Sustainable and circular construction is a transformative dual approach that integrates innovative materials and circular economy principles. By using renewable, recyclable, and locally sourced materials, it aims to reduce the environmental impact of construction significantly.

The sustainable aspect emphasizes sustainable materials that lower greenhouse gas emissions, reduce waste, and lessen reliance on scarce raw materials. Key innovations include alternatives for traditional materials like cement and wood, promoting healthier, eco-friendly construction options.

The circular aspect promotes material reuse and recycling, extends building lifecycles through renovation and repurposing, and minimizes waste. Green building designs, Environmental Product Declarations (EPDs), passports, and digital twins (BIM) are essential tools, ensuring buildings are sustainable, durable, and recyclable.

This dual focus mitigates the construction industry's environmental footprint and fosters a resilient, resource-efficient built environment, crucial for addressing climate change and resource scarcity for a greener future.

Challenges in the sector  

The European Real Estate and Construction sector faces significant challenges and substantial opportunities for early adopters of change. Key issues include material availability, stringent regulations, CO2 pricing, evolving investor expectations, and market demand, all necessitating a fundamental rethink of our built environment. 

The construction industry is responsible for 30% of global greenhouse gas emissions, with 5-15% from construction materials like cement and steel, 40-50% of raw materials extraction, and 35% of waste generation, including 15% from construction waste. 

Various EU regulations, such as the Energy Performance of Buildings Directive (EPBD), the New EU Green Public Procurement,  the EU Emissions Trading System (EU ETS), the Waste Framework Directive, among others, are set to stimulate demand for sustainable buildings. Additionally, factors such as reduced availability and heightened costs of essential resources, influenced by CO2 pricing and geopolitical factors, underscore the necessity for adopting alternative and more efficient construction methods 

Increasing market awareness and attention to building sustainability ratings pressure real estate owners and project developers to act to avoid "stranded assets."

The potential for deep tech and digital innovation is vast 

Developing and deploying alternative construction materials and methods is crucial for Europe in multiple areas. 

It is essential to reduce greenhouse gas emissions from producing construction materials, notably cement, and from the construction and demolition processes. 

This shift will also help limit dependence on scarce raw materials, such as construction sand and wood, and secure the production of building materials within Europe despite rising energy costs. 

Additionally, embracing circularity in construction—through building lifetime extension, renovation, repurposing, and material reuse—will mitigate waste and environmental impact. 

Reducing the toxicity of construction materials aligns with new building regulations, and ensuring the rapid and affordable construction of new housing and infrastructure projects is vital for meeting Europe’s future needs.

How can deep tech and digital ventures contribute?

A broad range of deep tech and digital innovations is crucial for addressing the challenges in the construction sector, including: 

• Sustainable, Renewable, Recyclable, Healthy, and Locally Sourced Construction Materials: Examples include more sustainable cement and alternatives to virgin wood, such as reused wood and bio-based materials.
• Sustainable and Healthy Insulation, Coating, Waterproofing, and Kitting Materials
• Alternative Foundation and Soil Stabilization Technologies
• Green Building Designs, Methods, and Tools: Techniques that reduce material use, waste, and construction time, such as prefab/off-site construction, robotics, and 3D printing.
• Digital and AI Tools: Solutions that enable design for circularity and sustainability, such as material databases, building and material EPDs/passports, and digital twins (BIM).

Key success factors for these innovative solutions include:

• Scalability: Ensuring the solutions can be widely adopted and implemented.
• Stakeholder Acceptance: Gaining buy-in from construction industry stakeholders, especially project developers.
• Regulatory Compliance: Ensuring suitability for current and upcoming building regulations.
• Cost-Effectiveness: Managing the "green premium" costs compared to less sustainable solutions, considering future CO2 pricing and green certification requirements.

What’s ahead of Europe’s construction industry 

The construction sector is crucial to the European economy, generating €1.7 trillion in revenue and contributing €550 billion in gross value added, which is 5.5% of the GDP.

The industry encompasses over 3 million enterprises and employs more than 13 million people directly.

In 2023, the European construction products market was valued at approximately $100 billion, with an anticipated CAGR of 2.3% until 2032.

The European Precast Concrete Market was valued at $134 billion in 2021, and the Cement market was around $30 billion in 2023, with the Green Cement segment accounting for $8 billion.

Although Europe boasts many global corporate leaders poised to drive industry transitions, the sector is highly fragmented, with 99% of companies having fewer than 250 employees.

European VC investment in sustainable construction is still in its early stages but is expected to grow to €1 billion by 2030, according to the Cleantech Group.

Do you want to be part of Europe’s construction transformation? 

D2XCEL invites deep tech and digital ventures across Europe, operating in the field of sustainable and circular construction to check the eligibility requirements and join our scaling programme! 

Apply here and join one of our live webinars for companies or network stakeholders, where you can learn more about the programme and the benefits of participating! 

This project has received funding from the European Union under grant agreement Nº101121100. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council and SMEs Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.  

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