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Satellite investigation services for the environmental legal/insurance market

Periodic Reporting for period 1 - SME I - CYBELE (Satellite investigation services for the environmental legal/insurance market)

Reporting period: 2019-12-01 to 2020-05-31

While environmental legislations have multiplied across the globe, too often they are not enforced. In Europe only, the gap between policies and practices costs society €50bn per year. Furthermore, environmental crimes at a global scale lead to €12-48bn (illegal mining), €10-12bn (illegal waste), €51-152bn (forestry crimes) of economic loss for countries deprived of future revenues and development opportunities. In 2016, INTERPOL and the United Nations Environment Programme (UNEP) estimated that natural resources worth as much as USD 91 billion to USD 258 billion annually are being stolen by criminals [The rise of environmental crime: A growing threat to natural resources peace, development and security [UNEP-INTERPOL, 2016]. They also indicated that environmental crimes rose by 5-7 % annually, and increased of 26% in 2014. The European Commission further stated the high legal costs associated to environmental damage. Member States engage a large amount of their budget in measures aiming to prevent and remedy damage taken by the liable operators under the Environmental Liability Directive (ELD). In 2016, the 142 reported cases of legal environmental damages in Europe is estimated to a total of €173.711.841 [European Commission, Brussels, 2016].

If the weight of environmental non-compliance is established, various factors impede the enforcement of environmental legislation and the access to a legal remedy for companies or individuals harmed by environmental damage. Environmental cases are hard to prove or to litigate, partly due to their complexity. Recent reports are stressing the global “lack of human resources associated with the investigation and prosecution of environmental crimes” [Eurojust, 2014]. The absence of available and reliable data to constitute evidence remains a major obstacle for the enforcement of environmental law.

To face this challenge, satellite image analysis offer a significant tool. The various instruments embedded on satellites offer an infinite source to gather and analyze information related to environmental damages. CybELE developed a unique expertise in this area with an operational monitoring of deforestation & threats to protected habitats, maritime pollution as well as soil pollution. We developed a market-creating innovation to help environmental officers or victims proving infringement of environmental law and/or assess the damage they suffered. We analyse satellite data to produce reports carefully designed to be directly presented in front of a judge, and make polluters pay by bearing the cost of remedial action. The applications range from operational monitoring of deforestation & threats to protected habitats to maritime pollution as well as soil pollution.

Besides providing clear benefits for society (notably by supporting the 17 Sustainable Development Goals (SDGs)), CybELE EO investigative services generate important market opportunities. We have estimated our total addressable market (TAM) at 537M€/y. With the SME Phase I we conducted a market and feasibility study to analyse with more accuracy the potential of the targeted market, the social and commercial impacts resulting from our activities and the different strategies that should be implemented to reach our objectives.
Market Study. We conducted strategic product positioning and market analysis across four reference verticals (applying a specific methodology for each vertical). These verticals are mining, maritime, forestry applications and legal industry. For each vertical, we estimated the market size, the key customers and the main competitors.

User's needs identification. We implemented a double approach involving customer validation (focused on needs identification) and prospecting activities (focused on selling our products). Starting from a theoretical definition of their needs, we had multiple interactions with our end-users pursuing a customer validation process. We exchanged with them to confirm their needs, understand their working processes, identify potential bottlenecks and assess willingness to subscribe to our products.

Technical feasibility study. We used this 6-months period to improve to increase the TRL level from 5 to 6. We now have a minimum viable product (V1 version) that we successfully tested within the company. In parallel, we streamlined internal R&D processes from the initial definition of needs and requirements to the final release of the operational product. We developed risk and compliance grades’ protocols.

Financial study. During the first three months of the project, we assessed our production costs and drafted a preliminary pricing strategy to discuss it with our users. During the second part of the program, we produced a cost & revenue projection for the first twelve (12) months of commercial operation and a growth investment roadmap for the next year with a list of potential investors.

IPR and legal feasibility study. We mainly focused on two activities. On one hand, we filed a European patent regarding one specific EO product. On the other, we implemented a comprehensive risk mitigation strategy to manage all the legal aspects of our business, from internal R&D development to commercialisation.

Communication & Stakeholder engagement. We engaged with many stakeholders active on the different verticals throughout the entire project duration. To do so, we developed new communication tools (company presentation, personalised commercial leaflets including report samples, personalised presentation for end users, etc.).

Commercialisation activities. Regarding client prospects, we focused our efforts on the B2B and B2G segments. We are exchanging wiht our prospects and test users on a recurring basis. We structured business activities around a 3-steps process (customer validation - report production - platform integration).
Market Study results
Identification of three (3) sectors of commercial interest for EO environmental investigation divided in around ten (10) subsegments each (law firms, enforcement agencies, insurance, companies…)
Precision positioning on the market and added value in relation to competitors

User's needs identification results
75+ end users contacted, 22 channels of communication established, 14 meetings hold, 6 letters of interests
Numerous end users’ propositions and over 10 “EO features” with positive environmental impact identified as commercially valuable

Technical feasibility study results
Development of 2 EO products for environmental compliance
R&D processes in place (from initial expression of needs, development, testing & delivering)
MVP of a platform released

Financial study results
Established business model including theoretical pricing strategy for on-demand reports (number of images, explanations, resolution) and access to the platform (trial, basic, pro)
Indicative timeline for growth scenario & different funding opportunities

IPR and legal feasibility study results
1 patent filed at European level
Preparatory work & screening for labelling and certification requirements

Communication & Stakeholder engagement results
More than ten (10) reports sample produced to monitor environmental damage
Production of new communications tools (company presentation & leaflets)

Commercialisation activities results
Commercial negotiation with major stakeholders conducted (Governmental & industry)
Commercial interest from the public and private sector
Suspicion of illegal logging activities