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The Building Sector’s ‘Trillion-Dollar’ Circular Economy Opportunity

Tuesday, May 31, 2016   (0 Comments)
Posted by: Anne Piacentino
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Source: Environmental Leader

The construction industry is the largest consumer of raw materials globally and yet less than one-third of construction and demolition waste is recycled or reused, says a new report by the World Economic Forum.

In the US alone, about 40 percent of solid waste comes from construction and demolition.

Using closed-loop circular design principles — reusing discarded asphalt products as road-building materials and waste lumber as wooden flooring material, for example — is one of the approaches that could, and should, shape the sector’s future, according to Shaping the Future of Construction: A Breakthrough in Mindset and Technology. The report was produced with the Boston Consulting Group and targets not only construction companies but also design companies, suppliers of technology and building materials or equipment, and others along the value chain.

Considering constructed objects account for 25 percent to 40 percent of the world’s carbon emissions, recycling these discarded materials present a huge opportunity for the industry to reduce global emissions and make their businesses more environmentally sustainable.

In addition to reducing waste and emissions, employing circular economy approaches to the construction sector has business benefits.

“Its potential for innovation, job creation and economic development is huge: estimates indicate a trillion-dollar opportunity,” World Economic Forum’s Dr. Michael Max Buehler, practice lead real estate industries, told Environmental Leader. “The potential for the industry to identify closed material loops and to adopt circular design principles is tremendous. Today, construction processes are still highly fragmented with misaligned incentives among capital project stakeholders creating up to 15 percent waste by volume. For example, it is estimated that 54 percent of demolition waste in Europe is still landfilled and most recycling occurs in low-value applications. A key reason for these inefficiencies is fragmented knowledge of material composition or value. In addition, the utilization of built environment assets is poor, resulting in inefficient resource use.”

The construction industry has been slower than most to adopt technological innovations, and wary of modernizing strategies and processes, the World Economic Forum says.

Change is happening — but slowly. Analytics, building modeling and other new technologies already affect all stages of a building’s life cycle, from planning and design through to operations and maintenance. But their adoption is still sparse.

“Individual companies have serious transformative opportunities now, by exploiting new technologies and materials,” said Santiago Castagnino, a partner and construction expert at BCG, and co-author of the report. “If you also optimize the planning and the processes, you could easily end up cutting costs by 15 percent and reducing the completion time by as much as 30 percent.”

The report says emerging digital technologies — such as 3D models for guidance, robots for the dangerous work, and drones and embedded sensors — will boost productivity and improve on-site safety and environmental performance.

While still in the early stages of development, 3D printing has the potential to boost productivity gains by as much as 80 percent, while also reducing waste. For example, in a project on 3D-printed steel components, global construction and engineering firm Arup achieved a 75 percent weight reduction and 40 percent reduction in materials compared with traditional production methods, the report says.

Advanced building materials and “lean” manufacturing techniques can also help transform the industry and cut construction costs. “With approximately one-third of construction cost attributed to building materials, the scope for applying advanced building materials (ABMs) is considerable,” the report says. These include an advanced vinyl flooring by Johnsonite that is 100 percent recyclable, using a biobased plasticizer, and has total volatile organic compound values 100 times below European standards. Another example: self-healing concrete, created by adding bacterial spores, is estimated to reduce lifetime costs by up to 50 percent.

The UN Environment Programme estimates that construction-sector improvements can help countries cost effectively reduce their emissions and achieve energy savings of more than 30 percent.

The circular economy is key to harnessing these benefits, Buehler says. “Imagine a world in which built environment assets represent the biggest valuable materials deposit for society. In this world physical assets are digitally interconnected, revealing up-to-date condition of their components to not only enable predictive maintenance and performance models, but also to be a platform for the global materials market. Imagine how asset interconnectivity could pave the way for closing the material loops for the largest source of waste in modern society. Therefore the circular economy is key in redesigning this future, where industrial systems are restorative and regenerative by intention and design.”


 Washington State Recycling Association | 545 Andover Park W, Ste 209, Tukwila, WA 98188 | 206.244.0311 | recycle@wsra.net

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