BPIE’s Climate Conversations series aims to shine light on a diverse range of perspectives on buildings and climate policies, engaging stakeholders from various backgrounds. We seek to identify solutions and blind spots to key challenges related to reducing the climate impact of buildings and to a just transition to a climate-neutral society.

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For our first ever Climate Conversation, BPIE’s Executive Director Oliver Rapf sat down with Domenico Campogrand Director General of FIEC, the European Construction Industry Federation, to discuss one of our main preoccupations: the role of the construction industry and customers alike to address whole-life carbon emissions of buildings. In this exchange, FIEC explains what keeps the construction industry up at night, and what other ‘hidden emissions’ in the construction can be reduced simply better collaboration and planning.      

Oliver:  A few months ago, the world met in Glasgow for another climate change conference, and the outcome is quite a mixed bag, according to many observers. But one thing struck me: there is a clear mandate to all governments to increase their efforts to reduce greenhouse gas emissions. In Europe, we have a strong political commitment to climate-neutrality by 2050, which means that all of our economic sectors have really a clear goal ahead. I think the construction industry has two parallel challenges: on the one hand, it needs to ensure that the climate impact of construction materials is significantly lowered, and on the other hand, it needs to make sure that buildings will reduce their CO₂ emissions caused by heating and cooling. Is this something which keeps the leaders in your industry awake at night?

Domenico: I don’t know if this is something that keeps them awake at night, but it is certainly something that is at the top of their priorities. Carbon neutrality by 2050 is not an alternative. Companies’ future competitiveness will depend also on their environmental and climate performance. Some clients and investors are already pushing in this direction and such pressure will continue to increase. One could see this awareness in many different roadmaps at company or federation level.

But as you have just highlighted, we face a particular challenge in our sector. Achieving higher energy efficiency in new buildings requires the use of more materials. We therefore have to take into consideration the share of emissions due to the production of such materials in addition to those coming from the usage of the buildings itself.

This raises another important issue, namely the higher costs related to such low-carbon construction. Achieving a high level of energy efficiency in buildings is already costly. In some countries NZEB levels are far from being cost effective [1]. On top there is the need to use low-carbon materials and eventually decarbonise the construction process too. It is a spread concern – within the construction community that upfront costs are a considerable barrier and this is what worries our companies that wonder who will pay the price for low-carbon construction.

Oliver: Clearly, construction costs are a concern, in particular when real estate markets show significant price increases due to a shortage of housing which makes home ownership not affordable any more for many. I think it is important to take not only upfront costs into consideration, but the total cost of ownership during the coming decades. Investing in efficiency upgrades is simply an insurance against future energy price spikes. And people are also increasingly concerned about the full climate impact of buildings. A growing number of reports suggest that as much as half of whole life carbon emissions in buildings comes from embodied carbon, emitted during manufacturing of materials and the construction process[2]. How are FIEC and its members addressing this issue?

Domenico: Needless to stress that, both for FIEC and our members, embodied carbon has to be addressed. Over recent years, it has been a recurrent issue on our agenda and discussions became more and more intense. With national governments running at different speed on the development of this sector policies, some members are more advanced in their progress compared to others. Nevertheless, there is an overall willingness to move forward on this topic.

The key questions are as follows: What can construction companies really do to reduce whole life carbon?  In this context it is essential to have an understanding of the construction value chain and the different tasks required in a construction project.

In principle, and depending on the company model, construction companies have the biggest impact and control on what is happening on the construction site, i.e. water management, waste management, health and safety and the construction process. Significant progress has been made in the last years, for example, when it comes to waste management. Also, the decarbonisation of the construction process itself is becoming more and more central when companies start to assess and improve the energy efficiency of their vehicle and machinery fleet. However, this represents only around 20% of the overall emissions. The other 80% are generated by the production of materials and machineries and the usage of the building. Reducing whole-life carbon therefore requires joint efforts throughout the entire value chain, from designers to product manufacturers. This cannot be done by construction companies alone.

Reducing whole-life carbon… requires joint efforts throughout the entire value chain, from designers to product manufacturers. This cannot be done by construction companies alone.

In addition, we should manage CO₂ emission reduction so that we don’t jeopardize different life cycle quality aspects as long term durability, safety, healthy and long term value of assets having a really long service life.

Oliver: In your opinion, what is the best way to encourage the industry to address whole life carbon emissions in a strategic way? Do we need revised standards, do we need more innovation, investment in the industry, or anything else? What are the challenges and opportunities you see for the sector?

Domenico: Firstly, let us not forget that, to a very large extent already, embodied carbon has been addressed through a bottom-up approach for many years. The most important construction materials are covered through the Emission Trading Scheme (ETS) and manufacturers achieve significant emission reductions in the past years. Transportation is also regulated through emission thresholds for cars, commercial vehicles and trucks. We are not starting from scratch.

In general, what is needed is to make reduction of whole-life carbon emissions a business case. And this transition starts with the client. Construction is a market-driven industry. Companies aim at increasing their profit margins on the one hand, but low-carbon construction is costly on the other. If clients are not willing to pay for such additional costs, there is no incentive for construction companies to offer low-carbon solutions. Profit margins in construction are already low compared to other sectors and the level of competition extremely high. These economic aspects should also be taken into account in the overall debate.

In the transition period, awareness should be raised among clients and they have to be enabled to afford low-carbon construction. We consider the EU’s sustainable finance agenda as essential in this regard. Financial flows towards low-carbon solutions will drive the change. We could also consider setting CO₂ thresholds per project on voluntary basis. This would need to be done in a staged process and should be based on solid data to bring real added value. In the short term, life cycle assessments can serve as a specific project tool that help compare different options at the design stage resulting in informed decisions.

Oliver: You mention the influence the client can have on the construction offer. Do you also see an opportunity to bring down costs and control the carbon content of construction materials by changing production processes in the construction industry? Do you think that a move to more prefabrication both for new buildings and renovation projects could reduce costs and the carbon footprint at the same time? And what would it take to trigger this change in your industry?

Domenico: It’s not easy to give a straightforward answer to this question. As mentioned previously, the construction process itself only represents a small share of the overall carbon footprint of a building. This means that if the role of the contractor is limited to execution of the plans, the impact on the costs and on the carbon footprint will be very limited. On the other hand, in contracts such as DBO (Design Build Operate) for example, where the contractor has an overall control from the design phase, including the choice of products and materials, until the production process and the operation of the building, then of course the overall impact can increase. Therefore, independently of the level of prefabrication, it is probably the level of communication between the different actors of the construction process that will determine the size of reduction of the costs and of the carbon footprint. A collaborative approach will ensure proper planning and reduce overordering of materials, a kind of hidden embodied carbon.

Independently of the level of prefabriation, it is probably the level of communication between the different actors of the construction process that will determine the size of reduction of the costs and of the carbon footprint. A collaborative approach will ensure proper planning and reduce overordering of materials, a kind of hidden embodied carbon.

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[1] BPIE (Buildings Performance Institute Europe) (2021). Ready for carbon neutral by 2050? Assessing ambition levels in new building standards across the EU. https://www.bpie.eu/publication/ready-for-carbon-neutral-by-2050-assessing-ambition-levels-in-new-building-standards-across-the-eu/

[2] BPIE (Buildings Performance Institute Europe) (2022). Roadmap to climate-proof buildings and construction – How to embed whole-life carbon in the EPBD. https://www.bpie.eu/publication/roadmap-to-climate-proof-buildings-andconstruction-how-to-embed-whole-life-carbon-in-the-epbd/

BPIE (Buildings Performance Institute Europe) (2021). Whole-life carbon: challenges and solutions for highly efficient and climate-neutral buildings. https://www.bpie.eu/ publication/whole-life-carbon-challenges-and-solutions-for-highly-efficient-and-climate-neutralbuildings/

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