Interview: practitioners on construction circularity (angle 8)

The construction industry in emerging markets generates approximately 2.2 billion tonnes of construction and demolition waste annually—roughly 40% of the global total—yet circular economy adoption rates in these regions hover below 15%, according to the United Nations Environment Programme's 2024 Global Status Report. This staggering disconnect between waste generation and recovery presents both an urgent challenge and a transformative opportunity. We spoke with practitioners across Africa, Southeast Asia, and Latin America who are pioneering circular construction models, scaling from bootstrapped startups to enterprise-grade operations, to understand what's genuinely working, what continues to fail, and how the path from innovation to scale actually unfolds in resource-constrained contexts.

Why It Matters

Construction circularity in emerging markets sits at the intersection of three critical global imperatives: climate mitigation, resource security, and urban development. The built environment accounts for 37% of global energy-related carbon emissions and 39% of process-related CO2 emissions, with emerging markets projected to add 2.5 trillion square feet of new building stock by 2060—equivalent to adding an entire New York City every month for the next 35 years.

The 2024-2025 period has witnessed accelerated policy momentum. India's Construction and Demolition Waste Management Rules now mandate 20% recycled aggregate content in new government projects. Brazil's National Solid Waste Policy requires construction waste generators to develop management plans, with enforcement penalties increasing by 300% in 2024. Vietnam's Green Building Law, effective January 2025, introduces material passport requirements for buildings exceeding 5,000 square meters.

"The regulatory environment has shifted fundamentally in the past eighteen months," explains Dr. Adaora Nwankwo, a circular economy researcher at the African Development Bank. "What was voluntary guidance is becoming mandatory compliance. Developers who treated circularity as a marketing exercise are now facing real financial consequences for non-compliance."

The economic case has strengthened considerably. McKinsey's 2024 analysis of circular construction economics found that material reuse and recycling can reduce project costs by 15-25% in emerging markets where virgin material supply chains are volatile. The World Economic Forum's 2025 Circular Construction Report identified $320 billion in annual value creation potential across emerging economies by 2030, primarily through reduced material costs, extended asset lifecycles, and new secondary material markets.

Key Concepts

Extended Producer Responsibility (EPR): A policy framework requiring manufacturers and importers of construction materials to take financial or physical responsibility for end-of-life management. In emerging markets, EPR schemes for construction materials remain nascent, with only Indonesia, South Africa, and Chile implementing partial frameworks as of 2025. Effective EPR requires robust collection infrastructure, recycling capacity, and enforcement mechanisms—all areas where emerging markets face implementation gaps.

Scope 3 Emissions: Indirect greenhouse gas emissions occurring throughout the value chain, including upstream emissions from material extraction, processing, and transportation, and downstream emissions from building use and demolition. For construction companies, Scope 3 typically represents 80-95% of total emissions. "Most developers in our region still don't measure Scope 3," notes Carlos Mendez, sustainability director at a major Mexican construction firm. "Without measurement, you can't manage the circular transition effectively."

Additionality: The principle that circular interventions must deliver environmental benefits beyond what would have occurred under business-as-usual scenarios. In carbon markets and green finance, demonstrating additionality is essential for claiming credits or accessing preferential financing. Critics argue that many circular construction projects in emerging markets struggle to prove additionality because baseline data on conventional practices remains scarce.

Digital Product Passport (DPP): A digital record containing information about a product's materials, components, and recyclability, enabling traceability throughout the product lifecycle. The European Union's DPP requirements taking effect in 2027 are driving adoption among emerging market exporters. However, practitioners report significant implementation challenges around data standardization, digital infrastructure, and supply chain transparency.

Carbon Intensity: A measure of greenhouse gas emissions per unit of output, typically expressed as kgCO2e per square meter of built area or per tonne of material. Reducing carbon intensity is a primary objective of circular construction strategies. The Global Alliance for Buildings and Construction's 2024 baseline study found carbon intensity in emerging market construction averaging 450-600 kgCO2e/m², compared to 250-350 kgCO2e/m² in mature markets with established circular practices.

What's Working and What Isn't

What's Working

Informal Sector Integration: Perhaps counterintuitively, the most successful circular construction models in emerging markets build upon rather than replace existing informal recycling ecosystems. In India, partnerships between formal construction companies and the estimated 1.5 million informal waste pickers have achieved material recovery rates exceeding 70% on pilot projects. "The informal sector has decades of expertise in material identification, sorting, and local market dynamics," explains Priya Sharma, founder of Mumbai-based circular construction startup BuildLoop. "Our role is to formalize these relationships, ensure fair compensation, and create quality assurance systems that enable recovered materials to meet construction specifications."

Modular and Prefabricated Construction: The shift toward off-site construction has demonstrated clear circular economy benefits in emerging markets. A 2024 study by the International Finance Corporation found that modular construction in Southeast Asia reduced construction waste by 52-67% compared to conventional methods while cutting project timelines by 30-40%. Vietnamese manufacturer Hoa Phat Group reports that prefabricated components from their facilities achieve 85% recyclability at end-of-life, compared to approximately 40% for conventional reinforced concrete structures.

Material Banks and Exchange Platforms: Digital platforms connecting demolition projects with new construction sites have gained traction across Latin America and Africa. Chilean platform Reusa Construction facilitated the exchange of over 180,000 tonnes of reclaimed materials in 2024, diverting waste from landfill while providing cost savings averaging 35% compared to virgin materials. "The key innovation wasn't the technology—it was the quality certification system," notes founder Maria Elena Gonzalez. "Contractors will only use reclaimed materials if they can verify structural integrity and regulatory compliance."

Concrete Recycling at Scale: Technological advances in concrete crushing and aggregate recovery have made recycled concrete aggregates (RCA) economically competitive in multiple emerging markets. Egyptian company Titan Cement's Alexandria facility processes 500,000 tonnes of demolition concrete annually, producing certified RCA that meets national building standards. Their 2024 lifecycle assessment demonstrated 45% lower embodied carbon compared to virgin aggregates.

What Isn't Working

Voluntary Certification Systems: Green building certifications—while valuable for market signaling—have failed to drive widespread circular adoption. Only 2.3% of new construction in emerging markets pursued any form of green certification in 2024, according to the World Green Building Council. "Certifications are expensive, time-consuming, and don't translate to price premiums in most emerging markets," observes Dr. Kwame Asante, an urban development specialist at the African Union. "Developers see them as luxury add-ons rather than business imperatives."

Top-Down Policy Without Implementation Support: Multiple practitioners highlighted the gap between regulatory ambition and execution capacity. Nigeria's 2023 circular construction guidelines, widely praised at announcement, have seen minimal implementation due to inadequate enforcement personnel, unclear compliance pathways, and limited access to approved recycling facilities. "You cannot mandate outcomes without enabling infrastructure," states Chidi Okonkwo, a Lagos-based construction consultant. "Policies written in capital cities often ignore the practical realities at construction sites."

Technology Transfer Without Localization: Imported circular construction technologies frequently underperform in emerging market contexts. European-designed concrete recycling equipment sized for industrial-scale operations proves economically unviable for the smaller, dispersed demolition projects typical of many emerging cities. Software platforms developed for formal construction supply chains struggle to accommodate the cash-based transactions and informal relationships that characterize emerging market value chains. Successful practitioners emphasize the need for ground-up innovation rather than wholesale technology adoption.

Carbon Credit Monetization: Despite theoretical potential, construction circularity projects have struggled to access carbon markets effectively. The transaction costs of developing methodologies, conducting baseline studies, and obtaining third-party verification often exceed the value of credits generated. "We spent $85,000 proving additionality for a project that generated $12,000 in carbon credits," recounts a frustrated project developer in Indonesia. "The economics simply don't work for most construction interventions."

Key Players

Established Leaders

LafargeHolcim (Holcim Group): The global cement giant has invested $2.3 billion in circular construction initiatives across emerging markets, including concrete recycling facilities in Nigeria, Vietnam, and Colombia. Their ECOPact low-carbon concrete now represents 18% of sales in emerging market operations.

Saint-Gobain: Operating in 72 countries, Saint-Gobain has established material take-back programs for gypsum products across Latin America and Southeast Asia, recovering over 400,000 tonnes of post-consumer gypsum in 2024.

Vedanta Limited: India's largest diversified natural resources company has pioneered industrial symbiosis in construction, utilizing mining byproducts and industrial waste as construction aggregates across 14 states.

Cemex: The Mexican multinational operates the largest construction waste recycling network in Latin America, with 23 processing facilities across Mexico, Colombia, and Peru recovering 2.1 million tonnes of materials annually.

Daiwa House Industry: The Japanese prefabrication leader has established joint ventures in Vietnam, Indonesia, and the Philippines, transferring modular construction expertise that reduces waste generation by 60% compared to conventional methods.

Emerging Startups

BuildLoop (India): This Mumbai-based startup has created a materials marketplace connecting 340 demolition contractors with 1,200 construction projects, facilitating recovery of 45,000 tonnes of materials in their first two years of operation.

Reusa Construction (Chile): Operating across five South American countries, Reusa's digital platform has become the region's leading exchange for reclaimed construction materials, with transaction volumes growing 280% year-over-year.

CircularBuild Africa (Kenya): This Nairobi-based company manufactures building components from recycled plastics and agricultural waste, supplying affordable housing projects across East Africa.

EcoMaterials Vietnam: Specializing in recycled aggregate production, EcoMaterials operates three processing facilities supplying certified recycled materials to major infrastructure projects in Ho Chi Minh City and Hanoi.

Bamboo Logic (Colombia): Pioneering engineered bamboo as a circular alternative to structural steel and concrete, Bamboo Logic has supplied materials for over 200 construction projects across Colombia and Ecuador.

Key Investors & Funders

International Finance Corporation (IFC): The World Bank Group's private sector arm has committed $1.8 billion to circular construction investments in emerging markets through 2027, with active portfolios in 23 countries.

Circulate Capital: This Singapore-based investment firm focuses on circular economy infrastructure in South and Southeast Asia, with $150 million deployed across construction waste recovery and recycled materials manufacturing.

African Development Bank (AfDB): Through the Africa Circular Economy Facility, the AfDB has provided $420 million in concessional financing for circular construction projects across 15 African nations.

Green Climate Fund (GCF): The GCF has approved $890 million for circular construction initiatives in developing countries, with particular focus on low-carbon materials and building energy efficiency.

Emerging Markets Private Equity Association (EMPEA) members: Collective investments from EMPEA members in circular construction ventures exceeded $340 million in 2024, representing the fastest-growing sustainable infrastructure category.

Examples

1. São Paulo Material Recovery Network (Brazil): Launched in 2023 as a pilot with three construction companies, the network has scaled to encompass 47 contractors representing 60% of the metropolitan area's construction activity. By implementing standardized material classification, centralized sorting facilities, and a digital tracking system, the network achieved 72% material recovery rates in 2024—up from an estimated 35% baseline. Cost savings averaged R$180 per cubic meter of waste diverted, generating total participant savings of $34 million in the first full year. The model is now being replicated in Rio de Janeiro and Belo Horizonte with support from the Inter-American Development Bank.

2. Lagos Urban Renewal Circular Program (Nigeria): This government-private partnership transformed demolition waste from informal settlement upgrades into materials for replacement housing. Over 18 months, the program processed 89,000 tonnes of demolition debris, recovering 68,000 tonnes of reusable materials that supplied 40% of aggregate needs for 2,400 new housing units. Beyond material recovery, the program created 1,200 jobs in waste processing and provided skills training to 450 former informal waste workers. Independent assessment found 38% reduction in project carbon footprint compared to conventional approaches using virgin materials.

3. Ho Chi Minh City Circular Construction Zone (Vietnam): Designated in 2024 as a special economic zone for circular construction activities, this 85-hectare industrial area concentrates recycling facilities, reclaimed material storage, and circular manufacturing operations. Tenant companies benefit from streamlined permitting, infrastructure subsidies, and guaranteed offtake agreements with government construction projects. In its first year, the zone processed 420,000 tonnes of construction waste and supplied certified recycled materials to 23 major infrastructure projects. Zone operators report that co-location has reduced material transport costs by 45% and improved quality control through shared testing facilities.

Action Checklist

• Conduct baseline assessment of current material flows, waste generation, and recovery rates across your construction portfolio to establish quantified improvement targets
• Map existing informal recycling ecosystem actors in your operating markets and evaluate partnership models that formalize relationships while preserving livelihoods
• Evaluate digital product passport implementation requirements for materials destined for export markets, particularly those with EU supply chain relationships
• Develop Scope 3 emissions measurement protocols for construction operations, prioritizing material categories with highest embodied carbon contributions
• Identify and engage with material exchange platforms operating in your markets, or assess feasibility of developing proprietary systems for high-volume material categories
• Review procurement specifications to incorporate recycled content requirements where certified recycled materials are available at competitive quality and cost
• Assess modular and prefabricated construction opportunities for upcoming projects, evaluating both waste reduction benefits and end-of-life recyclability
• Engage with industry associations and policy working groups to shape emerging EPR frameworks and circular construction standards
• Develop internal training programs to build circular economy competencies across project management, procurement, and site operations teams
• Establish monitoring and reporting systems aligned with emerging disclosure frameworks including CSRD, ISSB, and regional equivalents

FAQ

Q: How do circular construction economics compare between emerging and developed markets? A: Circular construction often delivers stronger economic returns in emerging markets due to several factors. Virgin material costs are frequently higher relative to wages, making labor-intensive recovery activities more viable. Material supply chains tend to be more volatile, increasing the value of local secondary material sources. However, emerging markets face higher transaction costs for quality certification, regulatory compliance, and technology adoption. Net economics are highly context-dependent, with studies showing cost advantages of 15-30% for circular approaches in markets with supportive policy frameworks and existing recycling infrastructure.

Q: What are the primary barriers for startups scaling circular construction solutions in emerging markets? A: Practitioners consistently identify three scaling barriers. First, access to growth capital remains constrained, as many investors struggle to evaluate business models that depend on informal supply chains, evolving regulations, and nascent markets. Second, talent acquisition is challenging—circular construction requires hybrid expertise spanning waste management, construction engineering, digital systems, and sustainability science. Third, regulatory fragmentation across jurisdictions complicates expansion, as compliance requirements, material standards, and permitting processes vary significantly even within single countries.

Q: How should organizations prioritize between different circular strategies—material recovery, modular construction, low-carbon materials, or design for disassembly? A: Prioritization should reflect both organizational capabilities and market context. Material recovery typically offers the quickest implementation pathway and clearest economics but depends on local recycling infrastructure. Modular construction delivers significant waste reduction but requires substantial upfront investment and supply chain transformation. Low-carbon materials may face availability constraints and certification challenges in many emerging markets. Design for disassembly generates benefits only at end-of-life, creating timing mismatches with investment horizons. Most successful practitioners pursue portfolio approaches, starting with lower-complexity interventions to build capabilities before tackling more transformative strategies.

Q: What role should carbon credits play in financing circular construction initiatives? A: Current carbon credit mechanisms have limited applicability for most circular construction projects due to methodology gaps, high verification costs, and relatively modest carbon impacts per project. However, this is evolving. New methodologies under development by Verra and Gold Standard specifically address construction sector interventions. Aggregation approaches—pooling multiple smaller projects—may reduce per-project transaction costs. The most promising near-term opportunity involves carbon credit mechanisms as supplementary rather than primary financing, with credits providing 10-20% of project returns while core economics remain driven by material cost savings and regulatory compliance value.

Q: How are digital technologies transforming circular construction in emerging markets? A: Digital adoption in emerging market circular construction focuses on three areas. Material tracking systems using QR codes, RFID, and increasingly blockchain provide the transparency needed for quality assurance and regulatory compliance. Platform-based marketplaces reduce transaction costs for material exchange and improve matching between supply and demand. Building information modeling (BIM) enables material quantity optimization and design for disassembly. However, digital solutions must accommodate infrastructure limitations including inconsistent connectivity, limited smartphone penetration among site workers, and the prevalence of cash-based informal transactions. Successful implementations typically employ hybrid digital-physical systems with offline functionality and human interface options.

Sources

• United Nations Environment Programme. (2024). Global Status Report for Buildings and Construction 2024. UNEP Global Alliance for Buildings and Construction.

• International Finance Corporation. (2024). Circular Construction in Emerging Markets: Investment Opportunities and Implementation Pathways. World Bank Group.

• World Economic Forum. (2025). The Circular Construction Economy: A $320 Billion Opportunity in Emerging Markets. WEF Infrastructure Initiative.

• McKinsey & Company. (2024). Building the Circular Economy: Lessons from Emerging Market Pioneers. McKinsey Sustainability Practice.

• Global Alliance for Buildings and Construction. (2024). Decarbonizing Construction: Regional Baseline Study for Emerging Economies. GlobalABC/IEA.

• African Development Bank. (2024). Africa Circular Economy Facility: Annual Progress Report 2024. AfDB Sustainable Development Department.

• Inter-American Development Bank. (2025). Circular Construction in Latin America: Policy Frameworks and Implementation Experience. IDB Infrastructure Division.