LONDON—December 16—Europe’s construction sector has potential to achieve 50% circularity – including recycling and content reuse – by 2040, up from only 30% today, and should strive to do so to secure a halving of its embodied greenhouse gas (GHG) emissions, a new analysis from Bain & Company, in association with Circle Economy suggests today.

Bain & Company’s research, Five Ways to Improve Circularity in Construction, finds that the European construction industry, despite being better advanced in circularity than other global regions, is currently only around 30% circular across light industrial, commercial, and residential projects. Heavy materials, such as concrete/bulk fillings and masonry/plaster, account for most of the material used in the sector, at 53% and 38% respectively. The current quantity of recycled inputs is meanwhile very low and in need of improvement, with concrete at only 12% of recycled input. Added to this, in 2020, only 18% of demolition waste was reused in construction.

But Bain analysis finds that a 50% circular construction industry in Europe by 2040 would be capable of meeting still-rising demand for commercial and residential buildings with significantly fewer materials. On this basis, the sector’s total material use would drop by some 8% from its current 642 million metric tons to 590 million metric tons annually. And with appropriate circularity strategies, the share of recycled materials by the industry has scope to double to 28% by 2040. In this time frame, as much as 100% of construction and demolition waste could be recycled, and 49% should be reused in construction with the remainder downcycled or used in other industries, the study concludes.

The findings come as EU countries and their construction businesses grapple with the bloc’s Energy Performance of Buildings Directive. Under the EU regime, European countries must develop long-term strategies to decarbonise their buildings by 2050, with 2040 set as an indicative milestone. The EU regulation is an integral part of the European Green Deal, which aims to set the EU firmly on the path towards net zero climate neutrality by 2050.

Bain notes that currently construction and buildings contribute to 40% of the world’s GHG emissions and materials footprints. Most emissions associated with buildings result from their operations – primarily from heating and cooling. The embedded emissions in building materials account for an important 28% of property-related emissions, however. Achieving a rise in circularity to 50% would allow European construction to contribute to net zero goals by cutting embodied GHG emissions (i.e. associated with the production of construction materials) by half from present levels.

Today’s Bain analysis highlights five critical strategies to help the construction industry reach 50% circularity by 2040:

• Renovation and longer utilization: Improving existing residential and commercial buildings to extend their lives and make them more sustainable.
• Lightweighting. Innovating in design and materials could decrease a building’s embodied carbon by up to 15% by 2040.
• Renewable inputs: Investing in the rapidly growing market for building materials made from renewable inputs.
• Circular inputs: Increasing the amount of recycled content, with improved collection and recycling consistency,
• Recovery services and technology: Better managing waste during construction and demolition, including more advanced material separation techniques, can help increase the amount of materials to be reused or recycled.

Adrien Bron, a Zurich-based partner in Bain & Company’s Advanced Manufacturing & Services practice, said: “The construction industry is showing that it can use and emit less, while recycling and reusing more. But to achieve a step change in circularity, various players in the construction value chain need to work closer together – designers, suppliers, constructors, and owners. Here ambitious regulation can help increase pace of circularity over the next two decades.

Increased circularity is already happening – but limited to too few projects. Large players will increasingly use circularity as differentiation. But a large majority of the built volumes today is the craft of small and mid-market companies. For this group, the industry needs to raise awareness, provide more training, and offer the right economic incentives for circularity strategies.”

Media contacts

For any questions or to arrange an interview, please contact:

Gary Duncan (London) — Email: gary.duncan@bain.com