Circular Economy: 8 actions to cut 60% CO2 in the buildings sector

Ramboll recently published a report commissioned by the European Environment Agency that analysed the relationship between circular economy and climate change mitigation. The report also outlines a methodology to quantify the decarbonisation benefits of circular economy actions.

The approach was tested for the building sector and found that, from the combination of 8 selected circular economy actions, up to 60% of the CO2 emissions related to building materials could be avoided in the EU compared to a baseline scenario, or an absolute reduction of 130 million tonnes of CO2 by 2050. Here, we put forward the main findings and point to 8 actions essential to both policy-makers and corporate executives looking to deliver sustainable change in the industry.

A stepwise approach

Materials management is estimated to represent 67% of total global greenhouse gas (GHG) emissions1. Our societies’ use of material resources is growing, in turn increasing the greenhouse gas emissions associated with the extraction, processing, assembly, destruction and disposal of products and their materials. One solution to cut down material-related emissions is to maintain existing materials in use before they are disposed of, thus reducing the volume of materials flowing in and out of the economy.

Due to growing concerns over the climate crisis, European Union policymakers have placed the circular economy transition higher on the agenda than ever before. In December 2019, the European Commission published the Green Deal, a Communication paper setting out the EU’s approach towards achieving climate neutrality by 2050 and making the transition to the circular economy by decoupling economic growth from resource use.

In the study we propose a stepwise approach to calculating the potential avoided CO2 emissions from circular economy actions compared to a conventional (non-circular) situation.

The methodology is applicable to any economic sector and is tested for the building sector based on a collection of available data. While the study provides preliminary results from the use of the method, more data on the impacts of circular economy actions on the whole lifecycle of buildings and on future buildings sector market trends would allow a more refined set of findings.

Circular economy in the buildings sector

In the building sector, the focus is on the use of steel, cement, and its related product concrete, as these materials represent the highest sources of GHG emissions of all building materials.

The CO2 footprint of cement production accounts for 8% of global CO2 emissions.² Production processes for cement emit CO2 both from the use of energy to produce the material, and from the limestone calcination process during which the limestone is heated and CO2 is released from the limestone to create calcium carbonate. Calcination is necessary in order to make clinker, which is used as a binding agent in cement.

The CO2 footprint of steel production makes up around 7% of global CO2 emissions.³ Global crude steel production is forecasted to grow by 30% by 2050 with recycled secondary steel growing faster than primary production.⁴ GHG from steel production are emitted both from the energy used to process and manufacture steel as well as through chemical processes.

Due to the importance of steel and concrete in terms of GHG emissions, the building industry is under pressure to find circular and efficient uses of these materials and to make use of viable and more sustainable alternatives. Eight circular economy actions, selected according to their potential impact, are identified contributing to this reflection.

1) Reduce the amount of steel and concrete used to what is strictly necessary

This first action would decrease the emissions related to new buildings through leaner designs. Buildings nowadays are often constructed with more material than is needed: this is referred to as ‘overspecification’, and it is due in part to the need to assure the building structures’ resistance and stability, but also partly to the need to reduce the labour costs that would be needed to design more material-efficient structures.

Studies from the United Kingdom have shown that buildings in the UK could be designed with 20% and up to 46% less steel without jeopardizing the stability and resistance of the structures.⁵ At Ramboll, building experts have estimated that the use of concrete can often be reduced to the tune of 10% from current building designs.

To support these changes in design practices, building standards need to change and allow leaner designs. Technical solutions such as computer-assisted design can also facilitate conceiving lean and resistant structures using only the necessary amount of material.

This action would reduce the need for new products. Nowadays, the amount of steel and even more so concrete components that are reused remain low, in particular when compared to the amount of new or recycled products. From a climate change perspective, reuse can be more beneficial since it does not involve such energy-intensive recycling processes as re-melting of the steel or grinding of concrete. Increasing the reuse of building components can become easier once components are standardised and designed to be easily disassembled, as described in the following action.

3) Design buildings so that their components can be disassembled and reused rather than wasted

Going with the third action has an impressive potential for circularity at the level of a single building: up to 90% of the materials from a building designed to be disassembled can actually be reused. Therefore, we need a new generation of buildings that can easily be disassembled, such as by screwing parts rather than gluing them, and from which components follow standard designs and are easy to reuse in other buildings.

Design for disassembly will contribute to a future where buildings can be used as sources of materials, allowing for ‘urban mining’ or the extraction of construction materials within cities. The success of this approach depends on ability to build information databases regarding the composition of current buildings and to create material banks, to facilitate the extraction of materials needed at the time of a new construction.

Using timber could potentially reduce emissions significantly, as trees absorb CO2 over their lifetime and therefore act as carbon sinks. If well-maintained, a timber structure can effectively stock CO2 for as long as the material is intact, possibly to be reused and maintained beyond the lifetime of an initial building. The use of timber however requires the use of sustainably sourced timber to avoid deforestation, and the wood should originate from local forests to mitigate transport-related emissions which may otherwise cancel out the benefits of using the material.

If all new residential buildings in the EU were timber-structured, Ramboll and Fraunhofer ISI estimate that 12% of the buildings sector’s CO2 emissions could be avoided compared to the current baseline.

Doing so could also reduce emissions significantly. For instance, some modern types of cement emit significantly less CO2 during processing due to their chemical composition. Others can be used to produce pre-cast concrete which solidifies at much lower temperatures than conventional forms of pre-cast concrete. Finally, cement emissions can be reduced by using by-products from other industrial manufacturing processes into cement mixes.

Combined, these actions could potentially reduce the buildings sector’s emissions by 30% compared to the current situation. These new cements are however less competitive than conventional materials at the moment, and due to the lack of a price policy incentive and lack of demand.

This action could reduce emissions from different types of buildings by increasing the density of building users and making a more efficient use of the space. In this way, fewer and more compact buildings could be designed which reduce the demand for new buildings and related materials. In Germany for instance, a study estimated that housing floor space could be reduced by 11% per inhabitant.6 For office space the solution may also be in reducing the floorspace per employee. Office space in the EU could thus be reduced by 36% if EU minimum floorspace standards per employee are applied.

While it would not be desirable to reduce office space beyond what individuals need for their working comfort and safety, this shift can be facilitated by increasing shared workspace practices, combined with giving workers more flexibility in carrying out their tasks either outside of the office (teleworking) or at different hours to allow for more intensive use of the space.

Recycling cement can reduce the need for new cement if waste concrete is crushed and cement is filtered out to be reused. New and efficient recycling technologies already exist today which could be more widely integrated in the construction process on the construction site, thus also reducing transport needs.

That said, where it is feasible concrete reuse would still have lower CO2 emissions than recycling due to the avoided raw cement production process.

The eight action on our list not only enables enhancing buildings’ energy-efficiency, it also extends the lifetime of each renovated building, and therefore reduces the demand for new buildings and related emissions. The current renovation rate observed in the EU is of 1% annually.⁷ As the pace of renovation increases to meet energy efficiency policy objectives, this value can grow much higher.

It is important to note also that, although the material-related emissions are lower than building anew, building renovations also have a material impact, and the energy efficiency gains may not be as important as in an entirely new building. Building renovation is therefore an opportunity to reap emission savings from combining circular economy actions mentioned above, such as space optimisation to reduce the CO2 impact per building occupant, as well as material-efficient designs, the reuse of building components and recycled materials where possible, or the use of low-carbon materials such as bio-based materials. Renovation should also be balanced against the potential whole lifecycle emission savings of highly material- and energy-efficient new designs.

“We need a new generation of buildings that can easily be disassembled.”

A pioneering attempt

The study findings should be interpreted as a pioneering attempt at modelling the complexity of the buildings sector’s material flows and providing an estimate of circular economy’s decarbonisation potential. The results were obtained on the basis of key underlying assumptions and limited data, meaning that different assumptions can lead to

variable results. For one, some of the circular economy actions analysed here present important synergies that can reinforce their benefits, such as design for disassembly and the reuse of disassembled buildings’ components.

The order in which these actions are modelled to occur has an impact on their effectiveness: if buildings are all designed for disassembly prior to any reuse action being implemented, then the potential for reusing components becomes higher.

What is more, while the circular economy can reduce the demand for raw materials by making better use of what is already in the system, it may also lead to a ‘circular economy rebound’ if circular economy business models prove more cost-effective than new materials and lead to increased production, cancelling out the climate benefits of circularity. The potential for circular economy rebound in the buildings sector is currently not well known.

The report however demonstrates the feasibility of drawing compelling forward-looking assessments using existing lifecycle assessments, state-of-the-art material flow modelling from the Fraunhofer Institute, and Multi-Regional Input Output (MRIO) modelling. These calculations can be instrumental in making the case for circularity in its contribution to climate action especially if combined with detailed policy scenario development and policy impact assessments.

We need a new economy

The circular economy actions analysed call for deep societal transformation in Europe by 2050, where construction techniques evolve towards achieving the highest degree of material efficiency, and building design is driven by lifecycle thinking, aided by digital tools and by public policy rules and incentives.8 A new economy is needed which rewards sustaining existing materials rather than demolishing and replacing with new raw materials.

The feasibility of these actions has been demonstrated in individual projects detailed in the studies reviewed to prepare this report. Now, it is up to all stakeholders of the building sector, including policymakers, to steer change in the built environment towards more circular and climate-friendly practices.

Perspectives

The methodology developed by Ramboll and its partners can be used to support governments and experts in assessing the climate mitigation benefits of new circular economy policies in any economic sector. The authors encourage the European Environment Agency and the European Commission to apply this approach to other sectors in order to more deeply understand the climate mitigation potential of circular economy.

In order to calculate climate impacts of the selected circular economy actions, the approach requires the production or collection of lifecycle analysis data comparing the impact of the use of circular economy actions with impacts from conventional products and processes. As lifecycle analysis focuses on individual products or processes (micro-level), this data must then be used as input to a macro-level material flow analysis and combined with a realistic understanding of market dynamics, thus scaling up the results at EU- and sector-level.

About the team

This study was led by sustainability experts from Ramboll Management Consulting. Technical analysis of existing lifecycle analysis data was provided by Ramboll Buildings experts. The Fraunhofer Institute for Systems and Innovation Research developed the material flow modelling approach and calculated the overall impacts of the circular economy actions at EU level. The study was thoroughly reviewed and complemented by circular economy experts from the Ecologic Institute.

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