The construction industry is the largest consumer of raw materials and other resources worldwide. Overall, the sector is responsible for some 36 percent of global emissions and around one third of total waste production, which was estimated to be in the region of 4.2 billion tonnes as of 2023. This volume is mainly due to the linear practice of building and demolition. Circular economy methods such as reuse or recycling could help to make the construction sector significantly more sustainable.
But despite the advantages of circularity, there are still several obstacles in practice. According to the study, these include waste status, poor urban planning, ineffective technologies, lack of information, lack of regulation, an inadequate legal framework, low waste disposal costs and risk aversion. The impact of these barriers can vary significantly, depending on the location.
A range of policy instruments has been introduced to overcome these barriers. However, for real change to take place, government regulations need to be accompanied by action from companies. Furthermore, certain regulations could negatively impact the circular economy.
Regulatory instruments set binding practices and targets. For example, most countries have set their own national guidelines for waste. However, national guidelines that promote the circular economy concept are not yet as widespread and have mostly been set recently.
Economic policy instruments use financial incentives or disincentives. The disincentives serve, for example, to prevent certain types of waste disposal. However, the additional costs could simply be passed on to users. Furthermore, the relatively low costs would not change patterns in the construction sector. Conversely, high costs could also lead to illegal disposal.
Technical instruments define the standards by which circularity can be achieved. These mostly relate to design, but also to construction and demolition methods.
Operational instruments are used to create a supportive infrastructure or processes. These mainly concern logistics, since large quantities of components and materials have to be transported and processed.
Communicative instruments are less restrictive and focus on education and knowledge dissemination. These include guidelines for most phases of the circular economy in construction. The promotion of building certifications can also encourage circular economy practices and motivate changes throughout the entire life cycle of buildings.
The study found that, on average, the most common types of instruments applied are communicative and general regulatory instruments. Furthermore, many of the same types are used in the majority of countries. This applies, for example, to waste directives and emissions targets, which are in place in all the countries studied. However, it is clear that each country places a different emphasis on the various aspects of the circular economy. General guidelines for the circular economy, as well as targets for recycling and waste utilization, are among the most frequently used regulatory instruments. Mandatory waste management on construction sites and mandatory BIM implementation, on the other hand, are much less common.
The most frequently applied economic instruments include subsidies for new green construction projects. In general, incentives and subsidies are used more frequently than taxes and levies. Economic instruments are less commonly applied for waste and remediation than for green projects. Of the technical instruments, standards for the use of recycled additives are the most common. Operational instruments are used the least. No government in the countries studied provides infrastructure for reverse logistics. Governments tend to rely far more on the organic development of a market for material reuse, rather than incentivizing it.
The results indicate that the overall index of circular economy policy implementation correlates most strongly with waste recovery through the circular economy. Therefore, a mix of policy approaches is recommended, including economic, technical, operational and circular economy-specific regulatory instruments.
The specific provisions of the Water Framework Directive (WFD) have proved to be the instruments most strongly correlated with waste recovery under the WFD. The development of more specific circular economy guidelines could be a solution to promote better practices in countries where the implementation of instruments is still in its infancy.
Operational instruments are the least commonly used, but show a strong correlation with higher levels of waste recycling under the WFD. They are also more common in high-income countries, as solutions such as reverse logistics infrastructure can be costly. More cost-effective operational solutions should therefore be prioritised by most countries seeking to implement operational guidelines.
None of the countries surveyed have a reverse logistics infrastructure to facilitate the storage and resale of used EAGs. Governments are relying on the organic development of a market for the reuse of materials. However, this strategy may prove insufficient if storage and transport costs for the recycling and reuse of CRD materials are high.
The analysis revealed differences in the implementation and effectiveness of the directives between high- and middle-income countries. In high-income countries, the provisions of the WFD are strongly associated with higher recycling rates for WFD wastes. There is also a significant correlation between waste recovery and the use of technical and economic instruments in these countries. This fact suggests that high-income countries have an opportunity to do more, particularly in terms of operational instruments, which are currently less common.
The popularity of green building certifications in all countries and the lack of circular building guidelines and certifications clearly point to the need for an international certification or labelling system for building materials.
