Candace BarnetteThe U.S. is looking to lead the commercial space race with a new executive order (EO) to streamline regulations and boost competition. On Aug. 13, President Donald Trump signed the order titled ‘Enabling Competition in the Commercial Space Industry,’ which outlines a path to cut down on redundant environmental reviews, outdated rules and duplicative permitting.
The White House says this push is essential so that cutting-edge space industries, exploration capabilities and defense technologies are developed in the U.S. rather than by adversaries. The EO says overly complex permitting and regulatory regimes undermine economic growth, deter innovation and hinder American companies from leading globally in areas ranging from satellite programs to space-based manufacturing. It warns that continued regulatory barriers could cause the U.S. to fall behind in emerging space sectors, threatening both global leadership and economic opportunities.
The order instructs the Department of Transportation (DOT), working with the Council on Environmental Quality (CEQ), to streamline environmental reviews for launch and reentry approvals and reassess standards to phase out outdated, repetitive or overly restrictive provisions.
Specifically, Transportation Secretary Sean P. Duffy must evaluate whether to amend or eliminate Part 450 of title 14 in the Code of Federal Regulations within 120 days. The Federal Aviation Administration (FAA) set Part 450—known as ‘Launch and Reentry License Requirements’— in 2020 in an attempt to modernize and streamline rules for commercial space vehicle launches and reentries. The regulation covers safety requirements, environmental reviews and licensing processes for commercial space operations.
However, many in the industry argue the implementation has caused licensing bottlenecks. Only seven companies received Part 450 licenses in fiscal year 2024, despite 148 commercial space operations.
The order also addresses regulatory gaps for emerging space technologies by directing the Commerce secretary to propose a streamlined authorization process for “novel space activities” within 180 days. These are activities covered by Article VI of the Outer Space Treaty of 1967, but not clearly or straightforwardly governed by existing regulatory frameworks. These activities include in-space manufacturing and orbital refueling, for example. The proposal must include a definitive approval timeline, clear requirements for applicants and input from affected agencies.
To drive these regulatory changes, the EO also creates new leadership structures within the Transportation Department. Within 60 days, the EO requires the Transportation secretary to establish two positions focused on commercial space innovation. The first is a senior advisory position within the Office of the Secretary responsible for fostering innovation and reducing regulatory barriers in the commercial space sector. The second directs the FAA to appoint a senior executive noncareer employee as Associate Administrator for Commercial Space Transportation to lead regulatory reform efforts.
The executive order takes a comprehensive approach to space industry barriers, extending beyond federal regulations to state-level compliance issues. Within 180 days of this new order, the secretaries of commerce, defense and transportation will work together to review state compliance with the Coastal Zone Management Act (CZMA).
The 1972 federal law encourages states to manage and protect their coastal zones while balancing economic development, recreation and environmental conservation. These officials will consider whether states are complying with the act and examine the CZMA’s impact on spaceport infrastructure development, particularly whether the law is hampering efforts for development.
The EO calls on the leaders to ensure all review processes are aligned across departments and eliminate redundancies with the goal of strengthening U.S. competitiveness and leadership in emerging space industries.
Transportation Secretary Duffy said slashing red tape will enable the creation of more high-level space positions in government, while FAA Administrator Bryan Bedford adds the order will position U.S. companies at the forefront of commercial space activities.
Industry supporters believe the reforms could help American companies stay competitive in emerging space sectors, though critics caution that easing environmental and permitting requirements could pose risks. According to the Transportation Department, these changes should create a competitive marketplace that sees a major increase in commercial space launches and novel space activities by 2030.
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