Trump’s executive order on space launch deregulation

President Donald Trump on Wednesday directed federal agencies to relax requirements for commercial launch and reentry licenses in a bid to jump-start competition in the U.S. space sector.

The White House issued an executive order that calls for the elimination of environmental reviews and portions of Part 450 — a set of launch safety-related measures that took effect during Trump’s first term in 2020. Launch providers have until March 2026 to obtain Part 450 permissions.

The rule, which was intended to streamline licensing and permitting for commercial spaceflight, has been roundly decried by the industry and Congress.

“Inefficient permitting processes discourage investment and innovation, limiting the ability of U.S. companies to lead in global space markets,” the order reads. “Overly complex environmental and other licensing and permitting regulations slow down commercial space launches and infrastructure development, and benefit entrenched incumbents…over new market entrants.”

The order also directs federal agencies to preempt state and local laws that may be hindering the development of spaceports. Blue Origin and SpaceX own private spaceports, and there are 18 others with federal authorization. It further calls for a political appointee to replace the civil servant in charge of the FAA’s Office of Commercial Space Transportation and creates a new position within the Transportation Department (DOT) dedicated to deregulation and innovation.

Transportation Secretary and interim NASA Administrator Sean Duffy and FAA Administrator Bryan Bedford, who joined Trump for the executive order signing, said the directive will maintain the U.S.’s position as a leader in spaceflight.

“By slashing red tape tying up spaceport construction, streamlining launch licenses so they can occur at scale, and creating high-level space positions in government, we can unleash the next wave of innovation,” said Duffy. “At NASA, this means continuing to work with commercial space companies and improving our spaceports’ ability to launch.”

Spaceflight surge

When the Office of Commercial Space Transportation was established in the 1980s, its creators did not envision the current state of play.

Per a fact sheet commemorating the FAA’s thousandth licensed commercial space operation on Thursday, it took more than three decades to reach 500 such flights. There have been just as many in the past four years, however, with 2024 setting a record for commercial activity.

The explosion in commercial spaceflight made the FAA’s job exponentially harder, spurring the creation of Part 450. The regulation replaces legacy licensing requirements with a single set of performance-based rules covering all space vehicles.

According to the FAA, Part 450 is designed to reduce the number of times an operator must coordinate with the regulator. But it has not been well-received by the industry.

SpaceX, for example, last year called the process “frivolous” amid licensing delays for its Starship rocket. CEO Elon Musk even vowed to sue the FAA after it fined the company for alleged violations of its license. Then-FAA Administrator Mike Whitaker said the regulation and its enforcement were necessary for safety during a House hearing last year.

The regulator has authorized only a handful of companies under Part 450, among them Varda Space, Blue Origin, and SpaceX, which accounted for the vast majority of commercial space operations in 2024. Many others — including United Launch Alliance, Rocket Lab, and Firefly Aerospace — still seek those permissions.

The FAA, for its part, has been fairly receptive to the industry’s concerns. A Part 450 aerospace rulemaking committee (ARC) created in November, for example, is expected to share proposed improvements to the licensing process this fall.

But stakeholders remain unsatisfied, with policymakers even going as far as requesting a Government Accountability Office review of the regulation.

Leveling the playing field

The executive order lambasts the regulatory regime for commercial spaceflight and argues that change is needed in order for the U.S. to compete with foreign rivals.

“It is imperative that new space-based industries, space exploration capabilities, and cutting-edge defense systems are pioneered in America rather than by our adversaries,” the order reads.

The rollback of environmental reviews is perhaps the most consequential — and controversial — provision.

The order directs Duffy to “eliminate or expedite” environmental assessments, environmental impact statements, and other documents required under Part 450 to comply with the National Environmental Policy Act (NEPA). The DOT will determine which, if any, of its activities are not subject to NEPA and carve out exclusions for launch and reentry authorizations.

The order also seeks NEPA categorical exclusions for spaceport licenses and permits. It directs the DOT, NASA, and Defense Department to “expedite their respective environmental and administrative reviews” and remove any duplicative regulations.

In a statement to technology news website Ars Technica, Jared Margolis, a senior attorney for the Center for Biological Diversity — which in 2023 sued the FAA over its handling of SpaceX’s inaugural Starship launch — called the environmental rollback “reckless” and “incredibly dangerous.”

But the Commercial Space Federation (CSF), which represents SpaceX, Blue Origin, Axiom Space, and other key NASA contractors, hailed the move’s implications for launch cadence.

“The current DOT environmental review process is overly cumbersome and time-consuming and frequently results in duplicative reviews of similar activities which have no identifiable negative impact on the environment,” the CSF said in a statement.

The order further calls to “reevaluate, amend, or rescind” portions of Part 450 that may not apply to spacecraft with flight termination systems, hybrid launch and reentry qualifications, or other recently developed capabilities. A new DOT advisory officer and White-House appointed FAA commercial space official will oversee the deregulation efforts.

“The directive to expand categorical exclusions under NEPA and to exempt vehicles with flight termination systems from redundant safety requirements introduces legal flexibility that could drastically reduce both permitting time and litigation exposure for operators and investors,” Chad Cummings, an attorney with Cummings & Cummings Law who represents former Boeing Starliner employees, told FLYING.

Cummings said the dismantling of “regulatory chokepoints” will speed up spacecraft development timelines. Increased certainty could also spur investment in new space technologies.

“A faster permitting environment lowers the cost of capital because financiers can underwrite projects with clearer timelines,” he said. “This could unlock more participation from institutional investors who previously avoided the sector due to regulatory unpredictability.”

Per the FAA’s commercial spaceflight forecast for the next 20 years, the number of annual operations could triple over the next decade. With relaxed licensing regulations, that figure could grow even larger.

Editor’s note: This story first appeared on FLYING.