Green Alliance report – Circular economy focus is essential for UK construction sector to reach net-zero

The independent think tank and charity Green Alliance has released a new report that argues for the adoption of a circular economy in the UK construction industry. 

The report claims that the majority of raw materials used in construction have high embodied carbon, which means that the industry will not be able to meet the Government’s legally binding 2050 net-zero target unless it becomes more circular. 

According to the report, construction, demolition and excavation activities generate almost two-thirds (62%) of the country’s waste and consume the most non-renewable materials. It is estimated that around 50,000 buildings are demolished every year in the UK. 

As global material use is expected to more than double by 2060, circular solutions are essential to reduce emissions and ecological impact. 

A circular economy approach aims to keep materials, products and services in use for as long as possible. A circular economy can stimulate local green economies and bring financial value for clients through material efficiencies in construction, delivering future-ready buildings and infrastructure with lower risk of stranded assets. 

While the Government has been developing and refining policies on the operational emissions of buildings, less policy progress has been made in tackling embodied carbon. 

The latest Green Alliance report, ‘Circular construction: building for a greener UK economy’, captures the views of industry experts who say that the sector already has the technology and techniques it needs, but it requires support to implement them. 

Key points from the report

Green Alliance is calling on the UK government to lead by example and set a target to reduce raw material use in private and public construction by at least one-third by 2035.  


If implemented in full, the recommendations in this report would lead to a reduction in material use by 37%, waste generation by 33% and carbon emissions by 39% by 2035.  


This calculation covers both emissions generated within the UK and overseas in material supply chains. 

The report prioritises these three areas for urgent action

Financial incentives and support  

  • The government should address the imbalance between new build, which is currently zero-rated for VAT, and retrofitting, which is charged VAT at 20 percent. 
  • The VAT holiday for energy saving products, such as insulation and heat pumps should be made permanent and extended to other retrofitting activities that preserve or improve the environmental performance of a building. 
  • A funding package for small innovative companies should be provided to bring new solutions to the market that improve the reuse of construction materials and build secondary supply chains. 

More circular design and retrofitting  

  • The central government should follow London’s example and require all developments over a certain size to submit a circularity statement. 
  • Pre-demolition assessments should be carried out before planning consent is given to replace existing buildings, to make a clear case for demolition in relation to carbon emissions and material use. 

Better data  

  • Progress will be limited until there are agreed and commonly used metrics for circularity. The government should support and co-ordinate efforts by the UK Green Building Council, the Institute for Structural Engineers and others to identify the right metrics and then mandate their use. 
  • The government should also support and co-ordinate efforts to develop ‘material passports’ for buildings to track crucial information about the materials, components and products used in them. 

Industry reaction

UKGBC’s senior sustainability advisor Kai Liebentanz said: “Achieving a circular economy requires a fundamental systems-level change in our economy. Government action is critical for achieving this change and creating the right enabling conditions. This report highlights the power of a circular economy to drastically reduce carbon emissions and resource use, as well as how both industry and government can step up to the challenge and deliver.” 

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