A new report reveals the construction sector’s carbon dioxide emissions could be reduced by up to 75% or 4 gigatons of carbon dioxide by 2050 through the establishment of a circular economy.
The report, published in partnership between McKinsey & Company and the World Economic Forum, also found that circularity could lead to an annual net profit gain of up to $46 billion by 2030 and $360 billion by 2050.
Commenting on the report, Sebastian Reiter, a partner in the Munich office of McKinsey and co-author of the study, said: “The construction sector is a crucial industry for reducing greenhouse gas emissions in the long term.
“One-third of material consumption and 26% of global carbon dioxide emissions come from this sector. At the same time, this sector employs 7% of people globally and accounts for 13% of economic output.”
The construction sector is a crucial industry for reducing greenhouse gas emissions in the long term.
According to the report, establishing circular loops could reduce CO2 (Gt CO2) by up to 4 gigatonnes by 2050. The report also states that the recirculating materials and minerals, carbon capture and storage, and carbon capture and utilisation are each expected to contribute around 40% of the total decrease by 2030.
The report considers the potential for reducing carbon dioxide and potential net value gain for six building materials: cement and concrete, steel, aluminium, plastics, glass and gypsum.
Circularity in cement has the potential to create the highest value pool across materials, with an estimated net value gain of $10 billion in 2030 and $122 billion in 2050, according to the report.
The report found steel is already “highly recyclable”. The opportunities for circularity in aluminium rely on designing for reuse, increasing recycled material use and adopting alternative fuels, which could reduce aluminium-related CO2 emissions by up to 89% by 2050, the report found.
According to the report, designing for reuse and modularity, increasing regrind plastics, and using alternative fuels, can decrease CO2 emissions from plastics by up to 62% by 2050. The report also found designing for reuse and modularity and increasing cullet use can decrease CO2 emissions from glass by up to 41% by 2050.
Jukka Maksimainen, senior partner in the Helsinki office of McKinsey and co-author of the report commented: “Our analysis of the construction sector shows an extraordinary potential for circularity – not only through carbon dioxide savings but also on a financial level.
“Nevertheless, we see hardly any solutions in the market that address this issue at scale yet – this makes it even more essential that we identify scalable solutions and make them visible.”