Solving Space Junk With A Circular Orbital Economy

Why Space Sustainability Now Requires a Circular Orbital Economy

The dawn of a new space age is upon us due to reusable rockets and collapsing costs to reach orbit, thanks to SpaceX, Blue Origin, Rocket Lab, Relativity Space, as well as Chinese rockets.

But the more mass we lift into space, the more space junk becomes a problem. Because material in orbit can stay there for decades, or even centuries for more distant orbits, it means that tons of older satellites are still up in the sky.

What is more problematic, these satellites occasionally collide with each other, breaking apart into a myriad of bullet-like fragments. And the bullet analogy does not give it justice, as the average space debris flight is 28,000 km/h (17,500 mph), which is much, much quicker than any gun ever fired its ammo.

So even the smallest debris can have catastrophic consequences when it hits a functioning satellite.

This could have even worse results in case of a chain reaction theorized as “Kessler Syndrome”: a collision between a satellite and space junk leads to the creation of more debris, leading to more collisions and more debris, creating a chain reaction wiping out all items in the Earth’s orbit.

Such collisions are already the cause of roughly 2/3^rd of space debris, with decommissioned spacecraft the other major source.

Source: Chem Circularity

Currently, the Kessler syndrome would be very damaging, wrecking telecommunications, space-based imagery, and science, as well as early warning nuclear weapon detection systems.

This is because a very real risk, as new satellite constellations are more numerous than all the satellites launched until now combined. And this is before we start building Moon bases, Martian colonies, or GW-scale orbital solar arrays.

Source: Our World In Data

Until now, the only option to get rid of space debris was to manage to get them to fall to Earth and burn in the atmosphere, or be expelled from the orbit altogether. So many older satellites are shifted into “graveyard orbits,” while others become drifting orbital debris that can disrupt the operation of active systems.

“As space activity accelerates, from mega-constellations of satellites to future lunar and Mars missions, we must make sure exploration doesn’t repeat the mistakes made on Earth.

A truly sustainable space future starts with technologies, materials, and systems working together.”

Jin Xuan of the University of Surrey

This might be changing, with a proposition by researchers at the University of Surrey to recycle all satellites and space debris instead. They published their work in the scientific review Chem Circularity¹, under the title “Resource and material efficiency in the circular space economy”.

Building A Circular Space Economy

At first glance, it might seem that it will be difficult to apply to space the “3R” foundation of a circular economy: reduce, reuse, and recycle, as we barely manage to apply it on the ground.

Source: Chem Circularity

But at the same time, the future threat of Kessler Syndrome can be a great motivation, as it would make almost any future space travel impossible.

Another factor is that sending any mass into orbit costs a lot of money, so material available on site should be a lot cheaper. In fact, this would make space debris and abandoned satellites the most valuable material for recycling.

Currently, this cost is around $2,500 to $10,000 per kg for mass put in lower Earth orbit (LEO) with the best reusable rockets, and even higher prices for higher orbits or if sent with smaller rockets.

The European Space Agency (ESA) estimates that approximately 6,000 metric tons of discarded material currently exist in orbit. Even ignoring the advantage of reducing the risks linked to space junk, this represents, in theory, up to $10B of launch cost in material already in orbit.
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How the 3Rs Apply to Space: Reduce, Reuse, Recycle

Reduce

The first step of most sustainability approaches is the reduce component, meaning reducing the demand for resources or the material needed.

This step can be addressed by building satellites and spacecraft that last longer and can be repaired more easily in space.

An important part here is that most satellite lifespans are determined not by them breaking down, but by running out of fuel to stabilize their orbit.

So, larger fuel storage that costs mass (a less pressing consideration as orbital launch costs decrease) or a system for refueling from a “space tanker” would radically reduce the production of space junk and increase satellites’ lifespan.

Space stations could move from their current role of human habitation into a hub for refueling, as well as maintenance and repair.

Reduce can also be applied to reducing pollution and waste already present. The RemoveDEBRIS mission, also developed in part by the University of Surrey, successfully demonstrated several key active debris removal (ADR) technologies: net capture, harpoon systems, vision-based navigation, and drag sail deployment.

Contactless approaches, including ion-beam shepherding and laser propulsion to push debris back down to Earth, can help reduce the amount of space trash accumulating.

Reuse

Of course, perfectly reusable rockets are a major improvement in the sustainability of the space economy, as they avoid the destruction of usable materials at every launch.

A further step could be taken by decommissioning most reusable rockets toward the end of their life, not on Earth, but in space. They can be turned into an orbital tanker, components for space stations, space habitats, and a platform for satellite components.

Satellite reuse, including reassigning end-of-mission satellites to new tasks or adapting base-station technologies for additional applications, can also be improved.

Partially dismantling, like for example collecting back optics, electronics, or solar panels, for reuse in another device, can also form the core of a reuse strategy and the first building block of an in-orbit manufacturing industry.

However, prolonged exposure to space radiation, thermal cycling, and micrometeoroid impacts results in irreversible degradation of spacecraft performance; not an option for a field as demanding as space flight.

So ultimately, all space-based devices will need to either be destroyed or recycled.

Source: Chem Circularity

Recycle

Because satellites and spacecraft are very advanced technologies, they are rich in precious materials and rare metals, on top of their “expensive” location in orbit.

Among what can be recycled, electronic components and main structural materials are the most likely to provide the most value, thanks to their abundance in silicon, aluminum, copper, titanium, tungsten, and nickel.

Source: Chem Circularity

“We need innovation at every level, from materials that can be reused or recycled in orbit and modular spacecraft that can be upgraded instead of discarded, to data systems that track how hardware ages in space,”

Jin Xuan of the University of Surrey

Recycling will, however, be the most technically demanding task, as the process of handling, dismantling, filtering, and remelting material in space has barely begun to be studied in depth. For example, frames, insulation, electronics, and shielding materials are often bonded in ways that hinder disassembly or material recovery.

AI Help

Thanks to AI, more efficient spacecraft can be designed. This can include better material designs, but also, for example, lower bandwidth requirements, like in the case of ESA’s PhiSat-1 mission using onboard AI to filter out cloud-covered Earth observation images so it transmits only useful data to Earth.

AI can also be used to capture old satellites and space debris, a task requiring lightning-fast reaction but also likely too dangerous for a manned spacecraft.

By enabling real-time decision-making, predictive analytics, and autonomous operations, AI helps reduce resource consumption, minimize waste, and improve overall sustainability.

Policy Changes Needed

For all 3Rs, but especially the recycling part, new standards in manufacturing and design need to be implemented.

For example, a clear tracking of the material contained in a satellite and its structure needs to be documented, archived, and accessible for years or decades in the future when the time for recycling comes.

More durable designs should also be encouraged, or even mandated by a new policy framework regarding aerospace manufacturing and the risks of space junk.

“Just as importantly, we need international collaboration and policy frameworks to encourage reuse and recovery beyond Earth.

The next phase is about connecting chemistry, design, and governance to turn sustainability into the default model for space.”

Jin Xuan of the University of Surrey

Ultimately, the use of in-situ resource production in space (asteroids), the Moon, or Mars will also take on growing importance in the discussion about space recycling, manufacturing, and pollution.

Investing Angle: Companies Driving Space Sustainability

Rocket Lab

Rocket Lab is the largest publicly traded rocket company (since 2021) and one of the most serious contenders to SpaceX in the reusable rocket market.

The company has initially focused on small rockets, including the Electron launch system (320 kg of payload), which is being progressively turned into a partially reusable rocket. So far, Electron has deployed 224 satellites in 70 launches.

Later on, Rocket Lab is developing Neutron, a medium-lift reusable rocket now specced at 13,000 kg to LEO and ~1,500 kg to Mars/Venus, positioning it squarely against Falcon 9 for mid-class missions.

Source: Rocket Lab

The Neutron will be powered by a methane-burning rocket engine (like Starship), which seems to be the trend for the next generation of rockets.

It will use the newly opened Launch Complex 3, as well as a custom-built landing pad at sea constructed by Bollinger Shipyards, the largest privately owned new construction and repair shipbuilder in the United States.

Source: Rocket Lab

The company is also remarkable for its fully vertically integrated satellite manufacturing process, allowing it to optimize costs and design speed.

This resulted in multiple contracts with NASA & the US government, including a $515M military satellite contract. And a civilian $143m contract for Globalstar.

Rocket Lab is also a major manufacturer of solar panels for satellites after its 2022 acquisitions of SolAero Technologies, with 1000+ satellites powered by these panels, and 4MW solar cells manufactured in total.

Source: Rocket Lab

For now, its launch system is reliant on outside suppliers for parts, but a series of strategic acquisitions is changing that, replicating for launch systems the vertical integration strategy already achieved in satellite design and manufacturing.

The company is also looking at the possibility of a telecom LEO constellation to generate recurring revenues. It is also contributing to research for in-space manufacturing with Varda Space Industries and orbital debris inspection.

While SpaceX had Elon Musk’s business talent (and money) to develop its technology from scratch, Rocket Lab used a mix of R&D and acquisitions to vertically integrate the technology required.

It has proven very successful in satellite manufacturing, and they are now looking to replicate this strategy for reusable rockets. Considering the existing cash flow from satellite production & the Electron successes, Rocket Lab is a good candidate to catch up with SpaceX’s head start.

(You can read more about the company in our dedicated investment report on Rocket Lab.)

Latest Rocket Lab (RKLB) Stock News and Developments

References:

1. Yang, Z., Liu, L., Xing, L., Amara, A., & Xuan, J. (2025). Resource and material efficiency in the circular space economy. Chem Circularity, 100001. https://doi.org/10.1016/j.checir.2025.100001