Circular Economy

Here's how to create a circular system for the built environment

The buildings sector needs to reduce emissions by embracing the principles of a circular economy

The buildings sector needs to reduce emissions by embracing the principles of a circular economy Image: Quang Nguyen Vinh for Pexels

Ritu Garg
Senior Consultant, Arup, and World Economic Forum Fellow, Net Zero Carbon Cities
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  • In order to reach net zero, we will need a circular system for building materials.
  • This means increasing the global supply of these 'circular materials', and improving access to them.
  • New research has identified six key actions that will help achieve this, from innovations to new policy.

The built environment is a primary consumer of cement, aluminium, steel, and plastic, four of the five materials which account for 55% of the world’s industrial carbon emissions. The sector needs to reduce these emissions by embracing the principles of a circular economy. There are many outstanding core conditions which need to be in place globally for a truly circular system in the built environment, as shown in the diagram below. All of these conditions are important, but some are primary enablers, and will form the basis for achieving others. It is important for the sector to recognise this, in order to collectively understand where to focus efforts.

To achieve a net zero transition, it will be necessary to strengthen the supply of and access to 'circular material' on a global scale. We define circular material to be material that is pre-used, low or/zero-carbon, recyclable, or recycled.

Many of the other conditions for achieving a circular economy in the building sector depend on access to materials
Many of the other conditions for achieving a circular economy in the building sector depend on access to materials Image: Arup

Achieving circular economy for the built environment

As part of the Forum’s focus initiative on circular economy in the built environment, we conducted a range of interviews with major industry players, alongside our own research and systems-mapping exercise. Here are the six key actions that will make the most impact:

1. Identify alternatives: Industry, in collaboration with government and researchers, must identify which sustainable alternative materials are available to construct an asset, and then scale the supply of such materials consistently across core construction growth markets. This is essential to enable designers to adopt and select alternative materials.

2. Increase cost competitiveness: Policymakers and regulators must support new forms of low-carbon building material with incentives and supporting regulation so that they can compete financially against lower cost standard virgin material.

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3. Maximise re-use: Management of construction and demolition waste needs global reform to maximise re-use and salvage of existing components and materials.

4. Update standards and codes: To increase demand, and justify an increase in supply, government and major industry bodies need to work with private sector and researchers to accelerate the adoption and approval of standards and codes that support the use of alternative materials in built environment assets.

5. Offer new skills: Industry must offer new skills and services to evaluate and provide quality assurance for pre-used materials.

6. Offer new systems: Industry and government must together provide information and management infrastructure to streamline the collection and consolidation of local pre-used materials. They must create a central and reliable supply to meet demand for construction within high-growth regions. Construction waste should always be diverted from landfill to these central repositories.

Taking action on the points above requires a range of efforts: a regulatory push to incentivise innovation; better governance of materials and waste; new skills; business models; and services from the private sector. These all require greater collaboration and alignment between the public, private, research and academic institutions.

Collaboration across the entire value chain is key; looking creatively to find previously unexplored sources of value. For example, waste rock and slag (a by-product of the smelting process) can be suitable construction materials and reduce the need for additional extraction of primary resources. We are already working on this in places like Brazil. However, to scale these solutions, we require the private sector and policymakers to work together and ensure that policy and regulation support the application of circular economy principles to the built environment.

Jan Klawitter, Head of International Policy, Anglo American

Re-use vs. new zero-carbon material

In order to increase the supply of circular materials for building, we need to distinguish between using low or zero-carbon sustainable material versus re-using and and recycling existing material. Re-using and recovering materials should always be the priority, in order to minimise waste and overall demand for new material. Material re-use should be localised as much as possible, to minimise associated transport emissions, especially in areas with a lot of construction activity.

Where a material is already being re-used and recycled as far as possible, but there is excess demand, the industry needs to develop and scale new alternative, low/zero-carbon material solutions. Building and infrastructure asset designers need to work in parallel, to design out any unnecessary use of such material.

Material re-use and recycling alone will not be sufficient to meet the global demand for new growth in the built environment. The buildings sector in the global south is growing rapidly, and we need major new infrastructure to scale renewable energy and climate adaptation measures worldwide. This means that countries with progressive policies and influence over the world’s major material manufacturers must incentivise them to make urgent research investments in material innovation. New low/zero-carbon building materials are a key condition for ensuring that forthcoming development around the world has a minimal reliance on carbon-intensive material.

There are significant risks associated with the failure to adopt and prioritise the right, context-sensitive policies. Recycled materials are harder to find in developing countries, where recycling plants often do not exist. Using recycled materials is also currently costly in most places due to a combination of regulation, insufficient policy support, and limited operations and supply chains for re-use and recycling.

Policymakers around the globe need to think about how to incentivize the salvation, reuse, and recycling of building materials. Starting with pilot projects, we are now recycling leftover construction material in different countries in the Middle East. We have found that the policy in each country is the main factor determining the financial feasibility of undertaking large-scale recycling. Incentives must be implemented, starting with the contractual requirements and ending with the country's regulations. Governments need to alter landfill costs and related regulations to increase the competitiveness and attractiveness of circular practices.

Saji Khoury, Sustainability Lead, Consolidated Contractors Company, Construction Middle East

Progressive and powerful countries must not focus exclusively on achieving circularity at a local level. Those at the forefront of rolling out policies to build a circular economy must recognise their power to shape future global material supply chains. They should prioritise the development of affordable low-carbon material options, which can ultimately scale in high-growth regions such as Asia, Africa, and South America.


What is the World Economic Forum doing to help companies reduce carbon emissions?

Regions that are pioneering the circular economy agenda, such as the EU, need to monitor and influence the impact of their policies on the flow and evolution of low impact materials. To achieve net zero emissions globally, major industry players, innovators, trade bodies and governments must work together to set the right framework and establish the platforms and protocols needed for a new way of sourcing and managing building materials globally.

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