Circular Economy Circular Economy Innovation & Technology

Racing to Zero, Part 3:
Reimagining Construction for Circularity

The latent circular revolution is slow in getting off the ground in construction — but it’s time to reimagine and transform the industry. Here we explore eight key shifts to help construction actors rise to the circular challenge.

Brand Provided | By Mike Townsend | Published 2 years ago | About a 25 minute read

Image: Circle House is Denmark’s first social housing project built according to circular principles. | Creative Denmark

Last time out, we connected the dots between radical climate action and the opportunity presented by a circular economy, focused on the re-use of vehicle parts — and how an emphasis on reuse and refurbishment, rather than downcycling, can enable up to 50 percent savings in embodied carbon emissions, while also preserving 98 percent of commercial value.

While the climate math certainly stacks up for reuse in the automotive value chain, how transferable is this insight for other sectors? In this third and final part of our series, we’ll investigate how the construction sector — with its massive climate impacts — can take a radical leap towards embracing circular principles.

The big one!

Buildings are responsible for 39 percent of global energy-related emissions — split between lifecycle emissions for heating, cooling and power at 28 percent; and embodied emissions associated with materials and the construction process at 11 percent. While lifecycle emissions have tended to receive more attention in recent years — through improved thermal performance of buildings and utilising renewable energies — embodied emissions provide the next big challenge in this important sector.

The World Green Building Council calls for a reduction in both embodied and lifecycle carbon — with a special emphasis on reducing embodied emissions, towards net zero by 2050 — supported with a near-term target of 40 percent reduction in embodied emissions by 2030. Tackling this important challenge will mean a complete rethink in resource selection and management.

But, that’s OK; there’s plenty of opportunity to exploit. The construction industry is the single largest consumer of resources and raw materials on the planet, consuming more than 3 billion tonnes of virgin resources each year. The industry is also notoriously wasteful: construction and demolition waste (CDW) accounts for roughly one-third of total waste in the EU, and around 40 percent of solid waste in the United States. And while there has been a big emphasis on recycling of CDW — in the UK, 90 percent of all CDW is "recovered" — these materials are mainly downcycled for future use as aggregates, so the opportunity for reuse and preserving embodied emissions has yet to be harnessed in any meaningful way.

With its scale of impact and opportunity, the construction sector should make a vital contribution towards reducing embodied emissions by embracing circular principles. According to the European Environment Agency, circular strategies in buildings can deliver up to 61 percent savings in materials-related emissions — so, the potential for reining in industry impacts is huge.

As Sara Edmonds, Director of Studio seARCH architects and coordinator with Architects Climate Action Network, puts it: “We need to completely reimagine architecture, moving from degenerative to regenerative practices.” This revolution in thinking will need to include the drive for circular systems; but how can we close the loop in construction, linking extensive reuse and recycling with radical reduction in embedded carbon emissions?

It’s time to completely reimagine construction — based on new possibilities — by joining up all the dots on eight interconnected shifts that will help us deliver circularity and radical climate action at scale in the industry.

Reimagine the ‘need’ — preserve and reuse strategic assets

The first shift starts with a simple question: Do we really need to build at all, or could we repurpose an existing facility? After all, the most sustainable building is the one we don’t need to build, right?

At first glance, there is nothing new or spectacular about the idea of repurposing old buildings. Yet, there has been a tendency to dismiss this obvious opportunity in recent times, in the pursuit of shiny new offices, shops and housing. Yet, if we look through a different lens, we can start to appreciate the amazing range of resources and new possibilities available to us through these untapped assets.

There are millions of empty homes and many vacant commercial buildings around the world. In the UK, a staggering one in seven shops are left vacant as the economy and retailers struggle to cope among economic shocks and commercial shifts. How could these facilities be put to better use? Repurposing redundant factories in the US presents a great opportunity for on-shoring and re-localising economic activity (generating jobs within a more circular economy, perhaps?).

By reframing our needs, we can start to see existing facilities as a canvas on which to paint a new, vibrant picture of a more sustainable built environment. For example, the collapse of Debenhams plc — a former chain of 160 department stores across the UK, Denmark and the Republic of Ireland — created the opportunity to repurpose vacant retail facilities.

The former Debenhams store in Sunderland, UK, has been reinvented as Prop Recs — an arts venue and community hub — incorporating a music venue, record shop, café, gallery, kitchen, youth mental health trust, and a market for teenagers to sell products. The £1 million renovation project took 3 years to complete — restoring an existing asset to useful purpose and delivering much-needed social improvements, while avoiding the creation of unnecessary demolition waste and the future impact of embodied emissions associated with a new build project.

There will, of course, always be situations where organisations might still prefer new buildings. Leading retailer and sustainability pioneer M&S recently reached the controversial decision to demolish and rebuild its aging flagship store in Oxford Street, London. Opponents of the project have warned that the new structure will generate additional embodied emissions to the extent that would require 2.4 million trees to be planted to offset the new build. To provide some perspective: Offsetting this single project requires almost as many new trees as are planted across the whole of England in a single year.

The scheme’s architects pose a reasonable counter argument, asserting that it’s not always right to refurbish old structures — pointing out that the new building will generate much lower lifecycle emissions, and will embody much less carbon by reusing 90 percent of existing materials.

The architects estimate that the total footprint of the new build project will break even after 16 years, which means that net carbon savings will start to accumulate in 2043 and beyond. Although, there is clearly a significant burden of new upfront emissions generated in the short term — a point not easily dismissed, as we face near-term targets for radical emissions reduction by 2030.

Furthermore, for M&S to maximise the carbon savings opportunity associated with reused materials, it will need to minimise downcycling and maximise genuine circularity — a rarity in construction practice at this present time. In Northwest Europe, only 1 percent of building elements are currently reused. There will, no doubt, be good commercial reasons for choosing the rebuild option; but it does feel like an opportunity lost for circular leadership and maximising reuse.

Looking further, in practical terms, we might also start to appreciate the role of our existing stock of buildings as material banks, providing a catalogue of assets and resources with all those embodied emissions locked in. Through this lens, we definitely start to see old buildings as a resource, rather than a pile of waste to be discarded.

Reimagine design — the materials bank

Taking this step requires us to transform our design process and philosophy to reimagine buildings and infrastructure for circular demand and circular design. UK GBC provides useful guidance for a new ethos in circular construction, designing buildings for ‘optimisation’ — including a focus on longevity, flexibility, adaptability, and design for assembly, disassembly and recoverability. Sounds great; could it work in practice?

The Circle House — a 60-unit social housing project in Lisbjerg, Denmark — provides a living example of rethinking design through the lens of circularity; not only considering functionality, aesthetics and value, but also accounting for buildings as materials banks, considering what happens to their assets and resources beyond their first intended lifetime.

Circle House challenges conventional the build-use-dispose model by designing and using components that can be easily taken apart — somewhat like a LEGO kit — with disassembly and reuse considered for every part of the building. As we might expect for such an approach, a great deal of innovation was required. For example, conventional concrete panels did not work for reuse; so the team created a new type of concrete panel that could be easily assembled using bolts. The building can be taken apart, simply by unbolting panels, ready for reuse in another building.

Circle House also has a higher degree of flexibility during its lifetime, with the opportunity to reconfigure layouts or extend units; and at the end-of-first-life, 90 percent of its components and resources can be disassembled and reused, retaining much of their initial value.

Circular design tends to place an increasing emphasis on modern methods of construction — focussing on standardisation, mass production and factory-based, off-site construction.

While there is nothing new in prefabrication, there is now an opportunity to do it better with design and construction structured and digitised around building information modeling to provide an accurate and integrated representation of a building across its whole lifecycle, which also allows for collaborative working across multiple actors within a single intelligent process.

Mexico’s VMD Prefabricated Houses can be ordered and customised online, and built in 99 days with sustainable materials. Going further, Geoship’s bioceramic, climate-resilient dome villages inspire us to completely reimagine housing design — a regenerative approach with a design life of 500 years, with 90 percent less embodied CO2 than a conventional home, and more affordable: almost 50 percent cheaper than conventional-build housing. They look great, too. The visionary startup plans to produce its home kits in automated microfactories throughout the US and the rest of the world.

Design for circularity involves a major shift in design thinking, mindful that we need to deliver radical savings in embodied carbon emissions. And, of course, rethinking design drives us deeper into rethinking materials, specifications and standards.

Reimagine materials — carbon as a resource

As Architecture 2030 CEO Edward Mazria puts it: “By 2040, all building products should require no carbon to create.” That’s where we need to get to on embodied carbon: real zero by 2040. It’s time for more radical innovation in building products and materials technology.

We can already choose many inherently sustainable and low-carbon products and materials — for example, sustainable or reclaimed timber, low-carbon steel (SSAB is now producing fossil-free steel in Sweden) — or even carbon-based cement. Our selection of suitable materials should be based on durability, value for money and embodied carbon emissions; but we might also think about the potential for reuse of circular elements and components, and keeping modular assets in use.

Image credit: Beyond Zero Homes

COP26 House, designed and built for the Glasgow summit by Beyond Zero Homes, provides a great demonstration of what can be achieved using lower-embodied-carbon materials within the context of circularity and reuse. The single dwelling involves an emphasis on lower-embodied-carbon building products, especially timber — which acts as a carbon store as well as a renewable material. Altogether, this achieves a 59 percent reduction in embodied carbon emissions — avoiding 78 tonnes of embedded CO2 — compared with a conventional house, or 22 percent reduction, when measured against the most stringent carbon target. This radical leap in performance is achieved by careful selection of timber products all through the house — even the roof covering is timber! Maximising low-embodied-carbon design means much less reliance on offsetting in our quest for net-zero status.

There’s one further materials advantage: COP26 House also stores more than double its embodied carbon in terms of biogenic (sequestered) carbon emissions. Of course, biogenic emissions can be released back into the atmosphere, if and when the building is demolished and products are disposed of through incineration or decomposition; but COP26 house has been designed for disassembly (using standard components) and reuse at the end of its 60-year design life, ensuring the sequestered emissions remain locked into their natural carbon store.

As we rethink design and materials, it becomes evident that we will also need to source and manage our resources in completely different ways.

Reimagine sourcing and supply — creating new markets

By placing more emphasis on material banks within existing buildings and infrastructure, we need to completely reimagine materials supply and management, creating the need for new markets and logistics solutions for used materials at scale.

International property company Grosvenor Group is picking up the challenge. Project Director Steve Gilchrist imagines a future where all elements are tagged with readily accessible data, where the used materials from a redundant building are simply removed and resold on a second-hand market: “Future design should be more flexible in its specification to allow a range of materials sourced on a second-hand market to be used… carbon will be at the centre of it all, and surely re-used is better than new?”

Taking the challenge forward, Grosvenor is seeking partners to explore new approaches for materials reuse in London. It might, perhaps, draw inspiration from developments in other markets, when thinking about developing new suppliers and supply markets.

Genbryg.dk is Denmark’s largest online shop for used building materials, with over 76,000 products in stock and over one million webshop visitors every year. The company specialises in the purchase and resale of used building materials — including used doors, windows, lamps, floors, door handles, timber and much more. Genbryg has its own design studio, which develops sustainable interior design concepts for restaurants and shops. It has also produced 1800 m2 of refurbished wooden wall panels for the prestigious Copenhagen Towers development in the Ørestad district of Copenhagen.

Lendager UP is another Danish company, originally founded because of the lack of suppliers for upcycled building products. The circular resource company works with resource optimisation and the development of upcycled products, to ensure the value of used materials is maintained and enhanced — ideally creating a product with an even longer lifespan than the original. This process requires total stewardship and lifecycle management of products and materials.

For a number of years, Lendager UP has prepared material analyses of older buildings and calculated the value of demolition fields. It sees a future where all old buildings are digitally registered with the necessary data in the form of material passports; Lendager UP has developed digital material passports on the Circle House project.

In response to the need for a new supply market, Lendager UP has effectively developed an interesting template for a new type of circular resource company — an essential new position within a circular construction value chain. Materials stewardship is needed throughout the construction process, not least at the demolition end of things.

Reimagine process — demolition becomes harvesting

Image credit: Unbuilders/Facebook

Let’s switch continents for a great example of a company that has really sought to rethink the demolition process, fully integrating the idea of materials stewardship. Unbuilders — a great name to start with — is a company of salvage experts based in Vancouver, Canada.

Basically, Unbuilders takes buildings apart to maximise reuse and minimise waste. Of course, any demolition contractor worth its salt, these days, will claim to do the same. Yet, we can only watch and marvel at the care and precision taken by Unbuilders’ team of carpenters, roofers, framers and trades people, as they painstakingly disassemble properties layer by layer — upcycling resources into the supply chain. Recovered wood from a 1930s property was remanufactured into bars, floors and table tops at a local restaurant; the team achieved a salvage and recycle rate of 99 percent.

Their impressive ‘harvesting’ process also helps to enable societal benefits — deconstruction is understood to generate up to six jobs for every single traditional demolition job.

Ah, but surely this labour-intensive process will be much more expensive? Well, here’s the thing: With careful business model innovation, Unbuilders can provide its more-sustainable service for almost half the amount of a traditional demolition service. The key enabler here is the ability to attract federal and provincial tax credits, which more than offset any premium in process cost. In one sense, this model might be considered subsidised; while any traditional demolition process will involve many hidden, unpaid costs — treated as ‘externalities’ — such as the cost of waste and pollution.

Going forward, we can all expect to pay the ‘true costs’ of doing business in all sectors, starting with carbon price — but also widening the field to full natural capital accounting. Getting to ‘true cost’ will tend to correct any market price anomalies and render sustainable solutions more cost-effective, every time.

While the Unbuilders example focuses almost exclusively on timber dwellings, it shows us what is possible if we can reimagine demolition for all building forms and infrastructure — maintaining products and resources at their highest level of use, becoming stewards of circular materials, and drawing on business innovation to ensure the proposition works commercially.

From this point, we can then start to imagine building out the rest of the circular construction value chain — configured to manage and restore building assets, products, materials and resources.

Reimagine value chains — based on circular collaboration

Building the circular value chain in construction will necessarily involve new partnerships and collaborations.

Both Circle House and COP26 House involve collaboration between actors through the entire value chain. Development of the Circle House project involved collaboration across 25 different organisations — including architects, circularity consultants, entrepreneurs, contractors, the municipality, component manufacturers and materials suppliers — all taking time to explore issues and questions that had never been considered on construction projects. It’s not possible to develop this level of circular innovation without radical collaboration.

Going through this process raises all sorts of questions about the role that various actors might play, going forward. We cannot expect to develop the circular value chain without making changes in what we do. We might consider the role of the contractor, for example: Should we remain engaged simply as constructors of buildings; or do we extend our position, towards becoming stewards of zero-impact buildings and reusable resources within a circular economy?

Do we have the capabilities to fulfil this role, as we are currently configured; or do we need to work in partnership with materials suppliers and logistics companies to develop the necessary infrastructure for managing circular products and resources? Perhaps, we might even take the strategic opportunity to acquire and vertically integrate these new core competencies? And, if contractors don’t act, someone else will, no doubt, fill the void; perhaps new market disruptors will create a completely new type of construction company?

But, of course, for circular construction to really take off, it has to work commercially, as well as practically.

Reimagine commerce — capturing long-term circular value

Going circular in construction means designing for longer, multiple-useful-asset lives. This will require us to design and manufacture high-quality, longer-life, reusable circular products, but will most likely mean our buildings become more expensive, right?

Perhaps not. Through business model innovation, there is an opportunity to spread the apparently higher initial costs of production across multiple, extended product lifecycles. We don’t necessarily have to recover all production costs at the initial point-of-sale; if asset producers retain ownership of circular assets and products, this enables both life-long responsibility and income, while ensuring greater affordability for each building user.

This model will, of course, have implications for business cashflow, as we experience in all circular leasing/rental business models, but this shift has been very effective in other sectors, where it can be 25 percent cheaper to rent high-quality products, rather than buy cheap linear-economy items. The key to circular commercial success is all about extended product lifecycle, enhanced resource utilisation, with less money tied-up in resources and waste, enabling more value to be shared between customers, retailers, manufacturers and suppliers. We can learn much from this approach.

Similar levels of commercial innovation can also work in construction. The municipality of Venlo in the Netherlands wanted to construct its new town hall using only reusable materials. The building was designed based on circular principles, including designing for disassembly and materials banking, and with long-term material health in mind. In terms of procurement, the project involved an innovative commercial deal to incentivise materials stewardship: The client asked material suppliers to provide guaranteed take-back systems at the end of the building’s life, which would guarantee that materials keep their residual value with pre-agreed prices. This long-term perspective creates a continuous cycle of resources, and incentives for maintenance and lifecycle management of resources.

This approach requires a different approach to cost planning and management — to include accounting for the residual value of assets, and ensuring that materials harvesting is commercially viable. And clearly, the ability to capture value through disassembly presents a major opportunity.

As Anders Lendager of Lendager UP realised, there are large sums of money to be saved by harvesting resources for circular construction. On one of its projects in Norway — a business area being converted to 450,000 m2 of residential development — Lendager prepared a material analysis of the entire project, and found roughly $160 million of building parts and resources — including windows, doors and many other components that could be reused. The building contractor then harvested these resources as assets, towards the construction of the new building. There’s more money to be made in circular resources than there is in linear waste!

Harnessing this opportunity requires a shift in mindset; no longer seeing used resources as waste, but as a viable economic resource. There is clearly a major opportunity to scale-up resource bank thinking across the entire construction value chain, harvesting and managing resources and creating new supply markets.

This shift in commercial innovation can feel like a bridge too far for some players; it really does challenge our thinking on how and when we make our money in construction, and requires a more holistic mindset to appreciate new forms of commercial innovation for circular business success. Which brings to our eighth and final shift, underpinning the whole circular transformation, the need to reimagine skills and capabilities.

Reimagine capabilities — repurpose skills and expand roles

There are clearly major implications for the demolition sector, developing harvesting at scale, but there are also changes for all actors through all stages of the construction process, whether in briefing, design, procurement, cost planning, construction, logistics, and so on.

For example, there’s a great opportunity for procurement and commercial teams to take a leading role — repurposing and extending their commercial skills for circular commercial innovation, including: whole-life cost modelling, managing costs over multiple asset lives, finding new ways of making money (business models), ensuring affordability, and developing the maturity and scale of supply markets for new and innovative materials.

The common thread across all functions is the need for a mindset shift, involving systems thinking: seeing integrated sustainability and circular principles as an opportunity, not a burden; liberating and unleashing new creativity, ideas and solutions; experimenting and challenging standards. Without this shift, we remain stuck within same paradigm, destined never to progress.

It is interesting to see the emergence of new educational programmes for circular construction at places such as TUDelft in the Netherlands and University of Brighton’s School of Re-Construction in the UK; but there are major implications for mainstream education and skills provision at all levels.

The recent report by Green Alliance explores what is needed to close the green skills gap in the UK: A much needed report, which includes a focus on construction skills, and further consideration of the circular economy, but doesn’t quite join-the-dots and develop new insights for circular construction skills. There’s clearly more work to be done on developing skills provision for circular construction.

Above all, we need what Paul Polman calls courageous leaders — unafraid to try bold new approaches: “so strongly purpose-driven that they understand it is uncomfortable to set targets that you don’t know how to achieve, but that are needed.” Without courageous leadership, we will see little real change.

Moving forward: a time to reimagine industry change

A circular economy offers the single biggest opportunity for radical climate action in construction, which could deliver 40-60 percent reduction in embodied emissions.

While there is little visibility on global progress towards circular construction, we do know that only 1 percent of building elements are currently reused following their first application in North West Europe. A large number of elements are technically reusable, they end up being recycled by crushing, melting or disposal. The result is a high environmental impact and a net loss of economic value — we can and must do better than 1 percent reuse.

Can any serious player in the construction industry hope to deliver net zero and beyond without embracing a circular economy? Yet, not many actors in the value chain have developed robust circular economy strategies and, quite importantly, made the essential link with radical climate action through reduction or embodied emissions. There is much work to be done.

Arguably, a circular economy also offers the construction industry its biggest catalyst for industry transformation in many decades; even more than strategic procurement, partnering, supply chain management and lean construction were in the 1990s and beyond. This is a once-in-a-generation opportunity to reinvent the industry for a sustainable future.

While going circular in construction presents a great opportunity, this also means great change — a major challenge for all those that have prospered under the old order, where relying on former glories can present a significant barrier to innovation and change. Real change is hard.

We’ve been here before, of course. Each new challenge and industry review leads to some level of improvement; yet despite pockets of great innovation, the industry often tends to change less than is really needed, and over a much longer period of time.

This time it has to be different: The scale of the challenge is enormous, and the pace we need to move at requires a genuine transformation. This level of change cannot be achieved in isolation by one or two innovative companies — a circular transformation will necessarily involve the whole value chain, working in concert to orchestrate circular and systemic change.

Have we got what it takes to go circular in construction? All the solutions are there — we just need to join them up and integrate within a new construction process. The only real barrier is ourselves. And to resolve this, we simply need Michael Pawlyn’s mindset of Possibilism — taking greater agency to explore and create the new art-of-the-possible: “We need plans for the future with numbers that add up.” We need to combine evidence-based action with the ability to manage uncertainty.

And with that comes tonnes of low-carbon innovation, including a new model for circular commerce. And, if we can crack this challenge within a complex and entrenched sector such as construction, we can deliver radical climate action everywhere.

8 takeaways for driving a circular economy and radical climate action in construction:

Reimagine the need: Rethink current stock of buildings and infrastructure — not just in terms of their form and function, but also their potential as live resource banks to be drawn-down and reused at the end of each useful asset life.
Reimagine design: with design for circularity, longer lifecycles, disassembly, refurbishment, remanufacture and reuse — aiming for 90 percent reuse of components, rather than 90 percent downcycling.
Reimagine materials: Selecting only low-carbon, biogenic, reusable products and materials set within the context of modular design for disassembly and reuse.
Reimagine sourcing and supply: with an emphasis on materials banks, all construction products and materials harvested, and kept at their highest level of utility and value — working with a ‘custodian’ mindset to manage products and materials through multiple lifecycles.
Reimagine process: minimising waste, maximising reuse; where demolition becomes resource harvesting and products and resources have digital passports — enabling total stewardship and circular lifecycle management.
Reimagine value chains: based on circular collaboration, involving new partnerships and collaborations, exploring challenges and new innovations, leading to new roles, new types of business organisation and business opportunity.
Reimagine commerce: incorporating business model innovation and cost modelling, new commercial deals and incentives to enable long-term management of resources and to capture continuous circular value.
Reimagine capabilities: Repurpose existing skills and expand the role of all actors through the value chain, built on new integrated mindsets for sustainability, circularity, systems thinking, and possibilism — augmented with courageous leadership.

Mike Townsend

Founder & CEO
Earthshine

Mike Townsend is founder and CEO of Earthshine — an international consultancy and training provider focused on circular and sustainability transformations in business, economy, and society — unleashing the capability within people and their organisations.

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