When you encounter the "insufficient space" or "memory card full" error, it usually means your virtual 8MB card has reached its limit. Below are the most effective ways to solve this and ensure you never lose your progress again.
If you don't want to create a new card, you can manually delete old save files from other games that are hogging space. How To Create Memory Card On Ps2 Emulator (PCSX2) tekken 5 pcsx2 memory card full