs 
(benefits) 

scen. 

I 

Delta vs scen.I (empl) 

0% 

0% 

46.650 

-5% 

-3% 

45.840 

-10% 

-5% 

Table 38: Economic, Social and Environmental Benefits by Scenario – Quantitative Assessment 

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5.8 Concluding Remarks 

The analysis has examined three  scenarios  with different proportional allocations of budget 
amongst  Space,  In  Situ  and  Services.  The  scenario  “Service  Delivery  Pull”  has  the  highest 
benefit potential, at € 29,4 Bn cumulatively over the 2014-2030 period. 

The  combined  impacts  of  the  socio-economic  benefits  and  the  downstream  stimulus  are 
presented in terms of their integrated contribution to European GDP in the table below. 

I - Service Delivery 
Pull 

II - Intermediate 

III - Technology 
Driven 

2014-2020 

Cumulative Benefits 

2021-2030 

Cumulative Benefits 

TOTAL  
(2014-2030) 

Cumulative Benefits 

€ Bn 

Downstream Impact in 
2030 

Integrated contribution to 
European GDP 

Integrated BCR 

% 

: 

6,3 

23,0 

29,4 

1,03 

6,1 

22,1 

28,2 

0,98 

5,9 

20,8 

26,7 

0,95 

0,164% 

0,157% 

0,149% 

3,30 

3,17 

3,01 

Table 39: Integrated Impact Simulation By Scenario (Undiscounted) 

Only marginal benefits will arise from increased investments in Space, even if substantially 
increased.  The  benefits  of  Copernicus  will  arise  in  parallel  with  the  expansion  of  the 
quality  and  range  of  services,  enabling  a  manifold  increase  in  the  volume  of  products 
and correspondingly of the used base served. This, in turn requires substantial investments 
on  the  Services  side,  sustained  over  time.  If  the  role  of  Copernicus  is  to  make  available 
information  where  and  when  required,  this  must  occur  through  the  mechanism  of  services. 
Their  creation,  establishment,  acceptance,  reliability  will  be  more  than  proportional  to  the 
investment made. 

The  FeliX  model  (a  system  dynamics  model  and  benefit  simulator,  which  takes  into 
account  the  complex  relationships  between  natural  and  socio-economic  systems) 
forecasts benefits that are in the order of magnitude of € 21.7 Bn cumulatively by 2020 
and € 220 Bn by 2030 (undiscounted), substantially higher (~7 times, in the long term) than 
the ‘static’ benefit projections of the present study. This is due to the enlarged scope of the 
FeliX  model,  and  its  broad  assumptions  of  underlying  infrastructure  (namely  GEOSS64,  to 
which  Copernicus  is  expected  to  constitute  the  EU’s  major  contribution).  The  comparison 
with the FeliX output serves to highlight the strong potential for higher-order magnitudes of 
benefits when Copernicus is viewed as part of a broader system of systems.  

64 

Global Earth Observation System of Systems. 

EN 

81 

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Figure 12: Potential Range of Benefit Scaling Based on Felix Model 

All projected benefits in this analysis are contingent on the implementation of a set of 
enabling  factors,  including  regulatory  and  market  development  actions.  Any  delays  in 
the  implementation  of  these  factors  will  have  a  knock-on  effect  on  the  service  uptake  and 
downstream  market  development.  It  may  be  interesting  to  consider  the  use  of  other 
budgets  in  support  of  the  implementation  of  enabling  factors,  given  that  these  can  be 
associated  with  other  initiatives  and  EU  policy  goals,  chiefly  in  respect  of  SMEs  (i.e. 
COSME) and regional and local development.  

EN 

82 

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6. REFERENCE LITERATURE 

Booz 
(http://ec.europa.eu/enterprise/policies/space/files/gmes/studies/ec_gmes_cba_final_en.pdf) 

Cost-Benefit 

Analysis 

(2011) 

Co. 

for 

& 

GMES 

OECD  (2002)  Measuring  Productivity  -  OECD  Manual:  Measurement  of  aggregate  and 
industry-level 
growth 
(https://www.oecd.org/std/productivitystatistics/2352458.pdf) 

productivity 

The 
OECD 
ilibrary.org/content/book/9789264111790-en) 

(2011) 

space 

economy 

at 

a 

glance 

(http://www.oecd-

SpaceTec  Partners  (2012)  European  Earth  Observation  (EO)  and  GMES  Downstream 
(copernicus.eu/pages-principales/library/study-
Study 
Services 
reports/?no_cache=1&cHash=2cd2910c48204b21e891488a5e59a1b2) 

Market 

EN 

83 

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ANNEX II: List of acronyms and definitions 

Abbreviations & Acronyms 

Acronym 

Explanation 

BCR 

Benefit/Cost Ratio 

BOOZ 

Booz & Company 

C/B analysis  Cost-Benefit analysis 

CIP 

COR 

Competitiveness and Innovation Framework Programme 

Committee of the Regions 

CSES 

Centre for Strategy and Evaluation Services 

DG 

Directorate-General 

DG CLIMA 

The Directorate-General for Climate Action 

DG MARE 

The Directorate-General for Maritime Affairs and Fisheries 

EEA 

EU 

European Environment Agency 

European Union 

ECFIN 

The Directorate-General for Economic and Financial Affairs 

ECV's 

Essential Climate Variables 

EDA 

European Development Agency 

EESC 

European Economic and Social Committee 

EGNOS 

European Geostationary Navigation Overlay Service 

EIB 

EIF 

European Investment Bank 

European Investment Fund 

EMMIA 

European Mobile and Mobility Industries Alliance 

EMSA 

European Maritime Safety Agency 

EO 

ESA 

ESE 

EU 

Earth Observation 

European Space Agency 

European Space Exposition 

European Union 

EUMETSAT  The European Organisation for the Exploitation of Meteorological Satellites 

EN 

84 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FAO 

FP6 

FP7 

Food Agriculture Agency 

The Sixth Framework Programme 

The Seventh Framework Programme 

Galileo 

European Global Satellite Navigation System 

GCOS 

Global Climate Observation System 

GIO 

GSC 

GMES Initial Operations 

GMES Space Component 

GTOS 

Global Terrestrial Observing System 

GMES  

Global Monitoring for Environment and Security 

GNSS 

Global Navigation Satellite System 

HELCOM 

The Baltic Marine Environment Protection Commission 

ICEMAR 

Iceberg Forecasting project 

IGPB 

IHDP 

International Geosphere-Biosphere Programme 

International Human Dimensions Programme 

INSPIRE 

Infrastructure for Spatial Information in the European Community 

Meteosat 

European meteorological geostationary satellite 

MFF 

MS 

Multiannual Financial Framework 

Member States 

MSFD 

Marine Strategy Framework Directive 

NASA 

National Aeronautics and Space Administration 

NEREUS 

Network of European Regions Using Space Technologies 

obsAIRve 

Air quality observation project 

OECD 

Organisation for Economic Co-operation and Development 

OSPAR 

the Oslo and Paris Conventions for the protection of the marine  
environment of the North-East Atlantic. 

PA 

Preparatory Action 

Pan-EU 

Involving all European nations 

PwC 

R&D 

PricewaterhouseCoopers 

Research and Development 

EN 

85 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SME 

SPV 

SSA 

STP 

Small and Medium Enterprise  

Special Purpose Vehicle 

Space Situational Awareness 

SpaceTec Partners 

TFEU 

Treaty on the Functioning of the Union  

UN 

United Nations 

UNEP 

United Nations Environment Programme 

UNFCCC 

United Nations Framework Convention on Climate Change 

UNOSAT 

United Nations Institute for Training and Research 

US 

United States 

VC funds 

Venture capital funds 

VEGA 

VEGA Group PLC 

VHR 

Very High Resolution 

WCRP 

World Climate Research Programme 

WFD 

WFP 

Water Framework Directive 

World Food Program 

Definitions 

Term 

Term 

Altimetry 

Explanation 

Explanation 

The science and techniques involved in making relative or absolute height measurements. 

Contributing missions 

GMES relevant satellite missions. Around 30 Earth observation missions, operated by 
European national or multinational organisations, are in orbit today or will be flying within the 
next few years. 

Credit rating 

Discounting 

A published ranking, based on detailed financial analysis by a credit bureau, of one's financial 
history, specifically as it relates to one's ability to meet debt obligations. The highest rating is 
usually AAA, and the lowest is D. Lenders use this information to decide whether to approve a 
loan. 

Most policy options result in costs and benefits that arise at different times. Building a railway 

EN 

86 

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Term 

Explanation 
line has an immediate cost, but provides benefits over a long period. When beneficiaries 
receive a constant amount of money over a set period of time, their benefit will worth more on 
the first year than on the last year of the programme. Conversely, costs to be paid in the future 
are less onerous. The discount rate is a correction factor reflecting these facts. All in all, 
discounting allows the direct comparison of costs and benefits occurring in different points in 
time, valuing immediate costs and benefits more highly than those that occur later. When 
'discounting' is used, it should be applied both to costs and benefits. A standard discount rate 
(4%) should be used for impacts that occur in the future. The total of the discounted costs and 
benefits of a policy option is called its net present value. (EC Impact Assessment Guidelines, 
SEC(2009) 92,15 January 2009) 

ETF Startup 

Part of the EC's Growth & Employment Initiative aiming to provide risk capital to innovate 
SMEs through investment in relevant specialised venture capital funds. 

GMES-dedicated 
satellites 

Missions, developed specifically for the operational needs of the GMES programme. 

Impact 

In situ 

Economic, social and environmental consequences of a policy or solution, either direct or 
indirect, either positive or negative. 

Sensor - usually ground based, airborne or sea based - closely located to the observed 
phenomena, as opposed to remote sensing 

INSPIRE Directive 

Directive 2007/2/EC of the European Parliament and of the Council of 14 March 2007 
establishing an Infrastructure for Spatial Information in the European Community. It will enable 
the sharing of environmental spatial information among public sector organisations and better 
facilitate public access to spatial information across Europe. 

Jason-CryoSat (Jason-
CS) 

A satellite that will carry a radar altimeter package to continue the high-precision, low-
inclination altimetry missions of Jason-2 and 3 satellites. 

Meteosat Third 
Generation  

Satellite programme established through cooperation between EUMETSAT and ESA. The 
Meteosat Third Generation (MTG) programme is expected to bring a step change in capability 
for operational meteorology, by providing significant improvement over the capabilities of the 
current Meteosat generation. The programme should guarantee access to space-acquired 
meteorological data until at least the late 2030s. 

Radar altimeter (RA) 

Active sensors that use the ranging capability of radar to measure the surface topography 
profile along the satellite track. It provides precise measurements of a satellite's height above 
the ocean by measuring the time interval between the transmission and reception of very short 

EN 

87 

   EN 

 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
 
Term 

Explanation 
electromagnetic pulses. 

Remote sensing 

The technique of obtaining information about objects through the analysis of data collected by 
special instruments that are not in physical contact with the objects of investigation 

SEED Initiative 

Global partnership for action on sustainable development and the green economy. It supports 
innovative small-scale and locally driven entrepreneurships around the globe which integrate 
social and environmental benefits into their business model. Founded by UNEP, UNDP and 
IUCN at the 2002 World Summit on Sustainable Development in Johannesburg. 

Sensitivity analysis (SA) 

Study of how the variation in the output of a model (numerical or otherwise) can be 
apportioned, qualitatively or quantitatively, to different sources of variation. 

Sentinel missions 

Satellite missions, developed specifically for the operational needs of the GMES programme. 
Five families of Sentinels are being developed up to now. 

Synthetic aperture radar 

Airborne or space borne side looking radar system which utilizes the flight path of the platform 
to simulate an extremely large antenna or aperture electronically, and that generates high-
resolution remote sensing imagery. 

EN 

88 

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ANNEX III: Reference studies and documents 

A  number  of  external  studies,  some  specifically  targeting  Copernicus  and  others  Earth 
observation  from  a  more  general  perspective,  are  available.  In  addition,  a  specific  study  on 
the  Copernicus  downstream  sector's  competitiveness  has  been  performed  by  an  external 
contractor.  Finally,  cost  information  on  services  can  be  derived  from  past  and  current 
development  activities,  co-financed  by  the  Commission  under  FP6  and  FP7.  For  the  space 
component, the ESA Long Term Scenario provides detailed cost figures.  

The  Impact  Assessment  builds  on  the  Impact  assessments  accompanying  the  2008 
Communication  "GMES:  we  care  for  a  safer  planet",  the  proposal  for  a  Regulation  on  the 
European Earth observation programme (GMES) and its initial operations, and for the 2009 
communication "GMES: Challenges and Next Steps for the Space Component". 

Further data on costs and benefits of the GMES services was also gathered. On the cost side, 
the  Commission  services  interacted  with  partners  such  as  ESA  and  the  EEA  to  obtain  an 
update  of  cost  figures.  The  Impact  Assessment  builds  on  the  outcome  of  the  cost-benefit 
analysis performed by SpaceTec Partners in 2012. This is based on SpaceTec Parnters' 2012 
study on the downstream market potential of GMES and on a cost-benefit analysis which was 
performed  by  BOOZ  &  Co  in  2011  complementing  the  2006  PWC  study  entitled  "Socio-
economic benefits of GMES".  

a) 

Studies performed by external contractors 

–  SpaceTec  Partners.  Injection  paper:  Preliminary  Note  in  Preparation  for  Copernicus 

Impact Assessment. March 2013. 

–  SpaceTec  Partners.  Assessing  the  Economic  Value  of  Copernicus:  “European  Earth 

Observation and Copernicus Downstream Services Market Study". Dec 2012. 

–  Booz&Co. Cost-Benefit Analysis for GMES. Sep 2011. 

–  the  CBA  carried  out  for  the  "GMES  service  elements"  (GSE),  i.e.  service  demonstrator 
projects  financed  by  ESA,  including  the  CBA  procured  by  ESA  for  following  GSE: 
COASTWATCH;  Icemon;  RISK-EOS;  Urban  Services;  TerraFirma;  RESPOND; 
Northern view; PROMOTE; ROSES; ForestMon; GMFS; SAGE. 

–  a  PWC  study  on  the  socio-economic  benefits  of  GMES  procured  by  ESA  (see 

http://www.esa.int/esaLP/SEMJZ10DU8E_LPgmes_0.html; 

–  an ECORYS study on the GMES downstream sector procured by the Commission; 

–  sections  concerning  GMES  in  the  ECORYS  study  on  the  European  space  programme, 

procured by the Commission; 

–  the GEOBENE study, financed by the Commission under FP 6; 

–  the HEIMTSA study, financed by the Commission under FP 6. 

Cost  estimates.  Cost  estimates  for  different  Copernicus  components  have  been 

b) 
prepared: 

–  ESA Long term scenario (LTS) for the GMES space component; 

–  Costs  for  the  in  situ  component  prepared  in  the  frame  of  the  FP7-funded  GISC  study 

carried out by the EEA; 

EN 

89 

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–  Service costs were calculated in-house by the Copernicus Bureau and then discussed with 

member States65, and in the Boss4GMES study. 

c) 

Other supporting studies 

–  Impact  Assessment 

of 
http://ec.europa.eu/enterprise/space/off_docs_en.html  

the  European 

Space 

Policy, 

including  GMES 

–  GOSIS 

study 

(funded 

under 

FP6) 

on  GMES 

governance  models 

http://ec.europa.eu/enterprise/space_research/pdf/gosis.pdf 

–  SEIS  Impact  Assessment:  Towards  a  Shared  Environmental  Information  System  (SEIS) 

http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC0112:EN:HTML 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0046:FIN:EN:PDF 
http://eurlex.europa.eu/Notice.do?val=464212:cs&lang=en&list=464212:cs,&pos=1&page
=1&nbl=1&pgs=10&hwords=&checktexte=checkbox&visu=#texte 

–  Impact  Assessment  relating  to  the  Economic  and  Governance  Evolution  of  Space  in 
Industry 

for  EC  DG  Enterprise  & 

Europe,  RPA  February  2007,  prepared 
http://ec.europa.eu/enterprise/calls/files/08_004/rpa_study.pdf 

–  European  Commission  Green  Paper,  European  Space  Policy,  COM(2003)17  final 
http://eur-

(21.1.2003) 
lex.europa.eu/LexUriServ/site/en/com/2003/com2003_0017en01.pdf 

- 

–  European  Commission  White  Paper  Space:  a  new  European  frontier  for  an  expanding 
Union: An action plan for implementing the European Space policy, COM(2003)673 (11 
November 
2003) 
http://ec.europa.eu/comm/space/whitepaper/whitepaper/whitepaper_en.html 

–  European  Commission  'European  Space  Policy  -  Preliminary  Elements'  COM(2005)  208 
2005) 
(23.May 

final 
http://ec.europa.eu/enterprise/space/doc_pdf/pep.pdf 

–  SPASEC March 2005: Report of the panel of experts on space and security, prepared for 
Industry 
Enterprise 

EC 
http://ec.europa.eu/comm/space/news/article_2262.pdf 

DG 

& 

–  ECORYS  /  ESYS  2006:  SATMAC  –  Satellite  Communication  Market  Assessment  and 
Cost Benefit -, Market Characterisation Report and Satellite Communication Application 
and 
Industry 
Enterprise 
EC 
http://ec.europa.eu/enterprise/space/doc_pdf/impact_assessment_en.pdf 

Services, 

prepared 

DG 

for 

& 

–  BICEPS  report  -  Building  an  Information  Capacity  for  Environmental  Protection  and 
Security 
2004) 
Commission, 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 

(European 

RTD, 

DG 

–  DPAG  report  -  Data  Policy  Assessment  for  GMES  (European  Commission  DG  RTD)  - 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 

65 

See the document PB – 02 – DOC 01. 

EN 

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–  INSPIRE  Extended  Impact  Analysis  –  European  Commission,  SEC(2004)980  – 

http://inspire.jrc.it/reports/inspire_extended_impact_assessment.pdf 
http://inspire.jrc.it/reports/AANSDI_Italy_FinalApproved_v12en.pdf 

–  GINIE  (10/2003):  Geographic  Information  in  the  Wider  Europe,  DG-INFSO  Contract 

IST-2000-29493 
http://www.ec-gis.org/ginie/doc/ginie_book.pdf 

–  PIRA  (09/2000):  Commercial  Exploitation  of  Europe’s  Public  Sector  Information  © 
2000 

European 
ftp://ftp.cordis.europa.eu/pub/econtent/docs/2000_1558_en.pdf 

Communities, 

–  Craglia M and J. Nowak (2006): “Assessing the Impacts of Spatial Data Infrastructures - 
Report  of  the  International  Workshop  on  the  Cost  to  Benefit  and  Return  on  Investment 
Ratios 
Italy 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reports/report_sdi_crossbenefit%20.pdf  

SDIs”. 

2006, 

Ispra, 

of 

–  EARSC 2011: A Taxonomy for the EO Services Market. 

–  European  KNOWLEDGE  INTENSIVE  Services  based  on  Earth  Observation:  “Doing 
business with the help of GMES” by S.Galant, T.Pagano, A.Vaféas, TECHNOFI, October 
2007 (copy available) 

–  Eurospace (2011) The European space industry in 2010. 

–  Eurospace (2011) Satellite-Based EO, Market Prospects to 2020. 

–  Geospatial Interoperability Return on Investment Study, National Aeronautics and Space 
2005. 

Administration 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reference/ROI_Study.pdf 

Interoperability  Office,  April, 

(NASA):  Geospatial 

–  OECD Environmental outlook to 2003 http://www.oecd.org/dataoecd/29/33/40200582.pdf 

–  OECD(2005): 

Space 

2030 

– 

“Tackling 

society’s 

challenges” 

http://www.oecd.org/document/13/0,2340,en_2649_34815_35059341_1_1_1_1,00.html 

–  OECD (2011) Space Economy at a Glance. 

–  OECD (2011) Measuring the Space Economy. 

–  Oxford Economics (2009) The Case for Space: The Impact of Space Derived Services and 

Data. 

–  Space 

for 

GeoInformation, 

The 

Netherlands 

(02/2003) 

http://www.ravi.nl/ruimte/index.htm 

–  MICUS  (01/2003):  The  market  for  geospatial  information:  potential  for  employment, 
government 

the  Germen 

innovation 
http://www.micus.de/pdf/micus_study_broadband.pdf 

value, 

added 

study 

and 

for 

–  P.Weiss (NOAA, 02/2002): Borders in Cyberspace – conflicting public sector information 
comparison) 
impacts 

economic 

EU/US 

(for 

the 

policies 
http://www.weather.gov/sp/Borders_report.pdf 

their 

and 

–  Environmental Performance Index 2008, Yale and Columbia, http://epi.yale.edu/Home  

–  Euroconsult  2007,  Assessment  of  the  downstream  value-adding  sectors  of  space-based 

applications 

EN 

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–  VEGA  and  Booz  Allen  and  Hamilton,  2004,  The  state  and  health  of  the  European  and 

Canadian EO service industry 

–  VEGA, 2008, The state and health of the European and Canadian EO service industry in 

2006 

EN 

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ANNEX IV: Evaluation of the GMES Preparatory Action (Conclusions) 

Overall conclusions 

Overall,  the  GMES  Preparatory  Action  (PA)  has  played  a  valuable  role  in  laying  the  basis 
for, and structuring the development of GMES Initial Operations 2011-13.  

The  PA  has  been  an  appropriate  instrument  in  supporting  the  development  of  GMES  by 
providing additional funding to promote greater take-up of data products developed through 
FP7 precursor services. The contribution made however has been project-specific, given the 
varied nature of the five projects, which are difficult to evaluate as a coherent whole. 

It  was  not  necessary  to  have  a  formal  annual  work  programme  for  the  PA,  given  its 
experimental nature, relatively small budget compared with other GMES funding streams and 
the fact that a description of the topics for the annual calls for tenders was included in the DG 
ENTR Annual Work Programme.  

The  contribution  made  by  the  PA  has  been  important  for  both  operational  services  funded 
through  the  GIO.  In  the  case  of  the  EMS-Mapping  Service,  the  main  contribution  was  in 
structuring the user community through linkER66 while the GIO land has benefited through 
funding for the development of the first pan-European reference data products covering EEA-
39, the EU-DEM and EU-HYDRO. 

Although there were criticisms of the approach to the development of reference access data 
under  the  PA,  it  is  not  possible  presently  to  produce  pan-European  datasets  on  an  EEA39 
basis using bottom-up data in the absence of harmonised and comparable national datasets.  

In  order  to  address  gaps,  the  EEA  therefore  implemented  a  combination  of  a  centralised 
approach  to  the  procurement  of  European  datasets  combined  with  a  decentralised  approach 
through  INSPIRE  to  harmonise  national  datasets  to  European  specifications  over  the 
medium-long term.  

Since this exercise is on-going and far from complete, it is clear that a top-down approach to 
the development of comparable European datasets was necessary in the interim period.  

Since  problems  remain  in  terms  of  the  lack  of harmonisation  of  reference  datasets between 
EU countries and gaps in country coverage, it is important that NMCAs work together with 
the  EC  and  the  EEA  through  the  INSPIRE  process  in  order  to  ensure  that  national  data  is 
interoperable with EU reference datasets.  

GMES stakeholders were sometimes unsure what the difference was between the Preparatory 
Action and wider funding instruments that are contributing to the common goal of ultimately 
having six operational services within GMES. 

Relevance 

It is not appropriate to assess the internal coherence of the GMES Preparatory Action as an 
instrument  in  its  own  right,  but  rather  how  it  has  contributed  to  supporting  the 
implementation of pre-operational services and in prepaing for operational services. 

The  projects  supported  through  the  PA  were  relevant  in  addressing  the  specific  identified 
needs  of  users.  A  distinction  can  be  made  between  projects  that  addressed  needs  across  a 
whole  service  area  within  GMES,  such  as  linKER/  emergency  management  and  those  that 
were  focused  on  specialised  areas  of  downstream  and  only  one  part  of  the  service  (e.g. 
ICEMAR / maritime and obsAIRve / atmosphere). 

66 

Establishment of a network of NFPs composed of civil protection agencies 

EN 

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Projects  supported  through  the  PA  have  led  to  useful  feedback  being  obtained  on  evolving 
user  needs.  These  lessons  have  been  incorporated  by  the  EC,  EEA,  JRC  and  service 
contractors responsible for contracts under GMES Initial Operations and some adaptations to 
services and data products have been made. 

Efficiency 

The limited overall budget of € 10.2 Mio for the GMES PA meant that funding support for 
preparatory technical projects to support the development of intial and full operations could 
not be provided across all GMES Services67.  

The  GMES  PA  demonstrates  high  efficiency.  For  instance,  there  have  been  no  budgetary 
overruns and the administrative overheads in managing the PA within the Commission were 
low. 

Effectiveness 

Among the lessons learned through the implementation of the PA were that obtaining regular 
user  input  is  critical  in  adapting  services  to  meet  evolving  user  needs.  This  was  taken  into 
account in planning the configuration of the future GIO EMS-Mapping Service.  

The  PA  was  successful  in  supporting  take-up  of  GMES  pre-operational  services  funded 
through  FP7.  As  a  result  of  intensive  awareness-raising  activities  through  linkER,  for 
instance,  more  users  became  aware  about  the  potential  utility  of  GMES  data  (especially  in 
EU12 MS), and the number of activations increased over time.  

A  factor  hindering  the  linkER  project’s  effectiveness  was  that  users  had  to  rely  on  non-
validated  reference  data  provided  through  SAFER  because  it  was  funded  through  an  FP7 
research environment. In comparison, the new EMS-Mapping Service in the GIO is able to 
provide an operational service using validated data. 

The PA has allowed for a piloting approach to testing and developing innovative, customised 
downstream  services  and  applications  that  build  on  GMES  services.  This  has  enabled  new 
service areas to be tested, such as the development of on-board ship ice monitoring services 
(ICEMAR). 

However,  there  remain  low  awareness  levels  among  the  private  sector  about  the  specific 
GMES data that will be available in future, and uncertainty with regard to the structure and 
size of public user markets and how the private sector can access these markets.  

Since Preparatory Actions are an EU financial instrument that operates outside the constraints 
of a full EU programme, the PA has allowed the Commission to experiment and test the first 
initial operational downstream services (e.g. obsAIRve and ICEMAR).  

The linkER project helped to ensure that there was strong user input into the development of 
data  products  and  services  developed  through  FP7  SAFER.  This  in  turn  has  fed  into  the 
effectiveness of the design and configuration of the EMS-Mapping Service under the GIO. 

Results and impacts 

Since  most  projects  are  on-going,  it  is  too  early  to  evaluate  the  final  results  and  impacts 
achieved. Nevertheless, a number of findings can be noted at interim stage: 

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For instance, in the marine field, a project on ice monitoring was funded an but there was no possibility 
to address other areas served by the Marine Service within FP7 (MyOcean 2).  

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A  key  result  of  linkER  was  that  it  structured  the  user  community  in  the  emergency 
management  field.  This  was  viewed  as  having  been  critical  in  laying  the  basis  for  the 
development of future GMES Services within the EMS-Mapping under the GIO. 

The  ICEMAR  and  obsAIRve  projects  helped  to  demonstrate  the  potential  of  GMES  to 
facilitate the development of downstream EO services and applications. However, it remains 
unclear at this stage how viable it will be to provide services on a fully commercial basis. 

The  new  pan-European  reference  access  data  products  developed  through  the  RDA  project 
Lot 1 – EU-DEM and EU-HYDRO) have directly contributed to the implementation of the 
GIO  land’s  pan-European  component  (in  particular,  to  the  development  of  the  5  thematic 
HRLs).  

This demonstrates continuity between the Preparatory Action and the GIO in resolving long-
standing  challenges  in  strengthening  the  comparability  of  reference  data  between  Member 
States. 

With  regard  to  sustainability,  the  PA  has  helped  to  encourage  greater  networking  and 
coordination  among  user  communities  in  specific  fields  (e.g.  ice  monitoring,  emergency 
management) and also the exchange of information.  

Community Added Value 

The  linkER  project  promoted  the  development  of  a  pan-European  community  of  civil 
protection  users  of  GMES  data.  This  added  value  by  promoting  better  and  more  effective 
coordination between civil protection agencies and wider users. 

It was recognised by stakeholders that there was a need for EU intervention to promote the 
development  of  downstream  GMES  services  and  applications  since  these  remain  in  their 
infancy. 

Sustainability  

The projects funded through the PA could not have gone ahead without EU assistance. 

The projects supported through the PA have led to concrete results and outcomes that have 
already fed into the implementation of GMES services within the GIO. As such, the results 
achieved through the PA are likely to be sustainable, since follow-up is broadly assured. For 
instance:  

linkER  project  2008  -  a  network  of  NFPs  has  been  established  and  a  customised  user 
interface  and  has  been  developed  supported  by  the  installatoin  of  an  IT  platform  through 
which users can access GMES-derived data products and reference maps. 

RDA project Lot 1 2009 – two new pan-European datasets have been developed that cover 
EEA39,  the  EU-DEM  and  EU-HYDRO.  These  are  essential  for  the  development  of  the  5 
thematic HRLs and also for European environmental reporting and monitoring purposes 

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ANNEX V: Evaluation of the GMES Initial Operations (Executive Summary) 

Conclusions - the Emergency Management Service – Mapping 

The EMS-Mapping Service was already fully operational by April 2012 and has been able to 
provide data products to users from the outset. It was therefore possible to carry out an initial 
assessment of the service’s relevance, efficiency, effectiveness and utility to users in the civil 
protection community. Conclusions in respect of the initial period of implementation of the 
EMS-Mapping service were that: 

The transition process from the pre-operational Emergency Response Service (“ERS”) under 
FP7 SAFER to the EMS-Mapping Service has generally been effective. However, there were 
difficulties in the first 3 months for users of the ‘Rush Mode’ service in accessing image data 
beyond those that had activated the service directly. This problem has now been resolved. 
The EMS-Mapping Service meets identified user needs for the timely provision of reference 
data and ‘before and after’ reference maps. Among the advantages of the new EMS-Mapping 
in Rush Mode are that users are able to work with vector data and on validated data products.  
The  EMS-Mapping  Service  has  been  effective  in  incorporating  the  cumulative  practical 
experiences  and  knowledge  built  up  over  several  years  about  user  needs  in  the  emergency 
response  field  through  dedicated  thematic  workshops,  working  groups  and  user  meetings 
organised through the GMES precursor project SAFER (FP7) and through the linkER project 
supported through the GMES Preparatory Action.  
The  transition  from  SAFER  (FP7)  to  the  new  EMS-Mapping  Service  under  the  GIO  was 
regarded as having been effective, with strong continuity in the quality of service provision 
for  authorised  users.  However,  there  were  some  initial  difficulties  in  ensuring  that  civil 
protection  agencies  beyond  those  that  had  requested  the  service  activation  were  able  to 
receive the data.  
There  remains  a  challenge  in  the  timeliness  of  data  product  availability  in  Rush  Mode  for 
civil protection agencies since there are difficulties linked to external factors for the service 
provider in meeting the target timeframe for post-event delineation and grading maps68.  
The network of National Focal Points (NFPs) set up through the linkER Preparatory Action 
and coordinated by DG ECHO’s  MIC has played an important role in disseminating ESM-
Mapping  satellite  imagery  /  data  products  to  relevant  actors  at  regional  and  sub-regional 
levels.  NFPs  in  some  Member  States  have  been  especially  active  in  putting  in  place 
mechanisms to structure the user community whereas in other Member States, there remains 
more  work  to  do  in  this  area,  which  is  also  important  from  an  awareness-raising  point  of 
view.  
There  were  high  levels  of  satisfaction  among  service  users  with  final  image  products. 
However, some civil protection users of EMS-Mapping data products stated that they would 
like  to  have  access  to  primary  datasets  through  ESA’s  DWH  so  as  to  be  able  to  integrate 
these into operational workflows.  
The EMS-Mapping Service could be made more effective if the space component were to be 
supplemented  where  appropriate  in  Rush  Mode  with  very  high  resolution  in-situ  data  for 
specific types of emergencies (e.g. airborne remote sensing data for earthquakes).  

Conclusions – the GIO land 

The data products produced through the GIO’s local, pan-European and global components 
will not be available until 2013 at the earliest (in many cases only in 2014 and 2015). It is 

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This problem was also identified under the SAFER GMES precursor sevice and is presently largely out 
of  the  control  of  the  service  conrtactor  given  it  is  linked  to  the  availability  of  sufficiently  recent 
satellite imagery through ESA’s DWH, which in turn depends on satellite flyover frequencies. 

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therefore  too  early  to  provide  a  comprehensive  evaluation  of  the  GIO  land  service. 
Nevertheless,  significant  progress  has  already  been  made  in  the  specification  of  land  data 
products and in the design and configuration of the above three service components. Findings 
in respect of the implementation to date of the GIO land are set out below. 

Management and implementation 

The  EEA  has  played  an  effective  role  as  the  technical  coordinator  for  GIO  land  and  in 
assuming management responsibility for the pan-European and local components. Likewise, 
the GMES Bureau has made good progress in the preparatory stages of the global component. 
As part of its coordination role in respect of the pan-European and local components within 
GIO land, the EEA has strengthened links between GMES and INSPIRE (Infrastructure for 
Spatial Information in Europe).  
The  EEA  has  played  a  constructive  role  in  structuring  the  GMES  land  community  in 
particular  through  its  coordination  role  in  EIONET69.  This  network  –  which  includes  a 
dedicated  working  group  on  GMES  -  has  been  especially  effective  in  bringing  together 
appropriate  stakeholders  to  cooperate  on  outstanding  technical  matters  relating  to  data 
harmonisation  and  interoperability  of  land  cover  and  land  change  products  (although 
outstanding issues remain in harmonising national reference datasets). 
Through its coordination role on EIONET, the EEA has improved cooperation between EU 
level actors in GMES and Member States’ national and regional environmental authorities70. 
The EEA has also been effective in promoting greater awareness about INSPIRE and how it 
can benefit GMES through the EIONET and the User Forum.  
The JRC has made a valuable input to the preparatory stages in the development of the global 
land component. 
Clarity  should  be  provided  by  the  Commission  as  to  whether  GMES  includes  formal 
cooperation  with  EFTA  countries  and  with  Candidate  Countries  in  the  Balkans  and  in 
Turkey, given the potential for GMES to support the European Neighbourhood Policy (ENP). 

The GIO land service 

The  GIO  land  has  successfully  built  on  a  number  of  existing  land  monitoring  services  and 
data products, notably the Land Cover and Land Change products (Image 2006 and the recent 
CLC Image 2012) and the imperviousness and forest layers.  

The outputs produced through the GIO land have strong relevance to identified user needs. 
Once  available,  they  should  help  to  inform  evidence-based  policy  making  and  enable  the 
overall  situation  across  the  EU  and  EEA39  to  be  assessed.  Data  products  being  developed 
through the GIO land’s pan-European component on an EEA39-wide basis should meet the 
identified needs of  European users. Comparable data products  are needed for reporting and 
monitoring purposes at European level by the EEA. Many EU environmental indicators will 
be directly informed by GMES land data, for instance, in the EEA’s update on the European 
State of the Environment due in 2015. 

Although  many  national  authorities  and  environmental  agencies  and  currently  make  use  of 
national  Land  Cover  and  Land  Change  usage  datasets  (especially  in  smaller  EU  countries 
where  the  scale  of  reference  data  and  spatial  resolution  may  be  higher),  EEA39  datasets 

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EIONET  is  a  partnership  network  of  the  European  Environment  Agency  and  its  member  and 
cooperating  countries,  connecting  National  Focal  Points.  The  network  supports  the  collection  and 
organisation  of  data  and  the  development  and  dissemination  of  information  concerning  Europe’s 
environment. 
The  main network  to  facilitate  this cooperation  has  been  the  NRCs  for  Land  within EIONET  and  the 
GMES working group within EIONET. 

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produced through GMES should benefit national authorities, for instance by facilitating inter-
Member  State  benchmarking  and  macro-regional  geographic  comparisons.  Since  pan-
European  and  national  datasets  serve  different  purposes,  they  should  continue  to  exist  in 
parallel.  

Pan-European  datasets  will  also  help  Member  States  to  carry  out  monitoring  activities  to 
meet  environmental  reporting  requirements  under  various  key  EU  Directives71.  The 
availability  of  pan-European  data  products  covering  EEA39  will  moreover  provide  an 
important input to enable Member States’ to meet their commitments under Annex II (Land 
Cover)  and  Annex  III  (Land  Change  and  environmental  monitoring)  of  the  INSPIRE 
Directive. 

The  development  of  five  thematic  High  Resolution  Layers  (“HRLs”)  through  the  GIO 
represents  a  major  step  forward.  The  data  will  provide  new  environmental  information  that 
can  be  built  upon  and  further  customised  through  the  integration  of  datasets  that  build  on 
‘core’ land products by either the public or private sectors. This should in turn promote the 
development of downstream services and applications. 

It is not yet possible to produce comparable data across EU27 (and even less so on an EEA39 
basis) using a bottom-up  approach  despite the significant  EU investment made through EU 
programmes (by DG INFSO and DG ENTR) in funding NMCAs to carry out technical work 
to address this problem and to strengthen the harmonisation of national datasets. 

Despite  progress,  the  interoperability  of  European  reference  datasets  produced  using  a  top-
down approach and national datasets remains problematic in instances where access and use 
restrictions relating to the use of national datasets prohibits proper linking. There is a need to 
engage  with  NMCAs  in  order  to  resolve  this  issue  and  strengthen  access  to  reference  data 
within the in-situ component of GMES.  

The division of the imperviousness and forestry layers into regionalised Lots across EEA39 
had both advantages and disadvantages. While it promoted supplier diversity and ensured that 
the  responsible  service  contractor  had  strong  regional  knowledge,  there  has  been  a  lengthy 
period to develop product specifications during the streamlining phase, with methodological 
and  technical  challenges  faced  by  the  contractors  responsible  for  the  different  Lots  to 
harmonise the production of data products. 

Although at an earlier stage of development, the GIO global land component has potential to 
support evidence-based policy making, especially for external EU policies in domains such as 
agriculture,  food  security,  environment,  desertification,  drought  monitoring  and  tackling 
climate  change  at  international  level.  It  should  also  help  the  Union  to  meet  its  existing 
European  commitments  under  international  treaties  and  conventions  by  contributing  to 
GEOSS, thereby fulfilling the EU’s international commitments regarding earth observational 
systems. 

Key evaluation findings 

An assessment was carried out of key evaluation issues pertaining to the implementation of 
GMES Initial Operations.  

Relevance 

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Examples are the Water Framework Directive, Air Quality Directive, Birds Directive, Habitats Directive 
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The GIO was found to be highly relevant to the identified needs of users, especially those at 
European  and  national  level,  but  less  relevant  from  the  point  of  view  of  some  local  and 
regional  stakeholders.  This  is  because  GMES  ‘core’  data  products  have  been  designed  to 
provide comparable data at European level across EU Member States, with a need for further 
customisation  of  data  (and  the  incorporation  of  additional  thematic  datasets)  before  the 
products have strong utility at local/ regional levels. With regard to coherence, although the 
GIO Regulation was adopted before the Europe 2020 strategy was adopted, the programme is 
coherent  with  the  Europe  2020  aims  of  promoting  smart,  sustainable  and  inclusive  growth, 
for  instance,  through  the  development  of  downstream  services,  which  will  contribute  to 
growth  and  jobs,  although  there  are  barriers  to  maximising  the  potential  linked  to  lack  of 
awareness among enterprises and a demand for higher resolution data (see case study 4).  

Effectiveness 

Overall,  the  GIO  is  likely  to  be  an  effective  mechanism  for  developing  fully  operational 
GMES services. It is clear that the objective of establishing the first operational services has 
been achieved. The transition towards a pre-operational environment has been effective and 
generally smooth, although there have been particular challenges in the land field as part of 
the structuring phase for the development of the five HRLs.  

Significant progress has already been made in the development of fully operational land and 
emergency management services. However, budgetary limitations have meant that only two 
services  out  of  the  intended  eventual  six  could  be  developed,  which  risks  underming  the 
overall  coherence  of  GMES  in  terms  of  programmatic  structure  and  the  development  of 
services  in  parallel.  This  raises  a  question  as  to  whether  an  appropriate  balance  has  been 
struck between the budgetary allocation for the space and service components of GMES. The 
services  component  represents  a  very  small  share  and  this  has  restricted  the  pace  of 
development of operational services. 

There is a question mark as to whether Regulation 911/2010 provides sufficient clarity as to 
the programme’s strategic objectives during initial operations in the 2011–2013 period. There 
is no clear distinction between the general and specific objectives in the annex which outlines 
the  ‘objectives’.  It  is  therefore  difficult  to  assess  how  far  at  this  early  stage  the  GIO  will 
contribute  to  the  Europe  2020  Strategy’s  objectives.  Only  tentative  conclusions  can  be 
reached  with  regard  to  GMES’  contribution  to  growth  and  jobs  since  there  have  been  long 
developmental lead times within GMES before data products have been made  available for 
public and private sector usage. However, this is beginning to happen, especially in the past 
12-24 months. 

Efficiency 

Overall,  stakeholders  were  very  satisfied  with  management  and 
implementation 
arrangements within the GIO. Specifically, they were satisfied with the delegation of specific 
functions to the JRC, the EEA and DG ECHO’s MIC in relation to for the development of 
two GMES services and the provision of technical expertise by the JRC and the EEA to steer 
the  development  of  the  EMS-Mapping  and  GIO  land  services,  and  to  ensure  adequate 
coordination in defining data and imagery needs to ESA. 

Although  it  is  not  appropriate  to  make  direct  comparisons  with  precursor  GMES  services 
(since R&D is inherently more cost-intensive compared with running an operational service), 
GMES Initial Operations should deliver value for money, because lessons have been learned 
from  precursor  projects,  and  user  needs  have  been  incorporated  into  the  procurement  of 
service contractors and into service design and implementation.  

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Overall,  although  premature  to  provide  a  full  assessment,  the  two  main  GMES  services 
developed through the GIO are likely to deliver good value for money. At this early stage in 
implementation,  results  are  only  partially  available  (e.g.  data  products  /  maps  available 
through the EMS-Mapping).  

Results and impacts  

The  GIO  appears  on  track  to  achieve  the  objective  of  developing  two  fully  operational 
services  within  the  3  year  programming  period,  an  important  programme  ‘result’.  The  key 
achievement  to  date  of  the  EMS-Mapping  Service  is  the  availability  of  a  fully  operational 
service from the outset of the service’s launch accessible by national focal points capable of 
delivering data products in both rush and non-rush mode. However, since the non-rush mode 
service  has  not  yet  been  activated,  the  rush  mode  service  appears  likely  to  have  a  greater 
impact on assisting the user community, particularly in the civil protection field.  

The GIO land has already made a number of important achievements, particularly within the 
pan-European  component,  through  the  initial  design  configuration  of  5  thematic  HRLs 
covering  EEA39.  However,  It  is  however  too  premature  at  this  stage  to  assess  the  GIO’s 
results  and  impacts  since  it  will  take  another  12  –  24  months  years  to  produce  the  data 
products  that  are  envisaged.  Impacts  will  consequently  need  to  be  assessed  at  ex-post 
evaluation  stage.  Nevertheless,  the  data  products  under  development  are  based  on  previous 
evidence  from  the  development  of  data  products  such  as  CLC  data  using  Image  2006,  the 
products  should  be  useful  to  a  wide  variety  of  environmental  stakeholders  and  public 
authorities at European and national levels. 

European Added Value 

GMES is a European flagship programme and by definition, the activities supported within it 
have an inherent European dimension. 

In the emergency management field, the GIO also demonstrates European Added Value since 
they address users’ cross-border EO monitoring needs. In the land monitoring domain, pan-
European data products in the land and land cover change field and the wider thematic HRLs 
being developed through the GIO in 2011-2013 will provide unique data products, for which 
in the case of the former there is already demonstrable demand from EU policy makers and 
agencies, with benefits for Member States in having fully comparable data.  

Likewise, the development of the EU-DEM and EU-HYDRO pan-European reference access 
data  products  produced  through  the  predecessor  GMES  RDA  project  under  the  GMES 
Preparatory  Action  have  strong  European  Added  Value.  The  development  of  comparable, 
relevant  and  timely  reference  access  data  on  a  pan-European  and  EEA39  basis  was  an 
essential precursor for the development of EU-wide GMES services in future and represents a 
European level innovation in that such datasets were not previously available. 

Sustainability 

The services being provided and data products being produced through the GIO could not be 
continued  without  public  funding,  pointing  to  high  financial  additionality.  However,  this 
also means that uncertainty about future funding can act as a barrier to future development. 
One  of  the  weaknesses  of  INSPIRE’s  contribution  to  the  effective  development  of  GMES 
operational  services  is  that  the  directive  and  supporting  technical  processes  are  limited  to 
EU27,  whereas  GMES  data  products  produced  through  the  Land  Service  need  to  ensure 
geographic coverage across EEA39 countries. 

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ANNEX VI: Assessing the Economic Value of Copernicus: “European EO and 
Copernicus Downstream Services Market Study" – Executive Summary 

This  document  presents  the  summary  of  the  Final  Report  of  the  “European  Earth 
Observation (EO) and GMES Downstream Services Market Study”, performed under the 
first  Specific  Contract  of  the  Framework  Service  Contract  89/PP/ENT/2011  –  LOT  3 
(“Support to GMES related policy measures”).  

It contains a high-level summary of key findings of the analysis of the potential market value 
for  European  Earth  Observation  and  GMES72  downstream  services  for  the  Non-Life 
Insurance sector.  

STUDY OBJECTIVES 

In  the  context  of  Copernicus  programme  implementation,  several  studies  have  been  carried 
out, focusing on costs and benefits in the context of European Commission (EC) regulatory 
actions.  Independently,  industry  surveys  and  market  analyses  have  described  the  state  and 
structure of the Earth Observation market. However, the economic value of these markets in 
relation to Copernicus has not yet been the subject of detailed investigation, particularly with 
regard  to  the  potential  impacts  on  growth  and  employment.  The  specific  objective  of  the 
study  is  to  assess  the  potential  market  value  for  European  Earth  Observation  and 
Copernicus  downstream  services  (with  a  focus  on  non-institutional  markets),  and  the 
potential  resultant  impact  on  employment.  The  study  seeks  to  project  the  future  markets 
for downstream services over a long-term time horizon (2015-2030). 

KEY ASSUMPTIONS AND ENABLING FACTORS 

The study is subject to the following key assumptions:  
Catalytic  effect  of  free  and  open  data  provision73:  Copernicus  services  are  expected  to 
enable  and  stimulate  the  downstream  sector  by  freely  and  openly  providing  access  to  basic 
pre-processed data and modelling outputs, more cheaply than would be the case if companies 
had  to  undertake  such  basic  processing  and  modelling  themselves.  The  business  case  for 
COPERNICUS is that the services improve the efficiency of the downstream sector, allowing 
the industry to offer better value for money in products and services to end users. 
Full and assured continuity of Copernicus: In order for the potential of future markets for 
Earth Observation downstream services to be realised, the continued long-term availability of 
Copernicus  data  services  is  assumed.  The  investment  incentives  are  crucially  tied  to  both 
political  and  financial  commitments  at  an  institutional  level.  This  continuity  of  services 
presupposes  the  continuity  and  evolution  of  Copernicus  infrastructure  providing  the 
necessary data. Without continuity, the "raison d'être" of Copernicus is put into question, as 
users will only rely on Copernicus if a sustained flow of data is ensured. Without appropriate 
funding, existing services will cease their activities.  

Furthermore,  a  set  of  enabling  factors  has  been  identified,  on  which  action  and  associated 
investments  are  considered  necessary  for  the  realisation  of  downstream  market  potential. 
Certain  institutional  conditions  are  necessary  to  enable  and  accelerate  the  market  dynamics 

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73 

GMES  will  hereafter  be  referred  to  as  Copernicus,  following  the  recent  decision  by  the  European 
Commission to change the name of the programme (as per http://europa.eu/rapid/press-release_IP-12-
1345_en.htm). 
This refers, in the first instance, to data derived from the Copernicus family of dedicated satellites, the 
Sentinels. The transitory phenomenon of Contributing Mission data will be dealt with in a follow-on 
study on the midstream, scheduled for 2013.  

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foreseen in this study, linked, inter alia, to market development and capacity building. They 
are summarised below: 

Regulation:  Free and open data policy; assurance of data  continuity; quality assurance and 
standards-building. 
Data Availability and Access: Simplified access to Copernicus Sentinel datasets at ready-to-
use processing levels (L1)74 for high-volume distribution, thereby responding to the needs of 
the value-adding industry, ideally avoiding the duplication of efforts at national level.  
Demand/Market:  Continued  dissemination  efforts;  regional/local  demand  incubation  and 
communication schemes aimed at commercial users; federation / consolidation of user needs 
and  industry  requirements;  further  integration  of  EO  information  as  a  supplement  to 
traditional systems.  

Examples of relevant enabling activities, which already exist in Europe, include:  

Tools  for  Copernicus  Sentinel  data  pre-processing,  which  are  already  being  piloted  in 
selected Member States. 
The  provision  of  support  to  the  promotion  of  Space  applications-related  ideas  (e.g.  GMES 
Masters) and business incubators. 
Easy access to credit for entrepreneurs willing to invest in the value-added service sector. 
Support  to  training  programmes  in  geospatial  sciences  to  ensure  availability  of  necessary 
talents for these applications. 
The building of networks and the organisation of dedicated events to consolidate user needs 
and industry requirements. 

These activities should be built upon, extended and promoted in order for the full potential of 
the market to be realised. Under the EU’s Horizon 2020 strategy, “it is expected that around 
15% of the total combined budget for all societal challenges and the enabling and industrial 
technologies will go to SMEs”75.  

KEY FINDINGS 

In this study, the Earth Observation value chain is divided into three areas of activity, each 
with specific markets, actors and industry structure:  

Upstream refers to the providers of EO Space infrastructure, comprising satellite and ground 
system manufacturers and operators, as well as the providers of launch capabilities.  
Midstream refers to data providers, who make use of upstream infrastructure for commercial 
and institutional purposes. The core activities include the acquisition, production, processing, 
archiving and distribution of Space-derived data. 
Downstream represents companies offering Value-Added Services (VAS). Such companies 
typically  develop  commercial  applications  based  on  EO  data  provided  by  the  commercial 
data resellers.  
Market Overview 

The European EO downstream market is currently estimated at € 700 Mio, against € 200 Mio 
for  the  midstream  and  €  600  Mio  for  the  upstream.  According  to  a  study  published  by 
Euroconsult, the EO downstream market will, in 2015, reach approximately € 1.000 Mio in 

74 
75 

L1 includes geometric and radiometric pre-processing. 
COM (2011) 808, final, p. 10. 

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Europe  (and  over  €  2.000  Mio  globally),  growing  at  a  Compound  Annual  Growth  Rate 
(CAGR)76 of 7%. 

Figure 13: Earth Observation Downstream Services Market Forecast 

Sector Analysis  
The  present  study  used  Eurostat’s  NACE77  taxonomy  as  a  basis  for  the  identification  of 
potential  industrial  application  areas  for  Copernicus  downstream  services.  Five  initial  pilot 
sectors,  considered  to  have  a  high  market  development  potential,  have  been  selected  for 
priority analysis:  

Agriculture 
A cost-benefit analysis78 shows that net economic benefits of more than € 5 per hectare can 
be achieved, thanks to savings in nitrogen, better crop quality (increased protein content) and 
increases to overall crop yield. A positive environmental impact is also gained by avoiding 
the dispersal of excessive nitrogen into the water, air and soil.  

Non-life insurance 

Continuous and reliable Earth Observation information can play a role in reducing costs and 
introducing efficiencies in non-life insurance business processes. Remote sensing information 
can  substantially  improve  the  accuracy  of  catastrophe  models,  thus  helping  insurers  to 
improve  risk  management  and  compliance  practices.  In  addition,  claims  management 
functions  can  be  supported  by  damage  or  disaster  assessment  information  supporting  loss 
quantification and exposure mapping.  

Oil and gas 

In  the  oil  and  gas  sector,  Earth  Observation  exploitation  is  currently  still  limited.  Satellite 
imagery  and  GIS  systems  can,  however,  usefully  complement  geological  surveys  and 

76 

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78 

The Compound Annual Growth Rate expresses the smoothed annualised growth rate of an investment 
or of a business element (in this case, industry turnover). 
NACE is a standardised classification system for describing economic sectors and their activities in the 
European Union. The second revision of the NACE taxonomy has been used in this study. 
Knight et al., 2009. 

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improve the readability of complex geoscience datasets, used by engineers in order to identify 
areas  where  it  is  geologically  likely  that  petroleum  or  gas  deposits  might  exist.  Moreover, 
satellite  imagery  can  contribute  to  improved  asset  management:  seismic  planning  and 
subsidence  mapping  help  to  highlight  geo-hazard  risks  and  to  ensure  safer  management  of 
reservoirs and pipelines. 

Water transport 

In the water transport sector, Earth Observation information offers benefits through a number 
of different applications. Satellites provide continuous and large-scale information about sea 
currents, which can be converted into current forecast models. These models allow ships to 
optimise  their  routes,  yielding  fuel  efficiency  benefits  and  the  reduction  of  CO2  emissions. 
Satellite  imaging  applications  can  also  improve  traffic  management  in  major  ports  and 
harbours. 

Electricity generation from renewable sources 

Earth Observation can contribute to the optimisation of renewable energy systems for power 
production,  and  to  the  provision  of  information  for  optimal  integration  of  traditional  and 
renewable  energy  supply  systems  into  electric  power  grids.  Energy  sources  such  as  solar, 
wind,  and  wave  power  facilities,  which  offer  environmentally-friendly  alternatives  to  fossil 
fuels,  are  particularly  sensitive  to  environmental  conditions.  Data  on  cloud  cover,  solar 
irradiance,  and  on  wind/wave  speed  and  direction  (combined  with  other  environmental 
parameters such as land elevation and land cover models) are vital elements in developing a 
strategy for the location and operation of solar, wind, and wave power facilities. 

Examples  of  practical  downstream  applications  in  these  sectors  include  solar  power  site 
selection  and  plant  monitoring,  damage  assessment  for  insurance  claim  management,  oil 
pipeline encroachment monitoring and precision agriculture maps.  

These  and  many  other  examples  of  the  use  of  EO  data  demonstrate  that  the  free  and  open 
provision  of  Copernicus  data  is  an  essential  driver  for  the  creation  of  new  business 
opportunities.  

The  long-term  market  potential  for  these  pilot  segments  has  been  assessed  through  the 
concept  of  the  Total  Addressable  Market  (TAM).  This  concept  expresses  hypothesised 
market penetration, under specific assumptions and within certain limitations. It serves as a 
metric of the underlying revenue potential of a given opportunity, and should be treated as a 
“bounded theoretical maximum”. The approach and key inputs for the estimation of the EO 
downstream services’ Total Addressable Market for each pilot segment are illustrated in the 
following table. 

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Table 40: Approach and Key Inputs for Estimating EO Downstream Market Potential 

The results of the analysis performed for the five pilot market segments are illustrated in the 
following figure. 

Long Term Forecast EO Downstream Services Market Potential in Europe 
(Selected Market Segment Analysis, Indicative Figures of Turnover in € Million)  

1200 

€M 

1000 

800 

600 

400 

200 

0 

972 

72 

RES Electricity 

449 

Agriculture 

101 

75 

171 

204 

Non-life insurance 

Extraction of crude oil and natural gas 

Water transport 

Current Market  

Total Addressable Market 

TAM= Total Addressable Market 
Source: Eurostat, Euroconsult (2011), Industry Interviews, STP Analysis. 

Figure  14:  Long  Term  Forecast  EO  Downstream  Services  Market  Potential  for  the  5 
Pilot Segments 

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The approach used for the pilot sectors has been applied to the wider European economy by 
qualitatively  evaluating  the  remaining  NACE  segments  on  their  potential  for  uptake  of  EO 
value-added services. 15 out of the 21 top-level NACE sectors have been identified as being 
strong candidates for EO downstream service applications. The demand potential is moderate 
to high for more than half of these sectors. The total turnover of these sectors represents 19% 
of European GDP. 

EO and Copernicus Downstream Market Potential 

On the basis of the selected industry sectors and EO relevance analysis, expert interviews and 
information from previous studies, the total European EO downstream market potential has 
been assessed.  

The  analysis  has  resulted  in  the  identification  of  an  indicative  economic  factor  (EO 
downstream  Total  Addressable  Market  as  %  of  European  GDP)  and  a  total  estimated  EO 
downstream long-term market potential of € 2,8 billion, as shown in the scheme below. 

European EO Downstream Services Market Potential Estimation Methodology 
Long Term Forecast Based on Total Addressable Market Analysis 

Conceptual 

Priority Industry Sectors Analysis 

Total Commercial EO DS TAM Calculation 

Agriculture 

Insurance 

Extraction of Oil & Gas 

Water Transport 

Estimated  
Total Addressable Market  
(with different  
approaches as deemed 
Estimated  
appropriate on the basis of 
Total Addressable Market*  
industry characteristics) 

Industry interviews 

Consistency checks 

Validation and 
Calibration 

Derived Factor 

% of EO 
Downstream 
Services 
Turnover/ 
Purchase of 
Goods and 
Services= 
0,2% 

0,02% 

11% 
 (Purchases of goods 
& services of relevant 
NACE segments as % 
of GDP EU GDP) 

0, 2% 
Derived 
Factor 

Total EU 
GDP 

0,02% 

Total EU 
GDP** 

EO DS TAM  
Factor as % of 
EU GDP 

€2,8 bn  

(*): with different approaches as deemed appropriate on the basis of industry characteristics; (**): Equal to €12,6 trillion in  2011 
Sources: Euroconsult,Eurostat, Industry interviews, STP Analysis 

Figure 15: Methodology for Estimation of European EO Downstream Services Market 
Potential  

Due  to  the  nature  of  the  TAM  concept  as  well  as  to  the  uncertainty  of  future  market 
projections, it is difficult to predict when the estimated potential will be reached. Therefore, 
the potential growth scenarios have been calculated in two example cases (2015 + 10 years 
and 2015 + 15 years, resulting in a CAGR of 11% and 7% respectively). These results have 
been  triangulated  with  data  from  other  studies,  including  Euroconsult  (2010,  2011).  The 
potential  growth  rates  of  EO  downstream  markets  display  consistency  with  the  projected 
growth rates drawn from these sources. 

In order to derive the Copernicus downstream market potential the following considerations 
must be highlighted. 

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The  downstream  services  and  applications  considered  in  the  analysis  do  not,  in  general, 
require  Very  High  Resolution  (VHR)  data,  i.e.  the  required  resolution  for  these  services  is 
higher  than  2,5  meters.  Only  a  small  fraction  (approximately  10%)  of  the  commercial 
downstream  services  for  the  different  sectors  would  require  VHR  data  as  an  input.  This 
fraction is therefore excluded from the analysis of the addressable markets resulting from the 
availability of Copernicus services.  

Copernicus is expected to provide impetus to the downstream services  industry  by offering 
specific technical advantages through the Sentinel satellites along with free and open access 
to  data.  This  can  represent  an  incentive  for  new  users  as  well  as  downstream  service 
providers to engage in EO service solutions.  

Copernicus may to some extent impact the (less valuable) EO data market for non-VHR (5% 
of  total  EO  data  sales  market  value)  served  by  commercial  data  providers.  This  may  urge 
some providers to focus more on the VHR data market or expand their capabilities towards 
value-adding  activities.  Those  operators  who  provide  data 
through 
Contributing  Missions  are  expected  to  see  some  non-institutional  markets  strengthened  and 
others opened up.  

to  Copernicus 

Taking  into  account  the  considerations  above,  three  scenarios  have  been  developed, 
representing different levels of market potential fulfilment (40%, 70% or 100%).  

Scenario 

Market 
fulfilment 

2015-2030 
CAGR 

High 

100% 

Medium  70% 

Low 

40% 

7,6% 

5,5% 

2,4% 

Table 41: COPERNICUS Downstream Market Development Scenarios 

This  leads  to  a  Copernicus  downstream  potential  turnover  ranging  between  €  1.000  Mio,  € 
1.800 Mio and € 2.600 Mio by 2030, as illustrated in the figure below. 

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GMES Commercial DS Total Addressable Market*  
(Estimated Long Term Value, Euro Billion) 

GMES Commercial DS Market Potential*  
(Yearly Turnover Projection by Scenario**, € Billion)  

3,0 

€ Bn  

2,8 

€ Bn 

2,6 

2,5 

2,0 

1,5 

1,0 

0,5 

0,0 

0,02% of 
EU GDP 

Total 
Commercial 
EO DS TAM 

Commercial 
EO requiring 
VHR data 
(-10%) 

GMES DS 
TAM potential 

Market uptake 
for GMES free 
and open data 
policy 
(+1,25%) 

(*): Assuming GMES full data continuity funding scenario;; (**): High= 100% of market potential fulfillment, Medium= 75% and Low 40% 
Sources: Euroconsult, Eurostat, STP Analysis 

Figure 16: Copernicus Downstream Services Market Potential 

Since  the  complete  fulfilment  (100%)  of  the  market  potential  is  rather  unlikely,  it  can  be 
considered  as  a  "theoretical  maximum",  while  the  low  case  can  be  seen  as  a  “minimum 
boundary”. Therefore, in the analyses which follow, the medium scenario is retained in each 
case.  

Impact on Employment 

In the following sections, this revenue potential is translated into direct employment effects in 
the downstream area which was the focus of this study. Estimates have also been derived for 
the  upstream  and  midstream  sectors.  To  assess  a  further  indirect  impact,  the  European 
Commission proposed the application of a methodology based on a previous study by Oxford 
Economics (2009). In the context of this analysis: 

Direct  employment  refers  to  persons  employed  by  an  organisation  operating  in  the  space 
industry (upstream, midstream or downstream); 
Indirect  employment  refers  to  persons  employed  in  other  industries  which  are  impacted  by 
the  Space  industry,  either  because  they  form  part  of  the  Space  industry  supply  chain,  or 
because the industry supplies other goods and services (such as retail or financial services). In 
both cases, these industries benefit from increased employment in the Space sector.  
Downstream Direct Employment 

The market dynamics projected in the analysis are expected to result from the positive effects 
on  the  downstream  market  brought  about  by  a  combination  of  Copernicus  data  and  service 
availability and a set of institutional market development actions. 

SMEs  are  expected  to  play  a  key  role  in  this  process:  it  is  estimated  that  over  200  value-
adding  SME  service  providers  exist  in  Europe  (Euroconsult,  2011),  and  under  the  EU’s 

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Horizon  2020  strategy,  new  funding  instruments  will  be  implemented  in  order  to  support 
early-stage, high-risk R&D innovation by SMEs79. 

The market development can therefore be associated with a corresponding impact on direct 
employment,  which  is  defined  as  persons  employed  by  organisations  operating  within  the 
downstream sector. 

The approach utilises a methodology based on the relationship between projected Copernicus 
downstream turnover and industry labour productivity. Labour productivity is calculated by 
proxy, as the quotient of industry turnover and the total number of employees, or FTEs (Full-
Time  Equivalents)  in  the  sector.  Three  employment  impact  scenarios  are  presented  below, 
based on the varying fulfilment of market potential.  

Figure 17: EO and Copernicus Downstream Services Direct Employment Potential 

The medium scenario suggests that the impact on direct EO downstream employment will be 
approximately 16.000 cumulatively by 2030. This includes both newly created positions, and 
existing jobs maintained in the EO downstream sector. 

The  cumulative  growth  until  2030  in  comparison  with  2011  is  12.600  new  jobs  in  the 
downstream sector.   

Upstream and Midstream Direct Employment 

A  preliminary  estimation  of  the  related  job  impact  for  the  upstream  and  midstream  sectors 
has been performed, to be read in conjunction with the analysis done for the downstream, and 
as  a  complement  to  it.  The  estimation  is  based  on  the  application  of  three  scenarios 
representing  different  levels  of  Copernicus-related  funding  in  the  upstream  and  midstream 
sectors. The scenarios correspond to variations of the “Copernicus data continuity” options C 
and  D  outlined  in  the  Booz  &  Co.  Cost-Benefit  Analysis80.  The  high  scenario  implies  a 

79 

80 

See 
http://ec.europa.eu/research/horizon2020/pdf/press/fact_sheet_on_sme_measures_in_horizon_2020.pdf
. 
This study, performed in 2011 by Booz & Co. and SpaceTec Partners serves as an underpinning to the 
current  analysis  of projected programme  costs.  It  will  be referred  to  as “Booz  CBA”  in  this  text, for 

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funding  level  of  approximately  €  900  Mio  annually,  with  approximately  €  800  Mio  for  the 
medium scenario and € 700 Mio for the low scenario.  

The  same  methodological  principles  as  used  in  the  analysis  of  downstream  employment 
potential  have  been  applied  to  the  upstream  and  midstream  sectors,  using  relevant  industry 
productivity  measures  in  each  case.  The  preliminary  results  of  the  long-term  employment 
analysis  in  the  Copernicus  upstream  and  midstream  segments  provide  a  rough  order  of 
magnitude estimate of approximately 4.000 - 4.800 jobs to be maintained and created in 
total by 2030. 

Aggregate  jobs  maintained  and  created 
through COPERNICUS by 2030 

Cost 
Scenario 

Upstream 

Midstream  Total 

High 

3.500 

Medium 

3.300 

Low 

2.900 

1.300 

1.200 

1.100 

4.800 

4.500 

4.000 

Table  42:  Aggregate  Direct  Employment  Potential  (Rounded  N.  of  Employees/FTEs, 
2030) 

Aggregate Employment Impact 

The  total  impact  on  direct  employment,  in  terms  of  new  jobs,  is  calculated  by  subtracting 
the current estimated employment figures from the projected estimates. The High scenario is 
disregarded in each case. The table below summarises the aggregated results of the analysis 
for the downstream, midstream and upstream sectors.  

Aggregate Jobs Maintained and Created through Copernicus (No. FTEs) 

2030 Projection  

Upstream  Midstream Downstream 

Total 

(Theoretical 
High 
Maximum):  @100%  DS 
and 
potential 
market 
Copernicus 
data 
full 
continuity and scope 

Medium  (“Most  Likely”): 
@70%  DS  potential  and 
Copernicus 
data 
continuity  and  reduced 
scope 

full 

o
i
r
a
n
e
c
S

3.500 

1.300 

23.000 

27.800 

3.300 

1.200 

16.000 

20.500 

short. 
See 
http://ec.europa.eu/enterprise/policies/space/files/Copernicus/studies/ec_Copernicus_cba_final_en.pdf. 

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Low 
(“Minimum 
Boundary”):  @  40%  DS 
potential 
low 
Copernicus funding case 

and 

2.900 

1.100 

9.000 

13.000 

Current Baseline 

2.300 

3.400 

5.700 

Delta  Medium  Projection  vs 
Baseline (New Jobs) 

2.200 

12.600 

14.800 

Table 4: Total Estimated Impact on Direct Employment81 

The  aggregate 
approximately 15.000 new jobs across the entire Copernicus and EO value chain. 

level  of  direct  employment 

indicates  an  order  of  magnitude  of 

81 

Due  to  the  method  of  calculation,  it  is  not  possible  to  distinguish  between  upstream  and  midstream 
employment for the baseline.  

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Indirect employment effects are typically calculated using industry employment multipliers 
to estimate the effects of economic stimulus and job creation outside the immediate industry 
under consideration.  

The multiplier approach is based on the understanding that one job in the Space industry can 
support additional jobs in other sectors, in other industries or based on individual spending of 
Space  (application)  industry  employees.  Indirect  employment  is  likely  to  include  the  retail, 
financial and business services sectors, as well as manufacturing, and “induced” employment 
in retail and service industries. 

Specific multipliers for the Space industry were developed by Oxford Economics in 2009 in 
order  to  estimate  the  indirect  effects  of  increased  employment  in  the  Space  upstream  and 
downstream sectors in the UK. The additional employment is “supported through purchases 
of goods and services by companies in the Space industry, and from employment supported 
by  employees  in  the  Space  industry  (whether  direct  or  indirect)  using  their  income  to 
purchase  goods  and  services  for  their  own  consumption.”82  The  employment  multipliers7 
derived  for  the  UK  are  2,6  for  upstream  (2,6  jobs  supported  for  every  job  in  the  Space 
industry) and 3,2 for the downstream (3,2 jobs supported for every job in the Space industry). 
It  is  assumed  for  the  purposes  of  this  study  that  the  multiplier  for  the  midstream  is 
comparable  to  that  of  the  upstream;  since  no  specific  multiplier  is  available,  the  upstream 
multiplier will also be used for the calculation of the indirect employment of the midstream.  

Based  on  the  medium  scenario  above  (3.300  upstream  and  16.000  downstream 
maintained  and  created  direct  jobs),  the  analysis  suggests  that  approximately  63.000 
“indirect”  jobs  could  be  supported  in  industries  outside  the  Space  sector  in  the  year 
2030 (figures have been rounded up to the nearest hundred). 

Integrating  the  direct  employment  analysis  with  the  indirect  employment  analysis  based  on 
Oxford  Economics’  industry  employment  multipliers,  the  overall  employment  impact 
amounts  to  approximately  83.500,  including  jobs  maintained  and  created  in  the  wider 
economy, as summarised in the following table: 

Employment 2030 

Upstream 

Midstream 

Downstream  Total 

3.300 

1.200 

16.000 

20.500 

Economics 

2,6 

2,6 

3,2 

Total (New and Existing)  12.000 

8.700 

3.100 

4.300 

51.200 

63.000 

67.200 

83.500 

Direct 

Oxford 
Multiplier 

Indirect  

Medium 
Scenario 

Table 5: Total Direct and Indirect Jobs Estimate  

CONCLUSIONS 
A number of non-Space sectors benefit from Copernicus 

Source: Oxford Economics, The Case for Space, 2009.  

82 
Applied (Type II) employment multiplier is equal to (direct impact + indirect impact + induced impact) / direct impact. We have simplified it in the table to 
provide more intuitive reference for calculation. The following explanation is taken from the original Oxford Economics study:  “The number of 
dependent jobs in the supply chain is computed by assessing how many workers would be required in the supply chain to produce the amount of 
goods  and  services  demanded  by  the  space  industry.  To  calculate  the  number  of  jobs  supported  through  the  induced  impact,  we  model  the 
additional effect on domestic demand in the UK economy that salaries generate through consumer spending. This is then converted into jobs using 
average productivity across the economy." 

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The study identifies industrial sectors, which may benefit from Copernicus, and analyses five 
in  particular:  water  transport,  oil  and  gas,  non-life  insurance,  power  generation  from 
renewable  sources  and  agriculture.  Examples  of  practical  applications  are  solar  power  site 
selection  and  plant  monitoring,  damage  assessment  for  insurance  claim  management, 
precision farming and oil pipeline encroachment monitoring. These and many other examples 
of the use of EO data demonstrate that free and open Copernicus data provision is an essential 
driver for the creation of new business opportunities. 

Enabling factors are necessary for the realisation of market potential 

A number of existing activities are underway to support market growth. The implementation 
of  a  set  of  enabling  factors  would  ensure  that  the  identified  potential  can  be  assured,  in 
particular in the downstream segment: 

Regulation:  Free and open data policy; assurance of data  continuity; quality assurance and 
standards-building. 
Data  Availability  and  Access:  Simplified  access  to  Sentinel  datasets  at  ready-to-use 
processing levels (L1)83 for high-volume distribution, thereby responding to the needs of the 
value-adding industry, ideally avoiding the duplication of efforts at national level.  
Demand/Market:  Continued  dissemination  efforts;  regional/local  demand  incubation  and 
communication schemes aimed at commercial users; federation / consolidation of user needs 
and  industry  requirements;  further  integration  of  EO  information  as  a  supplement  to 
traditional systems.  
The  estimated  EO  Downstream  market  potential  attributable  to  Copernicus  is  €  1,8 
billion by 2030 

The estimated Earth Observation downstream services total market value potential is € 2.800 
Mio, of which € 2.600 Mio could be attributable to the Copernicus-enabled downstream, i.e., 
value-adding  activities  building  on  Copernicus  data  and  products.  This  is  based  on  the 
expected  stimulus  to  the  market  catalysed  by  the  free  and  open  data  policy  of  Copernicus. 
Projecting  the  addressable  market  potential  over  the  period  2015-2030  leads  to 
approximately € 1.800 Mio in downstream services turnover attributable to Copernicus 
by 2030, assuming the “most likely” medium scenario of 70% market potential fulfilment. 

Considering the Copernicus contribution along the Space value chain, Copernicus can 
be  seen  as  a  driving  force  for  creating  highly  skilled  job  opportunities  and  can  have 
indirect effects on the wider economy by 2030. 
Downstream:  Maintaining  and  creating  approximately  16.000  direct  jobs  cumulatively, 
provided  that  full  data  continuity  is  assured  for  Copernicus  in  the  long  term,  and  the  EO 
market potential is realised, with enabling factors in place.  
Upstream and Midstream: Maintaining and creating 4.500 direct  jobs under the Copernicus 
funding scenario option of full data continuity.  
An aggregate of 20.000 direct jobs will be created and maintained, of which 15.000 are new 
jobs, in total across the entire Copernicus and EO value chain. 
A high-level-analysis of potential economic multiplier effects (based on Oxford Economics’84 
Space  industry  multipliers,  provided  by  the  European  Commission)  suggests  that  63.000 
indirect  jobs  could  be  maintained  and  created,  yielding  an  overall  employment  impact  of 
approximately 83.000 jobs in Europe by 2030. 
Copernicus  demonstrates  that  ecological  and  economical  goals  can  be  mutually 
beneficial;  environmental  sustainability  can  promote  economic  development.  In  fact, 

83 
84 

L1 included geometric and radiometric pre-processing 
Oxford Economics (2009). 

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Copernicus  and  Earth  Observation  satellite  data  can  support  the  development  of  useful 
applications  for  a  number  of  different  industry  segments  (e.g.  agriculture,  insurance, 
transport, and energy) creating an appealing downstream/ value-added services market. 

Overall Conclusion 

The  European  Commission  has  commissioned  a  study  investigating  the  economic 
impact  of  the  Copernicus  programme  beyond  the  institutional  sector,  with  a  focus  on 
the  downstream  market.  Initial  results  show  that  Copernicus  is  not  only  a  monitoring 
tool for institutional needs, but can also stimulate economic growth and employment in 
a  wide  range  of  industrial  sectors,  leading  to  the  creation  or  maintenance  of 
approximately 20.000 direct jobs in Europe by 2030, if enabling factors are put in place. 
With highly skilled jobs in this sector typically impacting employment in other sectors, 
the economic stimulus by Copernicus could also result in a wider economic effect, with 
an  additional  63.000  indirect  jobs  secured  or  created  by  2030.  Overall  the  impact  on 
employment  from  Copernicus  is  estimated  at  approximately  83.000  jobs  in  Europe  by 
2030. 

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ANNEX VII: Summary of the Booz & Co's Cost-benefit Analysis on GMES 

1. Introduction & Assessment Approach 

Global  Monitoring  for  Environment  &  Security  (GMES)  is  a  joint  undertaking  of  the 
European  Commission,  its  Member  States,  the  European  Space  Agency  (ESA)  and  the 
European Environment Agency (EEA). It is an Earth Observation (EO) programme that seeks 
to  develop  operational  information  services  in  the  fields  of  environment  and  security. 
Through  investments  in  new  space  infrastructure,  the  programme  aims  to  create  an 
independent European capacity in EO. 

Booz  &  Company  was  commissioned  to  undertake  a  cost-benefit  analysis  of  the  GMES 
programme by the European Commission. The main focus of this study is the assessment of 
four  broad  funding  options  for  GMES  and  its  operational  services.  In  carrying  out  this 
exercise,  it  is  important  to  bear  in  mind  that  GMES  represents  a  unique  public  investment 
programme in that it is designed to support a wide array of public policy issues. Therefore, 
we have developed a strategic evaluation framework based on our understanding of the space 
and  EO  sectors,  and  the  role  EO  infrastructure  plays  in  supporting  the  implementation  of 
government policies aimed at better managing the environment and security. 

The  figure  below  provides  an  overview  of  the  process  we  have  followed  in  defining  and 
evaluating the impact of GMES at a strategic level, and how this can be used to support the 
assessment of the options. 

Approach to Evaluating GMES Impact & Investment Options 

Strategic Context

GMES Capability

(cid:131) Assess the strategic context for GMES
(cid:131) Critical developments in international and EU landscape
(cid:131)

Identify drivers for enhanced EO capability

(cid:131) GMES design definition
(cid:131) Addressing the technology gap and providing data continuity
(cid:131) Analysis of GMES service offering and operational development

GMES Impact

(cid:131) Define the strategic value of GMES
(cid:131) Strategic value linked to scope for step-change in capability and other 

improvements

GMES Strategy for
Option Assessment

(cid:131) Define the strategic focus of GMES as a basis for the assessment of options
(cid:131) Climate change as a top priority linked to step-change in capability
(cid:131) Support to EU policy and other operational needs in line with service offering

2. GMES Components and Services Domains 

The GMES system is composed of 3 main building blocks: (i) the Space component, (ii) the 
in situ component and (iii) the service component. 

The collection of EO data from space is the primary infrastructure component of GMES. In 
its  operational  configuration,  the  GSC  will  rely  on  data  provided  by  dedicated  GMES 
missions  (the  Sentinels),  as  well  as  Contributing  Missions  from  national  or  commercial 
providers.  

The in situ component is based on observation infrastructure owned and operated by a large 
number of stakeholders and coordinated by the European Environment Agency (EEA). The 
observation  means  include  ground-based,  airborne  and  ship-  or  buoy-based  sensors  and 
instruments. The need for in situ observation activities, and  associated infrastructure, stems 
from a range of national, EU and international regulatory agreements.  

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The service component refers to the evolving networks of service providers involved in the 
production and delivery of GMES services. GMES service provision is organised in terms of 
six  domains:  atmosphere  monitoring;  climate  change  monitoring;  emergency  management; 
land monitoring; marine; and security applications. These are described as follows: 

Climate  Change:  Monitoring  in  support  of  adaptation  and  mitigation  policies  through 
production of Essential Climate Variables (ECVs). 

Atmosphere:  Monitoring  atmospheric  chemistry  and  composition  to  contribute  toward 
ECVs, as well as measurement of European air quality 

Land Monitoring: Monitoring of land use to protect ecosystem and facilitate environmental 
protection and resource management. 

Emergency  Management:  Services  to  allow  better  coordination,  preparation  and  response 
from  natural  and  man-made  disasters.  This  includes  disaster  extent  and  damage  assessment 
maps, to support post-event recovery. 

Marine:  Ocean  forecasting  and  monitoring  to  contribute  to  ECVs,  monitoring  marine 
environments  and  contribute  to  maritime  navigation  by  creating  and  calibrating  three-
dimensional models used in prediction and forecasting. 

Security:  Use  of  EO  to  support  EU  external  actions  at  land  and  maritime  level  to  promote 
security. 

3. GMES Value-Added 

EO is seen globally as a critical source of data to enable monitoring and modelling of major 
issues of global importance using technology that removes many of the limits of national or 
localised  observation  systems.  GMES  is  Europe’s  contribution  to  the  Global  Earth 
Observation  System  of  Systems  (GEOSS),  which  itself  identifies  key  societal  benefits  that 
are the objectives of these systems including: 

Understanding,  assessing,  predicting,  mitigating,  and  adapting  to  climate  variability  and 
change; 

Reducing loss of life and property from natural and human-induced disasters; and 

Understanding environmental factors affecting human health and well-being. 

By providing the EU contribution to GEOSS, GMES provides a strategic role for the EU in 
Earth Observation by: 

Ensuring Europe remains a leading contributor to GEOSS and is recognised as such; 

Enabling greater collaboration between members of GEOSS, enhancing EU policy goals by 
ensuring access to information from global contributors; 

Enhancing  the  credibility  of  the  EU  at  international  negotiations  by  having  its  own  data 
sources in order to demonstrate its commitment to understanding the global environment; and 

Ensuring  the  EU  has  an  independent  source  of  information  to  guarantee  the  veracity  of 
information used for EU policy purposes at global and European levels. 

GMES contributes towards maintaining the strategic influence of the EU in important global 
policy areas. The GMES programme of dedicated satellite capacity (the Sentinels), have been 
designed  to  augment  existing  satellite  and  in-situ  data  sources.  In  total,  the  Sentinels  will 
make a significant contribution to the collection of Essential Climate Variables (ECVs) that 
provide input to climate models to forecast future climate change scenarios. In addition, the 

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collection of new data on atmospheric, marine and land conditions can support a wide range 
of policies at European and national level. 

Given that climate change is a top priority goal of the EU, with the European Climate Change 
Programme (ECCP) and the EU commitment to achieving multilateral agreement on climate 
change within the auspices of the United Nations Framework Convention on Climate Change 
(UNFCCC),  it  is  apparent  that  the  most  significant  impact  of  GMES  will  be  to  collect 
observations  to  enhance  the  modelling  of  future  climate  change  scenarios.  This  will  enable 
greater  confidence  in  these  forecasts  which  will  impact  on  strategies  for  mitigation  of  and 
adaptation to climate change, and support EU positions at international negotiations. 

In addition to supporting the EU global and internal efforts to mitigate and adapt to climate 
change,  the  GMES  programme  will  enhance  the  EU’s  understanding  of  and  options  to 
respond  to  other  key  policy  areas  of  environmental  impact.  The  EU  has  a  wide  range  of 
policy  initiatives  and  strategies  directly  related  to  the  environment,  including  the  Europe 
2020 Strategy and the EU Sustainable Development Strategy. In particular, GMES can assist 
in understanding and taking steps towards objectives in a number of areas including: 

Biodiversity (e.g. deforestation, desertification, threats to sensitive ecosystems) as expressed 
through the Biodiversity Action Plan; 

Promotion  of  improvements  in  air  quality  in  Europe  to  improve  public  health  through  the 
Clean Air for Europe programme; 

Prediction, response and reconstruction associated  with major natural disasters (through the 
Space and Major Disasters Charter and the Community Civil Protection Mechanism); 

Improved targeting of humanitarian aid and assistance programmes to developing countries; 
and 

Better compliance with funding from the Common Agricultural Policy. 

Investment in GMES infrastructure also contributes to the EU’s industrial policy, by helping 
to develop the EU space sector and by facilitating the development of a downstream sector 
which  can  take  advantage  of  new  data  series  to  sell  services  to  end  users  on  a  commercial 
basis.  This  supports  the  EU’s  endeavours  to  promote  economic  growth  and  employment, 
based on new technologically-led industries that have an environmental focus. 

4. Economic Value of GMES 

As  GMES  is  a  major  EU  effort  to  enhance  our  understanding  of  Earth  science,  the  main 
benefit  of  GMES  will  be  the  value  of  information  it  provides  to  support  policy  action  and 
resource management across the EU and further afield. The value of information depends on 
a  number  of  factors  regarding  the  circumstances  of  decision  makers,  including  the  level  of 
uncertainty that they face, what is at stake, the cost of using information, and the cost of the 
next-best information substitute. A review of academic literature supports the view that there 
is inherent value in information. Based on this review, there are valid reasons to suggest that 
the  overall  extent  of  the  VOI  is  incremental.  As  such,  GMES  has  the  potential  to  deliver 
significant economic value through enhanced EO information.  

5. Approach for the Quantified Cost-Benefit Assessment 

The approach supporting the cost-benefit analysis combines an understanding of timing (e.g. 
when services are operational and the build-up period before benefits fully materialise), the 
level  of  actual  benefits  realised  (e.g.  the  degree  to  which  service  guarantee  and  level  of 
investment  in  developing  and  promoting  services  impact),  the  programme  itself  (e.g. 

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infrastructure  capability  and  availability),  and  most  importantly  the  explicit  level  of  impact 
placed on the value of information provided to decision makers and market actors. 

Four options have been assessed:  

Option A (Baseline Option);  

Option B (Baseline Option Extended);  

Option C (Partial Continuity); and  

Option D (Full Continuity). 

Each option contains profiles of investment in infrastructure (space, in situ), services and user 
take-up.  The  analysis  is  supported  by  a  comprehensive  review  of  GMES  services  to  take 
account of the level of foreseen operations by 2014. It has provided a strong basis for setting 
a service baseline for 2014, and demonstrates where additional funding is required to reach 
operational  maturity.  The  outcome  is  specific  assumptions  for  each  benefit  area  covering 
operational readiness and time to full maturity. The quantification of benefits is based on an 
approach that attributes to GMES an incremental improvement in outcomes, e.g. measured as 
a change in baseline environmental damage costs. This  recognises that outcomes consist of 
several factors, of which the contribution by GMES is only one part.  

6. Cost-Benefit Analysis 

The  study  has  confirmed  through  qualitative  and  quantitative  analysis  that  GMES  has  the 
potential to be developed into a powerful tool for the EU. GMES enables the EU to engage 
positively at the global level, but also to work towards achieving EU-wide policy objectives. 
The quantified cost-benefit analysis assesses four broad funding options. 

Key  results  for  each  of  the  four  options  are  presented  in  the  figure  below.  It  shows  total 
benefits,  total  programme  costs  and  the  associated  net  benefits  over  the  2014  –  2030  time 
period  of  the  assessment.  Results  are  cumulative  undiscounted  and  discounted  at  4%  per 
annum. All values are expressed with 2010 as the base year. 

The analysis has demonstrated the value of remaining committed to the GMES programme. 
Option A with no on-going commitment to replace infrastructure or investing significantly in 
services  is  the  one  with  the  lowest  net  benefits.  Increasing  levels  of  commitment  to  the 
programme,  supported  with  increasing  investments  in  Sentinel  Missions,  and  hence 
improving service guarantees, provide increasing levels of benefits. This is demonstrated in 
Options B and C, although the step-change in Option C is also associated with a much higher 
level  of  benefits.  However,  Option  C  only  provides  partial  continuity  as  data  from 
Contributing Missions is not guaranteed. This is addressed through Option D where there are 
additional  investments  to  provide  a  full  continuity  of  data  from  Sentinel  and  Contributing 
Missions.  

In the case of Option D, the figure shows the cumulative build-up of benefits and costs over 
time in discounted terms. Option D enables the capture of a full range of potential benefits 
from  investing  in  GMES,  including  those  relating  to  the  development  of  a  comprehensive 
long-term response within the climate change domain (accounting for 40% of total benefits). 
The option also provides a strong basis for achieving the EU key strategic policy objectives, 
including securing GMES within the context of industry policy and the wider economy. 

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Figure 6 

Option D – Cost-Benefit Analysis, € billion, 2010 prices 

Source: Booz & Company analysis. 2011 

Option  D  will  provide  the  space  and  downstream  sectors,  including  SMEs,  a  basis  for 
developing capabilities and competitiveness within the sector. These advantages can support 
future  industrial  development  and  support  a  strong  positioning  in  comparison  with  non-EU 
competitors  and  firmly  secure  the  EU  EO  sector  in  the  longer  term.  In  particular,  it  is 
important  for  businesses  –  and  actors  in  general  -  to  have  sufficient  confidence  that 
investments  are  supported  by  a  long  term  funding  commitment.  If  this  is  not  in  place,  it  is 
most  likely  that  benefit  realisation  will  fall  short  of  expectations,  particularly  in  relation  to 
realising benefits from climate change action. It is only through guaranteeing the continuity 
of data that this is secured. 

However,  it  remains  clear  that  Option  D  requires  the  EU  to  make  a  substantial  –  and 
sustained  -  funding  commitment  over  a  long  time  period.  Option  D  represents  a  significant 
step-change  in  commitment,  and  provides  a  basis  for  establishing  GMES  as  a  key  tool  to 
inform climate change mitigation and adaptation. However, given the overall uncertainty on 
key parameters, further careful consideration may be required. It is possible to gauge the wide 
range  of  potential  outcomes  from  the  following  figure,  which  illustrates  the  range  from  € 
10.300 Mio to € 50.800 Mio from varying the assumed GMES contribution, with the black 
line in the middle of range showing the Central Case projection. The range for benefit-cost 
ratios is 1.9 – 5.4. 

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Option D – Low, Central and High Case net Benefits with + / - 50% change in GMES 
Benefits for 2014 - 2030, € billion, 2010 Prices, Cumulative, Discounted 

Figure 7 

Source: Booz & Company analysis. 2011 

Sensitivity analyses have been used to compare results to the Euro-GEOSS FeliX model and 
the PWC study of socio-economic benefits of GMES. The FeliX model is shown to generate 
benefits that are substantially higher (up to 2.9 times more than in Option D). It illustrates a 
potential up-side scenario to investing in GMES. Furthermore, total benefits projected in the 
current  study  are  shown  to  be  lower  by  2030  than  in  the  PWC  study.  However,  the  PWC 
study assumed the majority of benefits to start from 2011. Comparing the results of this study 
with a PWC benefit projection on a comparable basis (i.e. take-up from 2014), it is actually 
possible  to  demonstrate  a  higher  result  by  2030.  Overall,  these  findings  provide  some  key 
reference points for interpreting the results and validating the findings of this study. 

Finally, it should be stressed that this study represents a first attempt at placing the benefits of 
GMES within the context of different investment options. It may have provided an objective 
basis  for  selecting  a  preferred  option.  However,  it  remains  clear  that  additional  option 
refinement and cost-benefit assessment work is required to optimise any option. 

7. GMES Benefit Enablers 

For the full potential of GMES to be realised, some key enablers need to be addressed in the 
short term. Without resolution of these issues, GMES may still develop and expand its role 
(and benefits), but there are risks of higher costs, reduced uptake by public sector users and 
growth  from  the  downstream  sector.  If  these  risks  are  not  carefully  managed  then  a 
substantially  lower  benefit  profile  may  eventuate.  These  issues  have  been  highlighted  by 
stakeholders, both public and private sector.  

The key steps that should be taken to enable the potential of GMES include: 

Incorporating  a  more  central  role  for  users  in  strategic  development  of  the  GMES 

programme; 

Development  of  a  strategic  approach  to  the  downstream  sector  to  catalyse  engagement  and 

interest, and gain feedback on key priorities for that sector; 

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Development of a longer term funding and financing strategy that enables procurement and 

contracting arrangements to go beyond the FP funding periods; 

Development of a long term data policy that addresses issues of intellectual property, privacy, 
data  archiving,  access  policy  and  relationships  with  Contributing  Missions  and  in-situ 
locations; 

Further definition of the selected option, with an ongoing process of optimising expenditure 
on infrastructure and services, with a dynamic view of benefits and priorities over time; 
and 

Determination  of  ownership  and  operational  control  of  the  Sentinels  after  they  have  been 

deployed. 

In this context, programme governance is identified as a top priority. GMES requires strong 
strategic  leadership,  with  a  programme  approach  that  is  dynamic,  has  a  professional  risk 
management strategy and will engage with users and the downstream sector in the ongoing 
development  and  delivery  of  its  programme.  It  should  be  focused  on  delivering  across  the 
high  impact  benefit  areas  such  as  climate  change,  environmental  policy  and  facilitating  the 
development of the downstream sector.  

If governance is addressed, it can also provide a strategic foundation for the EU developing 
GMES as a world-class, leading base for EO with a downstream sector that is growing to its 
potential. Given the sheer scale of investment involved, it would be in the best interests of the 
EU to maximise the potential return from this, and to take GMES from being an interesting 
research  and  development  project  that  is  delivering  useful  services,  to  being  seen  as  an 
invaluable contribution to a wide range of public policy and private purposes. It can do this 
with a body that is empowered, strategically focused, user oriented and dynamic. 

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ANNEX VIII: The FeliX Model 

The FeliX model, which stands for Full of Economic-Environment Linkages and Integration 
dX/dt,  is  a  dynamic  and  integrated  approach  to  identifying  and  quantifying  the  benefits  of 
GEOSS. It is provided through the application of systems dynamics models. Developing such 
a model and carrying out simulations of different EO scenarios was a main output from the 
GOE-BENE  project  and  is  being  continued  and  refined  as  part  of  EuroGEOSS.  This  work 
included  the  development  of  a  systems  dynamics  model,  which  can  be  used  to  test  the 
potential impacts of GEOSS. 

Figure 8: FeliX Model Overview 

Source: GEO-BENE Deliverable D10(T30) - Draft GEO-BENE Synthesis Report 

the  complex 
The  benefit  of  systems  dynamics  modelling 
interdependencies  between 
the  earth’s  various  social,  economic  and  environmental 
subsystems.  Under  this  approach,  a  series  of  interrelated  systems  models  are  connect  via  a 
series of feedback loops such that changes in one model or subsystem has consequences for 
other subsystems. 

it  recognises 

that 

is 

The  FeliX  model  represents  these  relationships  at  a  global  level,  with  subsystems  models 
representing  various  relationships  for  and  between  production  and  consumption  variables 
including,  land,  energy,  the  development  of  technology,  the  economy,  population  and  the 
carbon cycle, etc. A high level representation of the sub-models and interrelationships in the 
FeliX  model  is  shown  in  the  figure  above.  Under this approach, each  of the GEOSS SBAs 
have been embedded into the model’s subsystems. Stocks (e.g. population, knowledge) and 
flows  (e.g.  birth  and  death  rates,  learning  and  forgetting,  etc.)  are  modelled  through  causal 

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relationships and crucial feedback loops to establish linkages between each of the key sectors 
of a global socio-economic and environmental system.85 

The model represents these causal relationships and linkages at a global level and the model 
has  been  calibrated  using  100  years  of  statistical  data.  This  data  reveals  that  there  are 
relatively stable long-term relationships between the key variables that have been included in 
the  model.  The  model  can  then  forecast  changes  in  production  and  consumptions  under  a 
base scenario (i.e. with no change to GEOSS capability) and a set of scenarios that assume 
various  enhancements  to  GEOSS  that  support  an  improved  output  in  the  model’s 
subsystems86. 

85 
Each sector is represented using a model module that is based on widely accepted modelling structures.  
For  example,  the  economy  model  is  based  on  neo-classical  growth  theory  that  separately  considers  capital 
accumulation and labour, and includes factors to capture their levels of productivity. As another example, world 
population  is  modelled  as  an  ageing  chain.  Linkages  between  the  models  are  provided  via  feedback 
mechanisms. For example, climate change and its impacts are represented in the economy model, etc.  
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A FeliX model simulator is publicly available on the GEO-BENE website, see www.geo-bene.eu 

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ANNEX IX: Comparison of the PwC 2006 study and Booz & Co's 2011 study 

Previous effort to quantify the benefits of GMES was performed by PwC in 2006. The results 
are summarized in the figure below: 

PWC Study - GMES Total Benefits, € billion, 2010 Prices, Cumulative, Discounted 

Figure 9:  

Source: Booz & Company analysis. 2011 

All values have been adjusted to 2010 prices and discounted to 2010 by Booz & Company to 
enable the comparison with the results of the latest CBA study. 

The PwC study generates substantial benefits for the time period up to year 2030 (€ 46.800 
Mio).  

The  recent  Booz  &  Company  study  projects  €  32.700  Mio  of  total  benefits  in  Option  C 
scenario  (30%  reduction  compared  to  the  PwC  assessment)  and  €  36.700  Mio  in  Option  D 
(22% reduction compared to the PwC assessment), both for the 2014-2030 time period.  

Booz & Company projects reduced total benefits from the GMES programme, as illustrated 
in the figure below. PwC's study result are impacted by the assumption GMES programmes 
will be developed enough and operational from 2011, thus will start to cumulate benefits.  

More appropriate method to compare the benefits assessed in the two studies is by delaying 
PwC's  benefit  projection  quantified  by  three  years  (see  "PwC  delayed"  curve).  Making  the 
assumption that benefits come into effect from 2014 and not from 2011 significantly impacts 
the  final  results.  PwC's  "delayed"  benefit  projection  by  2030  equals  €  27.500  Mio  and  is 
therefore lower than both Option C and Option D projections in the Booz & Company study.  

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This confirms the high socio-economic value of the GMES programme. 

Figure 10: 

Cumulative Total Benefits Options C, D, PWC, and the delayed PWC Profile, 

€ billion, 2010 Prices, Discounted 

Source: Booz & Company analysis, 2011. 

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ANNEX X: GMES programme - overview of programme evolution and funding until 
2013 

Situation until 2013 

GMES/Copernicus is currently financed at European, intergovernmental and national levels, 
based on partnerships among the different players. The EU does not finance the totality of the 
cost  of  the  development  and  operations  of  all  the  space  based  and  the  in  situ  installations 
providing data for the GMES/Copernicus services. GMES/Copernicus is set up in partnership 
with  the  Member  States87.  The  EU  will  rather  concentrate  on  domains  where  an  EU-
intervention will provide a clear added value. 

The  EU  will  both  coordinate  these  partnerships  and  manage  its  own  contribution  to 
GMES/Copernicus, which consists of development activities and an operational phase. 

Regarding development activities, this contribution currently consists, in particular, of the co-
financing of research activities under FP6 and FP7: 
•  a  co-financing  of  space  infrastructure  developments88  that  are  carried  by  the  European 

Space Agency (ESA) in order to fill gaps in existing space infrastructure; 

•  in situ research; 

•  funding of pre-operational demonstrator services. 

Within FP6, the EU has spent € 100 Mio on GMES/Copernicus projects, whereas ESA has 
invested another € 100 Mio in the GMES/Copernicus Service Elements projects. In the space 
theme  of  the  specific  programme  "cooperation"  of  FP7,  the  EU  will  make  available 
approximately € 430 Mio for GMES/Copernicus service projects and procurement of data for 
these Services between 2007 and 2013. Additionally, € 624 Mio from the space theme of FP7 
have been and  will  be used  to contribute to the development of the ESA Space component 
programme,  which  amounts  to  €  2.246  Mio  in  total  (including  funds  contributed  by  ESA 
Member States).  

First  operational  activities,  in  particular  in  the  field  of  emergency  management  and  land 
monitoring, are financed under the GMES/Copernicus programme and its initial operations in 
addition to some other operational elements in the land domain (Corine Land Cover, Urban 
Atlas). Funds allocated to initial operations are € 107 Mio. Other services such like marine, 
atmosphere, security and climate change are financed through FP7. All of these services are 
close to operational status. 

Europe  and  the  Member  States  have  invested  significant  resources  in  the  development  of 
GMES/Copernicus  space  infrastructure  and  pre-operational  services  in  order  to  ensure  an 
uninterrupted  provision  of  accurate  and  reliable  data  and  information  on  environmental 
issues,  climate  change  and  security  matters  to  decision  makers  in  the  EU  and  its  Member 
States.  This  information  is  needed  by  public  authorities  in  the  Member  States  and  regions 

Existing space missions that will provide data for GMES include Spot, TerraSAR-X, EUMETSAT 

87 
satellites, CosmoSkymed, DMC Deimos, Ikonos, GeoEye, Quickbird, and ENVISAT.  
88 

ESA is currently developing 5 "Sentinel" missions under its GMES Space Component Programme. 

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who are in charge of the policy conception and implementation. The Commission also needs 
this  information  for  evidence  based  policy  making  and  monitoring.  As  a  total,  the  EU  has 
spent/earmarked  about  €  3.200  Mio 
initial  operations  of 
GMES/Copernicus. But GMES/Copernicus also makes use of infrastructure (satellites, in-situ 
networks, ICT capacities, etc…) existing and financed at National level worth several billion 
euros and of international mechanisms of cooperation. 

for  development  and 

Continuous and significant financing efforts have been made by GMES stakeholders, namely 
the  EU  (through  Framework  Programmes  for  Research  and  Development,  Preparatory 
Actions),  ESA  Member  States  (GMES  Space  Component  Programme,  Earth  Watch  and 
GMES  Service  Elements,  Earth  Observation  Envelope  Programme),  together  with  direct 
contributions  from  Member  States  and  European  organisations,  for  the  development  of 
services,  the  access  to  space  and  in  situ  data,  and  for  the  construction  of  a  dedicated 
observation infrastructure.  

With  the  entry  into  force  of  the  European  Earth  monitoring  programme  (GMES)  and  its 
initial operations (2011-2013) on 9 November 2010, GMES is now entering into a new phase 
with a dedicated operational budget. 

This document provides an overview of the overall funding of GMES since the early stage of 
the initiative (1998 Baveno Manifesto) until the end of 2013.  

Mobilising funding resources  

1st phase: 2000-2006: designing the concept of GMES 

Different financial instruments have been mobilised depending on the nature of the activities 
to be funded for GMES.  

On the EC side, preliminary thematic projects and networks have been supported by the 5th 
Framework  Programme  for  Research,  Technological  Development  and  Demonstration.  The 
first  concrete  steps  started  with  the  development  of  the  pre-operational  GMES  fast  track 
services  (2004-2006)  using  available  funds  from  EC/FP6  Space  &  GMES  Theme  (€  100 
Mio).The  first  ESA  activities  in  support  to  GMES  were  adopted  at  the  ESA  Ministerial 
Council  in  November  2001  (e.g.  Earth  Watch  proposal  and  GMES  Service  Element).  The 
ESA  contribution  through  the  GMES  Service  Elements  amounts  to  €  130  Mio.  Additional 
studies were launched by ESA for the GMES space component (€ 30 Mio) 

2nd phase: 2007-2013: from concept to reality 

The EU contribution for this period comes from four sources: 

–  FP7:  Under  the  Seventh  Framework  Programme  for  Research  (FP7),  2007  –  2013  the 
European  Commission  has  made  €  1.400  Mio  available  in  support  of  space  related 
activities,  out  of  which  about  85%  was  made  available  for  GMES,  with  a  split  between 
services  and  the  space  component  (€  365  Mio  and  €  624  Mio  at  current  economic 

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conditions for the services and for the space component respectively, and € 9 Mio for the 
in situ component); 

–  GIO: The GMES Regulation on the Initial Operations provides an operational budget of € 

107 Mio; 

–  Preparatory  Actions:  some  €  10  Mio  have  been  made  available  for  funding  operational 

activities in view of the implementation of the GMES Regulation; 

–  DG  REGIO:  additional  funding  was  made  available  by  DG  REGIO  for  supporting  the 

development of the Urban Atlas.  

Details of the FP7 and GIO appropriations are presented in table 1. 

ESA contribution 

On its side, ESA received contributions from its Member States for the following activities: 

–  € 1,621 Mio (2008 e.c.) for the GMES Space Component (for both segments 1 and 2);  
–  € 32 Mio for further developing some GMES Service Element projects; 
–  And € 75 Mio for the Climate Change Initiative. 

Space Component 

The space component includes:  

–  The construction, launches and operations of Sentinel satellites or instruments developed 

specifically for GMES; 

–  The  GMES  Space  Component  Data  Access  (GSCDA)  which  is  composed  of  an  access 
infrastructure  and  a  data  buy  mechanism  enabling  the  access  to  GMES  Contributing 
Missions (GCM) developed and operated outside GMES. 

The  total  development  cost  of  the  GMES  Space  Component  is  €  2,300  Mio  (2008  e.c.)  of 
which ESA Member States provide 72% and the EC 28%. 

According  to  the  GSC  Programme  Declaration  adopted  at  the  CMIN’08  Segment  1  and 
Segment 2 have been merged into a unique set of activities.  

Other contributions 

Other  contributions  should  be  taken  into  consideration  for  consolidating  the  overall  past 
funding of GMES, namely: 

–  Member  States  with  their  in  kind  contribution  of  in  situ  data  which  can  be  estimated  at 
more than € 300 Mio/year, and their respective national space programmes which leverage 
the access to the GMES contributing missions; 

–  FP consortia who participated to GMES projects with a share of approximately half of the 

EC contribution, thus in the order of € 230 Mio for the whole period until 2013; 

–  Intergovernmental  agencies  such  as  EUMETSAT  and  ECMWF  who  provide  access  to 
some of their infrastructure, skills and data at no cost for GMES (e.g. computing facilities 
at ECMWF, meteorological data…); 

–  Other Commission services (DG ECHO, DG ENV, DG JRC…) who provided additional 

funding to GMES related activities (e.g. CORINE Land Cover, EFAS, …). 

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Global overview 

–  As a whole, the overall funding made available until 2013 by the EU and ESA has reached 

over € 3.000 Mio (table 2): 

–  For  the  in  situ  and  service  components:  the  EC  provided  funding  above  €  520  Mio, 

completed by € 240 Mio from ESA; 

–  For the space component, ESA made some € 1,650 Mio available and the EC € 780 Mio 

(FP7 and GIO funding).  

Access to space data has been supported by dedicated FP7 budgets with € 48 Mio through a 
FP7  grant,  completed  by  €  53  Mio  as  part  of  the  EC/ESA  Delegation  Agreement,  and 
additional € 43 Mio from FP7 as a complement to the GIO budget. 

A summary is given in the following table: 

M€ (2000-2013) 

ESA 

EU 

others 

Sentinels 

Data Access 

1,651 

632 

Access infrastructure 

Data buy 

Services 

Core Services 

other FP7 

GSE+CCI 

- 

- 

- 

- 

237 

9 

40 

104 

262 

256 

- 

Total 1,888* 

1,303* 

In-situ 

~116 (FP7 consortia) 

~120 (FP7 consortia) 

- 

(*): figures are not fully comparable since ESA figures are based on 2008 e.c. and EC figures 
on  c.e.c.  Readjusting  the  table  to  2008  e.c.  would  reduce  the  EC  contribution  with  a  factor 
related to the inflation rate. 

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Table 1: overview of the funding made available under FP7 and GIO for the period 2007-2013 

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