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  • Marie Mullen

Deploying Digitalisation Towards Shaping a Circular Construction Sector

Negative environmental impacts of the construction sector

The construction sector is one of the largest negatively impacting sectors, contributing to 23% of air pollution, 40% of drinking water pollution, and 50% of landfill waste globally. It is very energy intensive, being responsible for 39% of energy and process-related carbon dioxide emissions which in turn warms the atmosphere. Not only is the construction sector highly polluting, it consumes a lot of materials as well. Per year, the industry consumes 40% of the world’s usage of raw stones, gravel, and sand as well as 25% of virgin wood. At this rate, current construction practices are unsustainable. 

What needs to be done 

The negative impacts of the sector need to change. This can be done by implementing circular economy principles. The transition to a circular economy focuses on three strategies: (1) creating circular resource flows through reuse and recycling, (2) extending the use and recycling phase of materials through repair, renovation, and remanufacturing approaches, and (3) reducing the use of natural resources and maximizing the efficiency of production processes.

In construction, these strategies can be applied to reduce emissions and pollution as well as natural resource requirements. For example, electrical wires require natural resources like aluminium or copper. Reusing wiring where possible can reduce the need for natural resource extraction. Aluminium and copper are also highly recyclable, meaning that collected old wires can be made into new wires to reduce waste and lower the overall negative environmental impact of construction. 

The industry is already making strides in helping the environment. In the last ten years, there has been an increase in governmental support and funding for green building. Also, companies are choosing to invest in implementing sustainable technologies and reducing their carbon footprint. Despite these initiatives, there are still environmental problems associated with the sector. 

Technology can be a tool for implementing circular economy principles in the construction sector, but it will only succeed if barriers can be broken. A major barrier to the transition is people’s perception of making sustainable choices. The impact of sustainable building choices is intangible. It can be more costly during the design stages of a construction project, meaning that most actors opt for the most cost-effective option. This perception of green construction does not always reflect the truth. Green buildings are only about 2% more expensive to construct. This cost is compensated for in the long run because operation costs are lower, averaging 14% to 19% in savings. Technology can increase transparency and help eliminate false perceptions especially associated with the cost of sustainable choices.  

Deploying technology to transition to circular construction

Technology is a rapidly advancing tool that can help push the transition to a circular economy in the construction industry. Today, technology is used to reduce raw material usage through 3D printers or biodegradable textiles, but it is not utilized enough, as construction is one of the least digitized industries. Becoming more digitized is a way for the construction sector to become more circular.


A strategy to accomplish digitalization is using blockchain. Blockchain technology is a digital network that allows for decentralized and highly secure recording of transactions and tracking assets across the network. This can be applied throughout the construction sector. For example, it can improve contractual aspects and the operation of buildings, support sharing risk/reward among project parties in integrated project delivery, automate construction payments and improve the traceability of prefabricated components across the supply chain. The increased transparency and traceability throughout the supply chain provided by this technology can support the transition to a circular economy. For example, a blockchain-based solution has been developed to enable tracking of building components to be used in proactive planning. 

An example strategy that can be used within the digital network of blockchain is material passports. The passports are an identifier for the materials used in the building. Records of building materials are important knowledge for the transition to the circular economy. They provide information on all components of the structure, allowing for easier recovery of materials with value as well as recyclable materials preventing material waste, prolonging the lifespan of the material, and reducing the negative environmental impacts of the construction sector.

An example of material passports in use today is Madaster, an online registry for materials and products. This registry contains data recorded on all materials and products used in a real estate or infrastructure project, like buildings and bridges. Despite providing helpful information, one issue with material passports is universality. For example, Madaster currently operates in 7 countries in Europe. If a project imports materials from a country not in Madaster’s registry, there may be a lack of data available on that material resulting in a linear material lifecycle. For this technology to help with the transition to a circular construction sector, universal systems need to be implemented. 

The use of this technology is extremely new, so there are gaps in knowledge and applications. Currently, the technology lacks integrated solutions that cover all aspects of a circular supply chain including network structure and business processes. A study by Elghaish et. al (2023) proposes a solution for the gap. By bringing together three concepts of blockchain, smart contracts, and building information modelling, an integrated workflow can be created to facilitate the transition to a circular economy. What this means is that blockchain or material passports alone cannot be the singular technology that transforms the construction industry, but there needs to be many strategies working together. 

The future of the construction sector

Technology is a tool that can play a large role in the transition to circularity in the construction sector. However, this transition is only possible if people are willing to use and implement relevant and required tools. Education for employees of the construction sector as well as information for consumers about the importance of circularity within construction and the tools available to achieve it can improve the environmental impact of the sector. Education can make the changes more universal, and therefore more impactful. Furthermore, appropriate policies and regulations must be elaborated and enforced to ensure that sustainable practices are effectively implemented on the ground.


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