Circular building materials: Carbon saving potential and the role of business model innovation and public policy

Abstract

Buildings are responsible for a third of global greenhouse gas emissions, with much of their life cycle impacts stemming from embodied impacts of building materials. Both at EU and Member State level, circular economy and resource efficiency policies are promoting production of lower-impact building materials with secondary material input. However, secondary material strategies do not result in carbon saving by default, and depend on businesses developing effective and economic applications that can overcome the many barriers to closing material loops. This paper aims to advance understanding of the relevance of secondary material for decarbonisation of the building sector, as well as the interplay of business model innovation and policy instruments in this transition. We used a comparative case study of three pioneering Scandinavian companies that produce circular building materials to estimate the carbon saving potential of using secondary material. We also examined business model innovations to implement strategies, and companies’ experienced and desired policies to help remove barriers. The results show clearly that all three cases offer potential for carbon savings. As the savings vary significantly, findings suggest that careful consideration of affected processes and markets is a key to attaining carbon savings. Business model innovations to enable secondary material use involve establishing key partnerships to access secondary materials, developing recovery process and technology, targeting customer segments that value lower environmental impacts, and considering life cycle costs. Public policies that can help companies remove barriers include 1) incorporating reuse of higher material value in construction and demolition waste targets, and 2) incentivising waste collection and recovery markets to offer recovered material at higher value.