Trend watch: construction circularity in 2026

The global circularity rate has fallen to just 6.9% in 2025—down from 9.1% in 2018—while the construction sector alone generates over 3.57 billion tonnes of waste annually and accounts for 39% of global CO₂ emissions (Circularity Gap Report 2025). This paradox—declining circularity amid unprecedented climate urgency—has made construction circularity the defining battleground for sustainable development in 2026. The circular construction materials market, valued at $90.92 billion in 2024, is projected to reach $217-267 billion by 2033-2035, growing at 10.2% CAGR (Grand View Research 2024). For engineers, developers, and policymakers in emerging markets, understanding where the value pools lie and who captures them has never been more critical.

Why It Matters

Construction consumes 32% of global natural resources and uses 40% of total energy consumed worldwide. Yet only 1% of demolition materials are currently reused, and over 35% of construction and demolition (C&D) waste ends up in landfills annually (European Environment Agency 2024). The math is stark: 75% of construction waste has residual value that goes uncaptured.

The economic opportunity is equally compelling. A McKinsey-World Economic Forum analysis from January 2025 found that circular economy practices could generate $4.5 trillion in additional economic output by 2030 and create 700,000 net jobs in the EU alone. Energy retrofits can reduce carbon emissions by 50-75% compared to new construction, and recycled materials can cut a building's carbon footprint by 20-30%.

For emerging markets, the stakes are particularly high. These regions face a dual challenge: they need to build rapidly to accommodate urbanization while avoiding the carbon-intensive development paths of the Global North. Circular construction offers a pathway to decarbonize the built environment without sacrificing development—if the enabling infrastructure, regulations, and financing mechanisms can be established.

The regulatory environment is accelerating this transition. The EU's Ecodesign for Sustainable Products Regulation (ESPR), adopted in 2024, establishes the framework for Digital Product Passports (DPPs) across nearly all products sold in Europe. The new Construction Products Regulation (EU 2024/3110), which entered force in January 2025, mandates DPPs for construction products within 18 months of system establishment—expected by 2027-2028. This regulatory wave will reshape global supply chains as manufacturers serving European markets must comply regardless of their home jurisdiction.

Key Concepts

Digital Product Passports (DPPs)

DPPs are machine-readable records containing a product's origin, material composition, environmental impact data, and end-of-life disposal instructions. For construction, DPPs will include unique identifiers, Declaration of Performance and Conformity documents, lifecycle carbon footprint data, recycled content percentages, and disassembly guidance. These passports, accessible via QR codes linked to EU public web portals, transform buildings from static assets into trackable material banks.

Material Passports and Building Information Modeling (BIM)

Material passports document every component in a building—from structural steel to finishing materials—enabling precise valuation of embedded resources at end-of-life. Platforms like Madaster integrate with BIM files to create digital libraries of building materials, functioning as land registries for construction resources. The Circularity Performance Index (CPI) derived from these passports quantifies a building's circular potential.

Extended Producer Responsibility (EPR) for Construction

EPR schemes extend manufacturers' accountability beyond the point of sale to include end-of-life management. In construction, this manifests as take-back programs for building components, mandatory recycled content requirements, and financial contributions to C&D waste processing infrastructure. India's Plastic Waste Management Rules and EU EPR frameworks are reshaping manufacturer obligations.

Urban Mining

The practice of recovering materials from existing built infrastructure treats cities as above-ground mines. With 80% of existing buildings worldwide expected to remain standing by 2050, urban mining from renovations and selective demolition represents a vast untapped resource pool—estimated to contain more copper than remaining global ore reserves in some dense urban areas.

Construction Circularity KPIs by Application

Metric	Bottom Quartile	Median	Top Quartile
C&D Waste Recycling Rate	<40%	55-65%	>80%
Material Reuse Rate (Demolition)	<5%	8-15%	>25%
Recycled Content in New Construction	<10%	15-25%	>35%
Carbon Reduction vs. Virgin Materials	<15%	20-30%	>40%
Material Passport Coverage	<20%	40-60%	>80%
DPP Compliance Readiness	<30%	50-65%	>85%
Cost Savings from Circular Procurement	<8%	12-18%	>25%

What's Working

Integrated Material Passport Systems

Amsterdam's Metropolitan Area has demonstrated that material passports can achieve economic viability at scale. The city's pilot program, using the Madaster platform, achieved 95% recycling or reuse of C&D waste, 32% reduction in construction CO₂ emissions, and 25% cuts in material expenses for participating developers. The program created over 500 local jobs in recycling and green innovation. These results stem from treating material passports not as compliance exercises but as value-creation tools—enabling developers to price salvage value into project economics from the design phase.

Selective Demolition and Design for Disassembly

The deconstruction of ABN AMRO's Circl Pavilion in Amsterdam, which began in May 2024, exemplifies best practices. Rather than conventional demolition, the 9-month selective deconstruction carefully stored all materials for documented reuse, following the building's original design-for-disassembly principles. This approach captures 10-15x more material value than conventional demolition while avoiding landfill costs.

Recycled Aggregate Integration at Scale

Holcim's ECOCycle technology platform processed 10.2 million tons of recycled C&D materials in 2024, with a target of 100 million tons annually by 2030. The company operates over 150 recycling centers globally, producing cement, concrete, and aggregates containing 10-100% recycled content. Zurich's 20-year-old mandate requiring 25% recycled concrete in public buildings proves this approach is viable at municipal scale.

Cross-Industry Material Exchanges

Industrial symbiosis platforms connecting C&D waste generators with recyclers have achieved 15-20% cost reductions for both parties. These platforms match waste streams (concrete rubble, steel scrap, timber offcuts) with processors capable of upgrading them to specification-grade materials.

What's Not Working

Low-Grade Downcycling Dominates

Despite the EU's 70% recycling target for non-hazardous C&D waste, most recovery involves low-grade applications—backfilling, road sub-bases—rather than high-quality material-to-material recycling. This downcycling captures minimal value and perpetuates demand for virgin materials.

Fragmented Supply Chains and Quality Concerns

Recycled construction materials face persistent quality perception issues. Inconsistent specifications, limited testing protocols for secondary materials, and fragmented supply chains create friction. Engineers often specify virgin materials not because recycled alternatives are inferior but because quality assurance processes for secondary materials remain underdeveloped.

Emerging Market Infrastructure Gaps

Weak enforcement, limited processing infrastructure, and inadequate financing mechanisms constrain circular construction in emerging markets. While 29% of cities with circular economy targets focus specifically on buildings and infrastructure, actual implementation lags dramatically—particularly in regions where informal waste sectors operate outside regulatory frameworks.

High Technology Adoption Costs

BIM integration, LCA software, and material passport platforms require significant upfront investment and technical expertise. Industry surveys indicate 60% of companies cite lack of internal expertise as a barrier to circularity adoption, with high technology costs cited by a similar proportion.

Key Players

Established Leaders

Holcim — Global leader with ECOCycle technology processing 10.2M tons of recycled CDM annually. Targeting CHF 800M revenue from circular construction by 2030. Strategic acquisitions in UK, Germany, Belgium, and Switzerland to scale urban mining operations.
CRH — Launched "ReConn" low-carbon recycled aggregates platform in February 2024, expanding across North American and European markets with integrated take-back logistics.
Heidelberg Materials — Acquired Calgary's largest concrete recycler in March 2025, signaling commitment to circular capacity in North American markets.
Dura Vermeer — Dutch construction company pioneering circular asphalt, prefab component tracking, and integrated material passport deployment across major developments including IJburg's Strandeiland.
Saint-Gobain — Operating NOVA innovation platform focused on sustainable building materials; active in Construction Startup Competition consortium driving circular innovation.

Emerging Startups

Madaster — Dutch platform providing digital material passports as a cloud-based library for construction materials. Raised €2.5-10.7M from investors including EASME, Horizon 2020, and Circular Valley. Integration with BIM enables lifecycle tracking and regulatory compliance.
Concular — German company providing building resource passports with focus on materials marketplace and demolition-to-reuse workflows.
Circularise — Supply chain traceability platform connecting BIM files to digital logbooks, enabling end-to-end material tracking across construction value chains.
AI-BOB — Swedish startup (€2M raised in 2024) using AI to analyze construction blueprints for regulatory compliance and circularity optimization.
Biobound — Amsterdam-based producer of bio-based concrete using elephant grass as aggregate replacement, reducing embodied carbon by 40-60%.

Key Investors and Funders

Cemex Ventures — Corporate VC focused on green construction, sustainability, and circular economy. Published Top 50 Contech Startups 2025 list; hosts annual Construction Startup Competition.
Breakthrough Energy Ventures — $3.5B+ fund backing climate solutions including circular construction materials and processes.
Pi Labs — London-based proptech VC with ~100 portfolio companies focused on sustainability and efficient buildings.
EIT InnoEnergy — European fund with 70+ deals supporting circular economy and resource optimization in construction.
EU Horizon Europe — Major grant source for circular construction R&D, funding development of DPP systems and material recovery technologies.

Examples

1. Amsterdam Metropolitan Area Material Passport Pilot

Amsterdam's comprehensive circular construction strategy, targeting 50% reduction in new raw material use by 2030 and full circularity by 2050, demonstrates municipal-scale implementation. The city allocated €14+ million for circular cooperation through 2026, with 70+ activities engaging entrepreneurs, residents, and institutions. The Buiksloterham neighborhood's DOK1620 project logged all materials in Madaster passports, using modular construction with recycled materials to create a replicable template for circular urban development. Results showed 95% waste recycling rates and 32% CO₂ reductions—proving that comprehensive material tracking combined with supportive policy can achieve outcomes far exceeding industry averages.

2. Holcim ECOCycle Urban Mining Network

Holcim's ECOCycle platform operates recycling centers in 11 countries across major metropolitan areas including London, Lyon, Melbourne, and Toronto. The company's 2024 acquisitions expanded capacity to process demolition waste into specification-grade cement, concrete, and aggregates. A Vienna study found that reusing and recycling construction minerals through such networks could reduce material imports by 32%. Holcim's partnership with Bloomberg Media launched the Circular Cities Hub and Barometer to benchmark urban circularity performance—creating transparency that drives municipal adoption.

3. Zero Waste Scotland Circular Construction Hub

Launched in June 2025, this pilot aggregates C&D waste streams across Scottish local authorities, matching demolition projects with recyclers and new construction demands. The hub integrates digital material passports with procurement systems, enabling public sector buyers to specify recycled content with verified provenance. Early results show 18% cost savings on aggregate procurement and 25% reduction in virgin material demand for participating projects. The model demonstrates how government-backed intermediaries can overcome the fragmentation that plagues circular material markets.

Action Checklist

Conduct material audit of existing building stock using BIM-integrated passport platforms to quantify circular potential
Establish DPP compliance roadmap aligned with EU Construction Products Regulation timeline (2027-2028 mandatory implementation)
Develop specification standards for recycled content that enable engineers to confidently specify secondary materials
Integrate end-of-life value calculations into project economics from design phase, pricing salvage value against demolition costs
Build relationships with certified recyclers and material exchanges before project demolition phases
Implement selective demolition protocols for renovation and demolition projects to maximize material recovery
Train procurement teams on circular specification requirements and quality assurance for secondary materials
Establish material tracking and chain-of-custody protocols compatible with emerging DPP requirements

FAQ

Q: How do Digital Product Passports differ from Environmental Product Declarations (EPDs)?

A: EPDs are static documents summarizing lifecycle environmental impacts at a product category level. DPPs are dynamic, product-specific digital records that track individual items through their lifecycle—from manufacture through installation, use, and disposal. DPPs include unique identifiers, real-time location data, and disassembly instructions that enable circular material flows. The EU's new framework requires DPPs to be compatible with EPDs aligned to EN 15804+A2 standards, but DPPs provide the granular tracking necessary for actual material recovery.

Q: What recycled content percentages are realistic for structural applications in 2026?

A: Current best practice achieves 25-35% recycled content in structural concrete without performance compromises—as demonstrated by Zurich's two-decade experience with recycled aggregate mandates. For steel, recycled content above 90% is standard given the material's established scrap-to-steel infrastructure. Timber presents challenges due to contamination from treatments and coatings, but reclaimed structural timber can achieve 100% reuse when properly graded. The limiting factor is typically supply chain logistics and quality assurance, not material performance.

Q: How should emerging market developers approach construction circularity given infrastructure constraints?

A: Focus on three priorities: (1) implement material passports for new construction to create future circular value even before local processing infrastructure exists; (2) design for disassembly using modular construction methods that reduce future recovery costs; (3) engage with extended producer responsibility frameworks being established under national waste management regulations. The cost of implementing these practices is modest compared to long-term value creation, and early movers will be better positioned as regulations tighten and secondary material markets mature.

Q: What are the key cost drivers for circular construction, and where do savings emerge?

A: Initial costs include BIM-integrated passport platforms (€5,000-50,000 depending on project scale), selective demolition premiums (10-20% above conventional demolition), and quality testing for secondary materials. Savings emerge from reduced landfill and disposal costs (often 30-50% of demolition budgets), lower material procurement costs when recycled content is available (15-25% savings typical), and increasingly, regulatory compliance cost avoidance as EPR fees rise. Projects achieving 50%+ recycled content typically show net cost parity or 5-10% savings compared to conventional approaches.

Q: Which circular construction practices should be prioritized for maximum impact?

A: Three interventions deliver disproportionate impact: (1) material passports for high-value components (structural steel, aluminum, copper) where recovery value justifies tracking costs; (2) design for disassembly in façade and MEP systems where replacement cycles are 15-25 years rather than building lifespan; (3) recycled aggregate in concrete, which represents the highest volume application and is technically mature. These focus areas maximize carbon reduction and economic value per unit of implementation effort.

Sources

Circle Economy and Deloitte, "Circularity Gap Report 2025," January 2025
Grand View Research, "Circular Construction Materials Market Report 2024-2033," October 2024
European Environment Agency, "Construction and Demolition Waste: Challenges and Opportunities in a Circular Economy," 2024
McKinsey & Company and World Economic Forum, "How Circularity Can Make the Built Environment More Sustainable," January 2025
European Commission, "Ecodesign for Sustainable Products Regulation (EU 2024/1781)," 2024
European Commission, "Construction Products Regulation (EU 2024/3110)," January 2025
City of Amsterdam, "Implementation Agenda for a Circular Amsterdam 2023-2026," 2023
Holcim, "Circular Construction Annual Report 2024," 2025
Madaster, "Material Passports: Enabling the Circular Economy in Construction," 2024
Cemex Ventures, "Top 50 Contech Startups 2025," January 2025