According to a new report, the construction sector’s carbon dioxide emissions can 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 also presents substantial economic advantages, with the potential to yield an annual net profit gain of up to $46bn by 2030 and $360bn by 2050.
30bn square meters of buildings need to be constructed over the next 40 years
The majority of this growth is anticipated in emerging markets, including Africa, the Middle East, and Asia.
Sebastian Reiter, 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 report delves into the potential for carbon dioxide abatement and net value gain across six key building materials: cement and concrete, steel, aluminium, plastics, glass, and gypsum.
Key findings from the report include:
- Circular loops have the potential to abate up to 4 gigatonnes of CO2 (Gt CO2) by 2050.
- In 2030, the recirculation of materials and minerals, as well as CCS/CCU, are expected to contribute approximately 40% each to total abatement.
- Circular practices in cement emerge as the most lucrative, with an estimated net value gain of $10bn in 2030 and a substantial $122bn in 2050.
Jukka Maksimainen, senior partner in the Helsinki office of McKinsey and co-author of the report, notes: “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.”
