Japan's Strategy to Profit from Space Debris

Japan is one of five countries, along with the United States, China, Russia, and India, that have successfully landed spacecraft on the moon. This is a significant achievement that globally validates Japan's space technology capabilities. Japan has prior experience operating lunar exploration robots and has continuously strengthened its deep space exploration capabilities through this.

After the emergence of SpaceX, global interest in the space industry surged, causing the stock prices of many space companies to skyrocket. Investment poured in with expectations of commercial viability, but as actual profits failed to materialize, stock prices subsequently underwent significant corrections. This highlights that the space industry still requires massive investment and a long timeframe.

Currently, outer space is not designated as the territory of any specific nation, and there are no clear international legal regulations regarding resource extraction and development. This has led to a 'lawless frontier' situation, comparable to the 'New Continent' of the 21st century, where the advantage of early entry is prioritized. While related laws and regulations are expected to emerge gradually, now is the time when countries or companies that enter first can gain a favorable position.

When Japan's H3 rocket launches, its second stage goes into orbit, separates, and remains in space. Unlike the first and third stages, which fall back to Earth and burn up in the atmosphere, this becomes new space debris. Such abandoned space debris increases the risk of collision with orbiting satellites or other spacecraft, posing a serious threat to space activities.

Japan's H3 rocket has a success rate of 78%, with 7 successes out of 9 launches to date. In contrast, SpaceX's Falcon 9 rocket, based on over 400 cumulative launch experiences, has achieved a 100% success rate for over 100 launches in the past year, demonstrating overwhelming reliability. As a minimum of 95% success rate is required to secure competitiveness in the commercial launch service market, the H3 rocket currently shows a reliability gap that makes it incomparable to the Falcon 9.

The target launch cost for the H3 rocket is 5 to 7 billion yen (approximately 50 billion KRW), which is cheaper than SpaceX's Falcon 9 external contract price of 67 million USD (approximately 90 billion KRW). However, the Falcon 9 has a structure that significantly lowers fixed costs through its own volume, such as Starlink satellite launches, making it highly price competitive. In contrast, the H3 is currently operated primarily for internal loads, such as the Japanese government or Ministry of Defense, and has no commercial orders yet. This shows that price competitiveness alone is not enough to gain an advantage in the commercial market.

Japan's H2A rocket achieved a high success rate of 98%, with only 1 failure in 50 launches, and secured 5 private contracts. This demonstrated that Japanese launch vehicles could have some competitiveness in the commercial market. However, the H2A was eventually retired and replaced by the H3 rocket because it could not compete on price with SpaceX's Falcon 9 and next-generation launch vehicles. This illustrates Japan's reality of struggling to overcome SpaceX's overwhelming economic advantage, despite its technological success.

Space technology often involves classified information directly related to national security, leading some countries to hesitate in entrusting satellite launches to specific entities like the United States or SpaceX. Targeting this demand, Japan is offering an alternative: 'Japan, not the US.' Indeed, the United Arab Emirates (UAE) signed an H3 launch vehicle contract, demonstrating confidence in Japanese space technology. Japan hopes to secure its commercial position by catering to countries that wish to reduce their reliance on US technology or strengthen their independent space capabilities.

The method of recovering and reusing rockets is criticized for its high initial and maintenance costs. Additional expenses arise from establishing recovery equipment and operating ships to retrieve rockets that fall into the sea. If launch frequency is low, some analyses suggest that disposable rockets might be more economical due to the cost of maintaining the recovery system. However, if launch demand becomes frequent, recovery costs are likely to gradually decrease, making the reusable method more advantageous in the long run.

Japan aims for higher orbital insertion precision than the Falcon 9. The lifespan of a satellite can vary significantly depending on how accurately and with what minute error it is placed into its designated orbit. This is a strategy to differentiate itself by leveraging Japan's unique precision technology as a strength, especially in a situation where it is difficult to catch up with SpaceX in terms of rocket size or launch cost competition. It reveals the attitude of Japan's space industry, which intends to compete on reliability—'not as big and powerful as US rockets, but durable and long-lasting.'

Currently, there are approximately 16,000 operational satellites in space, but about 46,000 objects are being tracked from the ground. Of these, roughly 30,000 are already classified as space debris, consisting of defunct satellites or fragments. Space debris larger than 10 cm, in particular, can destroy satellites upon impact, severely threatening the safety of space activities and exacerbating orbital congestion.

Currently, there is no unified international law or clear technical standard regarding space debris removal. This legal void, paradoxically, offers an opportunity for technologically advanced companies to preempt the market and lead future norms. Japanese space debris removal companies aim to propose their debris removal methods based on their technological capabilities, thereby influencing future international standards. This is a strategy to establish norms through technological superiority in the nascent market.

Astroscale, a company specializing in space debris removal, plans to demonstrate technology by 2027 to capture space debris using a robotic arm and guide it into the atmosphere for incineration. This project targets large space debris, such as the upper stages of the existing H2A rocket, and aims to build a new business model for solving the space debris problem. This indicates that the space debris problem is perceived not merely as a technical challenge but as a new commercial opportunity.

As the space debris problem intensifies, the international community plans to introduce regulations that impose responsibility on countries or companies launching satellites to 'clean up what they shoot.' While retroactive application to satellites launched in the past is difficult, all future launched satellites are expected to be subject to space debris removal obligations. Accordingly, competition for standardized technologies for space debris removal, such as magnets or docking systems, will intensify from the satellite design phase.

In addition to utilizing space resources, a new business model is emerging: extending the lifespan of satellites by 5 to 10 years through refueling. This is far more economical than launching new satellites and is expected to be in high demand among private satellite operators. Furthermore, as the importance of space technology grows, there is a movement towards strengthening reliability and security through local production and sales strategies to meet the demands of various governments and military for security.

Instead of direct head-to-head competition with SpaceX, Japan is adopting a strategy of dominating specific key areas within the overall supply chain of the space industry. For example, it aims to establish a 'unique Japanese presence' by securing unparalleled technological prowess in precision component fields, such as high-performance cameras and lenses. This is a realistic approach for Japan to secure commercial market share and coexist within the vast US-led space ecosystem by leveraging its national strengths.