Decarbonizing the construction industry

Growing expectations for the sector  
 

• The construction industry must take into account the rising expectations in terms of energy consumption standards for buildings and the environmental impact, including carbon footprint, of construction materials and entire development projects.

• The elements of the European Green Deal include the Renovation Wave, which should help improve energy efficiency and reduce building emissions, and the revised Energy Performance of Buildings Directive (EPBD), requiring calculation of the carbon footprint of buildings across their life cycle. The market will also be affected by the plans for the EU ETS 2 system covering for example residential buildings, which will stimulate study of the emissions of fuels used for heating and impact the operating costs of building and individual units.

• These solutions will join a number of strategies and regulations that have already been adopted or implemented, such as the amended Construction Products Regulation requiring declaration of environmental impact factors for construction products, national renovation strategies, and the EU Taxonomy, which should redirect financial flows towards sustainable projects. In this context we should also mention the EU Level(s) scheme for assessing the sustainability of buildings, taking into account issues such as greenhouse gas emissions, life cycle, and efficient use of materials and water resources.

Cash flows and new financial solutions
  

• Market research finds a growing share of usable area of buildings covered by voluntary environmental certification, such as BREEAM, LEED or WELL. This is driven by the desire by businesses and residents to use spaces built in line with sustainability principles. Similar interest is also seen in the creation and use of financial solutions (e.g. green bonds), as well as local policies in areas such as revitalization, new housing starts, and advanced strategic planning (e.g. the Warsaw Green Building Standard and circular economy strategies for Kraków, Gdańsk and Lublin).

• These trends are often accompanied by changes in financial flows stimulating practical implementation (e.g. the EU’s multiannual financial framework, and green public procurement).

Growing awareness of environmental impact
  

• Growing awareness of the environmental impact of the construction sector is already visible in the heightened expectations for buildings and infrastructure. Many years of debate on air quality in Poland has raised expectations for energy efficiency and heat sources. Projects are increasingly carried out using local raw materials with a smaller environmental footprint. Global market leaders are implementing innovations to reduce the emissions tied to cement and steel, for example. In urban areas, solutions involving green and blue infrastructure are being followed, along with mixed-use development in the spirit of the 15-minute city.

• With the next stages of the green transition, the expectations of customers, investors and regulators will increase. More and more attention is paid to the environmental footprint of a product or project throughout its life cycle. In addition to energy efficiency, the efficient use of raw materials will also play an increasing role. According to estimates published by Statista, the global green building materials market was worth USD 280.5 billion in 2021, and by 2027 is expected to reach USD 523.7 billion.