In the European Union, nearly one-third of all waste is generated by the construction sector, which is also responsible for almost 40% of greenhouse gas emissions. Applying circular economy principles to the industry could therefore reap huge benefits.
The EU Circular Economy Action Plan highlights great potential for improved circularity in construction, while the Waste Framework Directive tackles construction and demolition waste, prioritising reuse and high-quality recycling of materials. In addition, technological developments improve prospects for circularity – for instance employing artificial intelligence and robotics to automate the identification and sorting of materials, together with new methods to improve material recovery rates. However, large-scale adoption of circular principles in construction remains elusive, with most waste recovery involving low-value actions such as backfilling, where excavated areas are refilled with materials found onsite.
Researchers in Italy noted that circular innovation in construction remains an understudied area, and that innovation patterns in the sector may be linked to factors such as the immobility and durability of products; the complexity of projects; and the project-based nature of the industry. They set out to investigate the topic with a study of 376 firms in the Emilia-Romagna area, a comparatively wealthy region and the first in Italy to enact circular economy legislation.
The researchers conducted a questionnaire-based survey, collecting information on the characteristics of companies, their general level of innovation and their adoption of circular practices. They specifically asked about whether companies practiced:
- Replacement of natural inert materials with high environmental impact with sustainable materials
- Reduction of construction waste produced
- Selective demolition
- Decontamination
- Reuse of construction and demolition waste in firms’ own production processes
- Transfer of waste to other companies for reuse in their production processes
Responses showed that while innovation in construction is generally influenced by market economics, regulatory and policy factors, when it comes to circular innovations, firm size and local market orientation were key. Larger firms allocate more budget for investing in research and development and were more likely to adopt circular innovations.
A more interesting finding supported the idea that a firm’s connections to other construction firms in the local market was also a factor. Proximity of firms to each other, as well as their level of collaboration, helped reduce the costs of transporting materials and so supported the exchange of salvaged and recycled raw materials and ideas. Such local advantages translated into willingness to adopt innovations: companies that did at least half of their business locally were 15 per cent more likely to adopt new circular practices. Shorter, local supply chains also improved quality control.
The finding that local material flows encourage circularity provides food for thought on how to better engage European builders. Allocating resources to support R&D and foster local inter-firm collaboration could promote circular economy practices amongst small businesses and entrepreneurs in the sector. The researchers acknowledged that the work covers only one period and one region, however, the sample size was large and its findings merit being considered in policy discussions.
In particular, increasing support for R&D investments in costly innovations such as selective demolition and decontamination, and promoting inter-firm collaboration to stimulate the flow of construction byproducts could be useful. The researchers also emphasised the importance of dedicated training and information for managers, market-based incentives to narrow the cost gap for using secondary aggregates and mitigating perceived risks from secondary materials.
Reference:
Chioatto, E., Montanaro, A. and Mazzanti, M., 2026. “Local Heroes”: Construction firms pioneering circular innovation. Ecological Economics, 241, p.108862. https://doi.org/10.1016/j.ecolecon.2025.108862
To cite this article/service:
“Science for Environment Policy”: European Commission DG Environment News Alert Service, edited by the Science Communication Unit, The University of the West of England, Bristol.
Notes on content:
The contents and views included in Science for Environment Policy are based on independent, peer reviewed research and do not necessarily reflect the position of the European Commission. Please note that this article is a summary of only one study. Other studies may come to other conclusions.
