The Circular Economy: What It Is and How It Applies to the Construction Industry

Repair, reuse, recycle… That is the concept behind the circular economy, an economic model that is expected to become increasingly important in years to come. In March 2020, the European Commission presented an action plan for a new circular economy conceived to tackle a number of issues. The document covers waste reduction, designing more sustainable products, the right to repair, and other areas.

All industries have their place in the circular economy, but undoubtedly some warrant a closer focus than others. In particular, resource-intensive industries such as textiles, manufacturing and construction. In the building industry, the circular economy applied to the construction industry is often referred to as “circular construction”.

The Circular Economy: definition

What is the circular economy? As we have seen, the term indicates a specific economic system characterized by in-built eco-sustainability. A circular economic system is defined by its ability to regenerate, thanks to processes for sharing, reusing, repairing and recycling materials in order to fully leverage existing resources.

The Ellen MacArthur Foundation provided a much-cited definition of the circular economy: it is “a generic term to define an economy that is regenerative by design. In a circular economy, materials follow one of two types of flow: biological, capable of being reintegrated into the biosphere, or technical, destined to be re-used without ever entering the biosphere.”

The end-goal is to extend the product lifecycle as far as possible and minimize waste production. Within such a system, when a product has completed its function or breaks down, where possible it is recycled, the materials from which it was created reintroduced back into the economic cycle to generate new value from the same resources, without consuming any new raw materials.

The Circular Economy: Benefits

As we have seen, the European Union is specifically investigating the circular economy as a model for the future, not least because the alternatives are far less palatable: globally, there is a continuous upswing in demand for raw materials, at a time when resources are becoming ever-scarcer. In a world where raw materials are indubitably finite and the human population is growing vertiginously, the circular economy is our best – perhaps only – possible solution. Adding to this now-general belief is the urgency of the environment, considering that, among other things, many extraction processes generate very grave impacts: the more circular the economy, the lower our carbon dioxide emissions and energy consumption. As well as rendering more materials available and reducing environmental impact, the benefits of the circular economy include reducing dependency on other countries for sourcing raw materials. Indeed, many EU countries depend totally or almost totally on other countries for resources that they are unable to obtain domestically. The circular economy’s potential employment benefits are also well worth considering: according to the European Union, by following this new approach, 700,000 new jobs will be created by 2030.

Circular economy infrastructure

Not surprisingly, as the principles of the circular economy have become more widely publicized, circular construction in particular has attracted greater attention. Italy’s environmental research and protection agency ISPRA has repeatedly pointed out that the construction industry generates more special waste than any other. For example, in 2017, the construction industry produced 57 million tons of waste material from construction and demolition. Given this situation, the European Union set fairly stringent targets some time ago: by 2020, all member countries should have achieved 70% recovery of demolition and construction waste, a figure that is very much higher than Italy’s current national average of between 20% and 30%. Italy needs to achieve a veritable step change by following tangible construction industry circular economy best practice. Consider, for example, what was achieved with the Circl building, the headquarters of Dutch bank ABN AMRO: not only were materials from other demolished buildings used to construct it, old garments were used too. Indeed, ABN AMRO collected old jeans from its employees, using sixteen pairs of them to make insulation layers for the building. This somewhat unconventional approach is nevertheless fully in line with Dutch government guidance, which has set a target for the entire national economy to run on recycled raw materials by 2050.


Circular economy principles in construction: The Italia 2030 Study

Among the latest and most interesting developments in circular construction is the position paper drafted under Italia 2030, a Ministry of Economic Development and LUISS Business School project to ensure Italy’s sustainable future. Italia 2030’s many working groups, including one dedicated to the construction industry, resulted in a paper entitled, “The Circular Economy: An Opportunity to Rethink Construction”, in which, among other things, three priority areas of intervention were identified to rejig the construction industry. First, focusing on the issue of waste from demolition and construction, particularly the legal and technical barriers to recovering, recycling and using such materials. A second area of interest is alternative materials, specifically the need to come up with indicators of sustainability and durability for selected materials. Last but not least, it will be necessary to work on criteria regarding construction design and management, with a special focus on digitization and reducing climate vulnerability.