COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the dissemination of Earth observation satellite data for commercial purposes
Date: 2014-06-17
Institutions: European Commission
Subjects: data processing, dissemination of information, marketing standard, satellite













EUR-Lex - 52014SC0184 - EN











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52014SC0184

COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the dissemination of Earth observation satellite data for commercial purposes /* SWD/2014/0184 final */









COMMISSION STAFF WORKING DOCUMENT
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Accompanying the document
Proposal for a Directive of the
European Parliament and of the Council
on the dissemination of Earth
observation satellite data for commercial purposes
Disclaimer:
This executive summary commits only the Commission's services involved in its
preparation and does not prejudge the final form of any decision to be taken by
the Commission.
1.           Problem  Definition
(a)                   
Background
The present Impact Assessment examines the
obstacles to market development that stem from the fact that high resolution
satellite data (HRSD) today is regulated in different ways by EU Member States,
and the options to overcome those obstacles to the free circulation of satellite
data, while preserving security interests. 
The stakeholders’ consultation, including
data resellers and value-adding service providers (VAS), revealed that at
present the development of the HRSD market is thwarted by the lack of
transparency, predictability and equal treatment which is the result of
fragmented regulatory frameworks applicable to HRSD in Member States. At
present, there is no such a thing as a common market for HRSD.
(b)                   
Most affected businesses
Data-providers: While they perceive market
development as an opportunity, a more transparent framework that opens the
possibility for others to enter the data provision business could be a threat. Yet
on the other hand, their business is affected negatively by the existing or
pending regulatory barriers as these mainly occur on the stage of dissemination
of HRSD from data providers to data resellers and VAS.
Data resellers/VAS: Their business is
constrained by the effects of a fragmented regulatory framework for HRSD
limiting the free circulation of HRSD. By far the majority among them (99%) are
SMEs/micros particularly well equipped, due to their flexibility, to innovate
on the basis of the raw data and provide a wide range of services and products
based on HRSD. 
End users businesses: They are affected by
the constraints experienced by data resellers in terms of (timely) availability
of HRSD. 
(c)                   
Need for public intervention
Three Member States (i.e. Germany, France and Italy) have so far developed civil or dual-use satellite systems that are
capable of generating HRSD and have put in place regulatory regimes to enable
the distribution of potentially sensitive data to the commercial market.
However given the lack of a consistent
approach, these individual frameworks contain gaps and differences which
constrain the development of HRSD market. At least two more countries, United Kingdom and Spain, will develop HRSD technological capabilities in the nearest future. Others
may follow. As the number of Member States with HRSD capacity increases; the
emergence of ever more fragmented regulatory frameworks is likely to aggravate
the described problems. 
Control of HRSD distribution is necessary
for security reasons. Member States which have jurisdiction over high
resolution satellite systems have put in place different regulatory frameworks
to control HRSD which have a negative impact on the development of HRSD market
and also can lead to security shortcomings. There is consensus that public
intervention at EU-level to approximate certain core aspects of these
regulatory frameworks can alleviate these problems.
2.           Analysis of subsidiarity
The problems identified hinder the
development of an EU internal market in the domain of satellite data.
Consultations lead to the conclusion that an internal market for HRSD does not
exist today. The basis for EU action is Article 114 TFEU, which deals with the
approximation of laws of the Member States in order to achieve the objectives
of Article 26 TFUE, namely, the proper functioning of the internal market. 
The choice of Article 114 TFUE is justified
by the need to delimit the internal market in HRSD and ensure the free
circulation of satellite data based products and services across EU. 
The Union action envisaged in this report
complies also with the subsidiarity principle for the following reasons: 
–                        
National initiative alone will not ensure a
coherent legal framework for the dissemination of satellite data. A coherent
framework can only be achieved by concerted action by Member States within the
EU or action at EU level.
–                        
An EU approach is the only way that will allow
private businesses in the value chain to benefit from the opportunities offered
by the EU internal market by creating a transparent, predictable and fair legal
framework guaranteeing the principle of free circulation.
The options envisaged, relying on a
flexible approach of a limited alignment of key regulatory elements, do not go
beyond what is strictly necessary to attain the goal of the initiative. Therefore,
it can be confirmed that the initiative also complies with the principle of
proportionality.
3.           Objectives
The general policy objective of this
initiative is to foster growth of the Earth observation (EO) markets in Europe,
in particular the services market, to foster competitiveness of the EU
EO-sector and to foster the competitiveness of EO-user-businesses in Europe. More specifically it seeks to facilitate the dissemination of HRSD in Europe while fully safeguarding security interests, to establish a more reliable access to
HRSD, a good and sufficient level of information on accessibility of HRSD for
VAS/data-resellers and customer businesses, and to facilitate competition at
data provider level. These objectives all aim to foster the internal market on
HRSD. The operational objective is to establish the core elements needed for
the realization of the full commercial potential of HRSD and in particular to
facilitate the dissemination and access to HRSD:
–                        
by introducing a common definition of HRSD, specifying
which satellite data could by security relevant and which is “business-ready”, 
–                        
by introducing common standards on transparency,
predictability/legal certainty and fair treatment and;
–                        
by introducing common standards on efficiency
and business-friendly implementation in particular with respect to the
procedures to follow.
4.           Policy Options
This impact assessment identifies three
options – in addition to the baseline scenario – that seek to achieve the
objectives by setting up a legal framework for the handling and dissemination
of high-resolution Earth observation data in the European Union: 
Option 1: Baseline scenario
Option 2: Recommendations and guidelines
(OMC)
Option 3: Basic legislative instrument
Option 4: Extended legislative instrument 
Option 1 would
entail that no common framework would be established and as more Member States acquire
HRSD capacity and establish their own national ones further fragmentation is
likely to occur.
Option 2,
the Open Method of Coordination (OMC), could be used to coordinate national
policies in the field of HRSD in order to achieve common objectives. 
This option would seek to establish a coherent
legal framework for HRSD in Member States, while the Commission would have a
coordination role.
However, this process might take a long
time before producing its effects.
Similar results can be achieved by a
recommendation issued by the COM which could also result from an OMC, though a
vast majority of Member States have explicitly stated during the consultation
process their lack of confidence in the efficiency of this option on security grounds
and the lack of guarantees for reciprocity incompliance.
For these reasons, a Commission
recommendation was discarded from the options.
Option 3 involves
legislative action at EU level for the approximation of essential components of
the national regulatory frameworks applicable to HRSD distribution: 
This legislative action would cover:
–                        
The establishment of common technical parameters
defining HRSD;
–                        
The elaboration of common criteria for a
screening procedure, to be further specified by Member States in order to
determine whether HRSD needs to undergo an authorisation procedure;
–                        
The definition of certain standards for an
authorisation procedure;
–                        
The introduction of the principle of free
circulation of HRSD controlled at first dissemination by another Member State of the EU in accordance to the applicable procedures, as far as the scope of
the screening/authorization is respected.
Option 4 is
based on the same elements as option 3 but also includes the establishment of
common criteria for licensing for HRSD providers (licences to be issued by
national authorities). The common criteria would include:
–                        
The technical and organizational measures to
prevent access to unauthorized third parties to the installations used for
receiving, processing or storing data produced by a high-performance earth
remote sensing system;
–                        
The measures to protect the inadvertent
disclosure of HRSD to unauthorised parties when data provider transmits data
between different facilities under its control or to another data provider;
–                        
The measures to secure dissemination of the data
generated by a high-performance earth remote sensing system;
–                        
Security clearance requirements for personnel
having access to command facilities used for receiving, processing, storing and
delivering HRSD.
5.           Assessment of Impacts
In contrast to option 1, options 2, 3 and 4
aim at establishing a coherent and clear legal framework for HRSD across Europe based upon a number of core elements, the difference laying in the type of
instrument chosen and the scope of the EU intervention envisaged. They would
however differ in terms of efficiency and effectiveness, administrative burden
and the timing. 
Options 2 – 4 would have positive economic
impacts due to higher level of transparency, legal certainty and business predictability.
They will generate positive effects for the establishment and exercise of
businesses, fostering the emergence of an internal market for HRSD, enhancing
the competitiveness of EU businesses in relation to competitors from third
countries, an issue of special relevance for the most vulnerable segment of the
HRSD business sector – SMEs/micros. 
Besides direct job growth in the data
reseller/value-adding-service (VAS) businesses and data providing businesses,
additional job growth at other levels of the value chain is probable (i.e. HRSD
user businesses, satellite manufacturers and operators), as a result of higher
quality services and more competitive prices. Furthermore additional indirect
job growth is also expected, as the creation of 1 new job in the space industry
leads up to 5 new jobs in other sectors.
Another issue that should be highlighted in
particular in terms of impacts is the importance of a coherent HRSD policy for
improvements in policy areas, where HRSD products and services are heavily in
use, e.g. security and defence, local and regional planning, environmental and
climate monitoring or emergency services. To give an example discussed during
the consultation, a considerable share of the HRSD products and services is
used in environmental monitoring. Therefore any improvement as to the quality
of these services could foster the achievement for example of the ambitious EU
climate change goals by providing cost-efficient and precise worldwide
monitoring of greenhouse gases and biomass.
A proper-functioning of the EU internal
market for HRSD will also have a positive impact on the availability of data
that may be used for other socially commendable objectives for example,
educational or research applications.
The following table was produced to give a
short summary on the detailed impacts of the different options:
   || Economic || Administrative cost/burden || Strategic and political || Social 
 Option 1: Baseline scenario || Obstacles to economic development of the sector due to: - lack of transparency - barriers to trade - lack of business predictability - lack of competition || No additional administrative burden. || Different approaches could have negative impact on security. || Job creation potential not fully exploited. Limited data availability for use and applications. 
 Option 2: Recommendations and guidelines[1] || Positive economic impact due to higher level of transparency, business predictability and legal certainty (free circulation of HRSD). Positive effects for the establishment and exercise of businesses. Emergence of an HRSD internal market. || For Businesses: Less bureaucratic barriers for industry and less effort necessary to deal with national regulations. For Member States: There would be negligible additional administrative costs.   || MS would align their legislations, strategic interests of the Union will feed this dialogue and there will be an improvement in the degree of protection of such interests. || Potential for considerable job creation. Better availability of HRSD for applications. 
 Option 3: Basic legislative instrument || Similar as in option 2. In addition, option 3 likely to deliver solutions faster and would have an earlier impact on market than option 2 (even assuming that option 2 delivers best results). || For businesses, similar to option 2 but effects would be felt earlier. For Member States there would be limited administrative costs due to the transposition of the directive into national legislation. || Positive impact would be achieved faster and more certain than in option 2. || As option 2, but earlier impact. 
 Option 4: Extended legislative instrument || As option 2, plus more competition on data provider level of value chain. However, danger that the establishment of common but complex licencing criteria may generate unforeseen administrative difficulties as the market develops. || For businesses lower administrative burden if activities in more than one MS. As the directive would contain a further element, the cost of transposition would be higher than in option 3. It would also generate extra administrative costs for those MSs which have to adjust their mechanisms for controlling the activity of data providers || As option 3. || Enhanced supply of HRSD would boost utilisation of HRSD for the implementation of social and environmental policies. 
Option 3 is the preferred option combining
a good level in terms of economic, strategic and social benefits with a very
high level of effectiveness and efficiency while at the same time leaving as
much room as possible for MS for controlling the data-providing businesses in
their territory.
6.           Monitoring and Evaluation
 Objectives || Indicators 
 General objective || Fostering growth of the EU Earth observation market, in particular the services market. Fostering competitiveness of the EU Earth observation sector. Fostering the competitiveness of EO-user-businesses. || Evolution of EU Earth observation market turnover. Evolution in the number and size of business operators. Positive/negative business perception on HRSD internal market performance. 
 Specific objective || Better business conduct across MS for the dissemination of HRSD. More reliable access to HRSD. Good information on accessibility of HRSD for VAS/data-resellers and customers. Increasing competition on data provider level. Fostering internal market on HRSD. || Level of transparency and predictability of existing/evolving regulations. Monitor quota of finally rejected HRSD requests due to security reasons. Level of transparency and publicity of existing/evolving regulations Number of competitors, HRSD pricing Monitor quota of HRSD transactions to customers/VAS/data resellers with reference to their respective location: domestic, EU, third country. 
 Operational objective || Establish the core elements to use the full commercial potential of HRSD and in particular facilitating dissemination and access, by: - Introducing as a basis a common notion of HRSD, - Common standards on transparency, predictability and fair treatment, - Common standards on efficiency and business friendly implementation in particular with respect to the procedures to follow. || Chosen operational objectives allow monitoring by checking if the elements have been introduced in national law. 
The legislative instrument will provide for
the regular monitoring of the implementation of the proposed initiative, especially
as regards the operation of the procedures developed by the national
authorities. The monitoring would require regular update by the national
authorities (e.g. on an annual basis) through the submission to the Commission
of the following aggregated statistics: 
–                        
number of businesses acting as data provider in
different Member States;
–                        
overall number of the data transactions screened
(allowing to assess the market interest in HRSD);
–                        
percentage of "non-sensitive" and
"sensitive” requests allowing to draw conclusions about the overall
effectiveness of the screening (the percentage of "sensitive"
transactions can be used as an indicator for the efficiency  of the filters
applied by the data providers and can indicate the degree to which business needs
are accommodated);
–                        
percentage of domestic, cross-border (within EU)
and worldwide business activities at data provider level;  
–                        
number of sensitive requests that are submitted
for subsequent authorisation; 
–                        
percentage of denials of authorisation (allowing
to draw conclusions on how efficient business needs are taken into
consideration in the screening procedure).  
The Commission will inform regularly the
European Parliament and Council on the implementation of the directive and an
evaluation of the new instrument would be carried out 3 years after the expiry
of the transposition period. The evaluation would be based on the indicators in
the table above and would seek to establish to what extent the instrument has
fulfilled the objectives and whether there is a need for revision.
[1]               However as the effectiveness and efficiency of the
process under open method of coordination is uncertain, any outlook on the
economic impact remains unclear.