This section is based on the key findings of a circular economy report (Welsh Government, 2017) commissioned by the Welsh Government funded Constructing Excellence in Wales. It includes how circular economy principles may be applied to the built environment, the size of the economic opportunity, challenges and recommendations on how the principles could be implemented across the sector to realise the benefits.
The following are some reasons why a circular economy approach for the built environment is required:
- Resource and energy use;
- The threat of rising commodity prices;
- Resource supply constraints (especially wood & timber);
- Stricter landfill requirements;
- Higher energy efficiency targets/standards for buildings;
- Decarbonising construction
- Competing uses/priorities for materials; and
- Low residual value of the materials in end of life buildings
The scale of the opportunity for the construction sector to adopt the principles of the circular economy is significant given it is the biggest consumer of raw materials (EEA, 2011), with eighty per cent of all materials produced used in the built environment. Notably the sector is the largest producer of controlled waste in Wales (EAW Survey, 2005), reflecting a broadly similar position across the whole of the EU.
It is possible to achieve a positive residual value by adopting a more adaptable approach to building design, where disassembly and reuse are considered and planned in advance. Applying circular economy thinking can reduce construction and refurbishment time and associated costs, maintaining the value of the asset whilst protecting the rental yield.
Research commissioned by Constructing Excellence in Wales has demonstrated a potential economic opportunity to Wales of an additional £1 billion per annum by 2035 through adopting a circular economy approach in the built environment. This is an increase of 12.5 per cent in the turnover of the Welsh built environment sector. This figure is consistent with a growing body of research that identifies the economic opportunity and the importance of the sector in delivering. A circular economy approach has the potential to generate 7,300 jobs (gross) in Wales.
The circular economy approach
In order to realise the benefits the sector will need to embrace a different approach to its delivery. It will be necessary to move towards a more collaborative approach to working across the supply chain in an earlier and more integrated manner than is currently commonplace.
In applying the circular economy to the sector it is key that any methodology demonstrates:
- a “whole life approach”;
- circular economy principles;
- value opportunities; and
- the inter-relationships between the built environment, other sectors and the natural environment
Consideration needs to be given to examining the whole construction project as one and understanding how the numerous elements interact and co-exist with each other over time. The ‘product’ is the final built asset and various construction materials are the ‘components’.
The following are key elements for circularity:
- The components need to be as resource efficient as possible (for example incorporating as much recycled content as possible) and should have as long a life as possible.
- As little of the components as possible should be wasted during the construction phase.
- Those that are unavoidably produced as waste should be kept separate for reuse or high quality recycling.
- When an asset is no longer required, it may be dismantled and its components (e.g. bricks, blocks, concrete) can be seen as a source of raw materials for reclamation and re-use as a priority, and as much high quality recycling as possible, and zero landfill. Components should be selected for their recyclability, and should be non-hazardous.
Construction is only one phase within a project as there are a number of inter-connected stages, these include concept, design, occupation and deconstruction/ demolition. These phases are linear in process but circular due to the inter-relationships between decisions and actions at one stage impacting further along the process. Circularity must be built in throughout the process. To achieve circularity no phase can work in isolation. The design stage is critical given at this stage decisions are made that impact 80% of the waste generated on a project.
The approach outlined above reflects:
- A value chain by focusing firstly on on-site reuse, refurbishment or recycling opportunities;
- Closed Loop - Connection to external collections and the ability of products, components or parts to be able to be entered back into the cycle through reuse, refurbishment or recycling and this returning back into the construction cycle by the user.
The transition to a circular economy brings significant challenges within all phases of construction:
- Transforming mindsets: A lack of client awareness/demand and/or associated negative perception is a big risk to the successful implementation of circular economy principles within the sector. A change in economic model may be perceived as risky, with associated costs and benefits that are realized in the future. This will require a strong business case for change to be demonstrated.
- Legislative barriers: The unintended consequences of the existing waste regulatory framework, for example definitions may act as a barrier hindering trade and transportation of resources/products for reuse/remanufacturing.
- Infrastructure: There needs to be investment made to ensure there is the infrastructure in place to enable products to be reused or recycled. This needs to include physical infrastructure to ensure good quality reused and recycled materials as well as generating markets for recycle, secondary materials and by-products.
- Supply chain: Currently there is limited information, knowledge and economic incentive for key elements in the supply and maintenance chain e.g. chemical composition and strength. This makes it difficult to repair, refurbish and/ or recycle materials, reducing the value and recovery opportunities. In addition, a lack of supply chain integration means that often decisions are made in isolation with little consideration for the wider impact.
- Producer responsibility: Products/components are currently on the market that are unable to be disassembled/repaired/replaced. A lack of quality assurance, traceability and the absence of certification means that even products/components that are capable of being recovered are often not identified and segregated making it very difficult. There exists a widespread planned obsolescence in products, limiting reuse, repair, refurbishment and recovery opportunities.
The following opportunities would support and accelerate a transition towards a circular economy in the built environment:
- Government policy: A strong policy on sustainable development can establish a framework providing a clear direction. Supporting innovation towards a more circular economy is key. Planning and building regulations could actively encourage development to maximise resource use, supporting the use of recycled/secondary materials and by products. Tax raising powers could be used to apply levies to virgin raw material to favour recycled alternatives. Lower VAT could be applied to products containing recycled content to incentivise their use.
- Role of the public sector: The public sector usually spends a large proportion of its budget on construction. This makes procurement to consider circular economy principles a significant opportunity. The education of the public sector client is key to bringing about change within the economic approach.
- Resource availability: Current research indicates that resource costs are likely to increase due to volatile markets and demand pressures. Within many parts of the EU there is a large volume of secondary materials and by-products, generated in large part from metal refining and power generation activities. The utilisation of these materials would provide volume aggregate materials bringing a positive environmental impact, reducing the carbon footprint and addressing material legacies.
- Economics: Adopting circular economy practices makes economic sense. Achieving Growth Within identifies a total economic benefit of up to €135 billion by 2030 in reduced utility, repair and maintenance cost, in addition to a €105 billion investment opportunity between now and 2025. Arup have identified that designing steel for reuse could generate high potential value for building owners, estimating savings of 6-7% for a warehouse, 9-43% for an office, and 2-10% for a whole building, with up to an additional 25% savings on materials.
- Changing the way we use our built environment: We need to change the way we think about how we use our built environment. We currently under occupy our buildings, typically 35-40% of offices in Europe are occupied, the same report identified that within UK homes 49% are under occupied.
Developing a whole circular economy narrative, with collaboration across the entire supply chain and the ability to design for the whole life, including the end of life is necessary to fully realise an economic return. To truly evolve into a circular industry there will be a need to bring together the process start and end, aligning design and demolition to remove the current disconnect. Design practices will need to consider what and how materials are used, are extracted and reused within the built environment, with demolition removing materials to protect the reuse value.
The following actions are considered key elements:
- Materials selection: Materials will need to be selected with consideration given to their end of life, there are numerous commonly used building materials that have no alternative recovery option other than landfill.
- Standardised components: There is a need to look towards manufacturing principles, such as component standardisation to deliver efficiencies including enhanced time in use, extended life, facility to repair/refurbish.
- Design for circularity, including:
- Design for flexibility/adaptability to extend life;
- Design for deconstruction – requirement to consider end of life in current design including reuse of asset/elements/components.
- Design for longevity – eliminate current practice to design planned obsolescence within asset and products.
- Design for separation/on site management/demolition.
- Design for reuse/site management/demolition.
- Buildings as materials banks
- Building core competencies: to facilitate product reuse, recycling, cascading - requires advanced skills sets/information sets/working methods.
The following are considered key areas for government policy development:
- Market development: Quality supply and demand: There is much to be done to support the development of markets for the large quantities of by-products, secondary materials and waste, such as IBA, PFA and steel slags. Many of these legacy materials need assistance to develop markets and routes to market for the type and volumes of these high quality by-products/secondary materials and recyclates.
- Sector support: The construction sector is fragmented, this is true across the industry and government. This does not provide a solid basis for end of life material extraction. There is a need for a cohesive construction strategy to be developed to provide clear direction and remove barriers to scalability and applicability.
- Development of infrastructure: The sector consumes and generates large volumes of materials. There will be a need to develop cost efficient, better quality collection and treatment systems and effective segmentation of end of life. Without this investment the leakage of materials out of the system will continue, undermining development towards circular economy.
- Role of the public sector client: The development of consistent approaches to the design, build and deconstruction of public funded construction with consideration of circular economy principles would provide clear direction creating stable investment and development platform for green growth.
It is important to ensure that the necessary policies and appropriate interventions are in place to deliver the necessary transition to make the most of the opportunity presented.
Key to the application of the approach will be design, influencing at the earliest possible opportunity. Adopting circular design will require the sector to embrace new ways of working, collaborating at earliest possible stages across the supply chain, thinking for the long term and embracing innovation in product and process.