Published 8 months ago.
About a 4 minute read.
The concrete industry is responsible for 8% of all global carbon
emissions; and 30-40% of today’s solid waste is created through the construction and maintenance of the built environment.
Circular models for production and reuse of concrete and cement could produce
€110 billion in net value and avoid or mitigate two billion tons of CO₂
emissions by 2050, according to a new McKinsey & Company
This will be driven by capture, storage and usage of CO2 from cement and
concrete production; reuse of energy from waste material; and recirculation of
materials and minerals across the built environment. Circular cement value chain: Sustainable and profitable projects that adoption of circular
technologies could also decarbonize 80 percent of all cement and concrete
emissions by 2050.
“Applying circular principles to cement and concrete would not only help
decarbonize the built environment but generate enormous economic value,” says
Jukka Maksimainen, global
co-leader of McKinsey’s Global Energy & Materials practice. “The cement industry
is perfectly positioned to create closed loops for CO2, materials and minerals,
and energy. We estimate each of these circular technologies will be
value-positive by 2050, while some are already more profitable than today’s
typical solutions. This will also drastically reduce global emissions and 30 to
40 percent of the world’s solid waste created through construction and
maintenance of the built environment.”
Cement and concrete are the linchpins of the built environment; and their
global demand has nearly tripled over the past 20 years with the proliferation
of urban development. Concrete is one of the most consumed materials on our
planet, second only to water. Today, the concrete industry is responsible for 8
percent of all global carbon emissions; and 30 to 40 percent of today’s solid
waste is created through the construction and maintenance of the built
Truly sustainable businesses address the many interconnected social and environmental challenges that brands and their customers face — and strive for net-positive outcomes and impacts, in addition to growth. SB's latest guidebook can help your company navigate the path toward enhanced brand sustainability with key insights, actionable steps and a holistic framework that defines a roadmap for good growth.
The McKinsey report posits that adoption of circular
could offset more than half of the losses to the cement industry from rising
costs; and adoption of circular technologies could be further accelerated by
rising CO2 prices, landfill costs and decarbonization subsidies. The report
reveals that recycling and reusing construction materials and minerals alone
will add nearly €80 billion of annual EBITDA while reusing concrete modules and
structures will drive an estimated €24 billion of net value by 2050. Regions
with high landfill costs and construction and demolition waste will also reap
major benefits from the use of alternative fuels from waste material, with the
global average share of alternative fuels reaching 43 percent by 2050.
“Cement and other industry players should engage in circular business-building
and use circular technologies to react to evolving financial risks,” says
Sebastian Reiter, Partner at
McKinsey's Global Energy & Materials. “The total value at risk from rising CO₂
prices and landfill costs could reach approximately €210 billion by 2050 and
this will significantly accelerate uptake of circular technologies. For example,
our research shows that technologies utilizing CO₂ can create positive economic
value at carbon prices of approximately €80 percent of CO₂, while using
construction waste as aggregates for concrete production avoids landfill costs.”
More and more innovators have developed potential solutions to help address the
materials’ environmental impact — including a clay-based
a bio-enhanced, ecosystem-enhancing
for coastal infrastructure, a cement cured with captured CO2 instead of
and another cement made from captured
that produces 60 percent fewer emissions and costs 10 percent less than
conventional cement. Other technologies with high potential include the use of
CO2 for enhanced recarbonation of construction and demolition waste, recycling
of waste into gravel for roadbuilding, and use of alternative fuels from energy
waste. McKinsey suggests this will be achieved by cement companies adopting
circular business models such as digital marketplaces for waste and using
circular technologies to adjust to evolving business risks in each region.
To take advantage of these opportunities, McKinsey suggests two key actions:
Engage in circular business-building: Embracing digital marketplaces for
waste materials; using technologies that facilitate circular design and
standardization; and creating customer-centric, circular business models.
Cross-sector collaboration should enable CO2 offtake opportunities in other
industries — for example, using CO₂ as a feedstock for hydrogen production or any number of consumer products.
Use circular technologies to react to the evolving financial risks:
Building cost-benefit positions based on locally varying CO2 prices,
landfill costs and regulatory frameworks, and the amount of waste material
available in each region — ensuring offtake agreements are available for
circular products in each country, such as the 100 construction companies
across 10 countries that recently joined the UN Race to Zero campaign.
Published Mar 8, 2023 1pm EST / 10am PST / 6pm GMT / 7pm CET