What the Circular Economy is – and why it matters
In a world where “take-make-dispose” practices are no longer viable, the circular economy offers a smarter path forward. It focuses on extending the lifespan of materials by promoting reuse, refurbishment, remanufacturing and recycling, rather than relying on one-way linear systems. As defined by the European Commission, it involves “sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible”.
This model is vital for our planet. A circular economy across just a few key sectors, such as cement, aluminium, steel, plastics and food, could potentially reduce global CO₂ emissions by around 9.3 billion tonnes per year by 2050[1]. Beyond its environmental benefits, it can also bolster economic resilience, creating jobs, reducing costs and lessening dependence on virgin resources.
In Europe, and particularly in real estate, adopting circularity is essential. Buildings and construction account for over 40 per cent of the EU’s energy consumption, more than 50 per cent of its resource use and 46 per cent of its waste generation[2]. According to the World Economic Forum, applying circular economy principles across the built environment could reduce embodied carbon emissions by around 13 per cent by 2030 and up to 75 per cent by 2050, compared with a business-as-usual scenario that assumes current construction practices continue unchanged[3].
Circular Economy in Real Estate Across Europe
In Europe, the shift from wasteful building practices to a circular model is both urgent and promising. As of now, only about 30 per cent of construction in Europe is circular, meaning that only a fraction of materials is reused or recycled, yet there is strong potential to reach 50 per cent circularity by 2040. If achieved, this could cut embodied greenhouse-gas emissions in half and reduce annual material use by 8 per cent, from 642 million to 590 million metric tonnes[4].
Beyond the headline numbers, these practices yield powerful benefits. Better design that avoids material overspecification, such as using only what is structurally necessary, can reduce emissions by around 12 per cent. Shifting to alternative, low-carbon cement types can deliver a further 16 per cent reduction, while reusing structural steel at demolition stages can contribute about 15 per cent in savings[5]. Collectively, these measures can add up to significant improvement across the life cycle of buildings.
These efforts are not limited to theory. Design projects have demonstrated how circular trade-offs work in real life. For example, circular construction can reduce CO₂ emissions from materials by 38 per cent by 2050 by cutting demand for virgin steel, aluminium, cement and plastics. Framing the built environment as a material bank, not just a one-time development, offers a sustainable blueprint for cities and buildings alike[5].
Closer to home, in Berlin, projects such as the CRCLR House / Impact Hub Berlin have embraced circular refurbishment: about 70% of the materials used were upcycled, recycled or sustainably sourced, with reclaimed windows, doors, bricks and reused timber making up a significant share. Another is EDGE SüdKreuz, an office building near Berlin Südkreuz, which achieved a DGNB Platinum rating. The use of a timber-hybrid construction and the modular CREE system reportedly reduced embodied carbon by more than 50 per cent relative to a reference conventional building. The building is designed to be a high-performance structure, optimised for energy efficiency to minimise operational carbon emissions. All materials were recorded in the MADASTER materials database[6].
Policy support is also accelerating the shift
The EU Circular Economy Action Plan, the EU Taxonomy for sustainable finance, and revisions to the Energy Performance of Buildings Directive (EPBD) are all pushing investors, owners and developers to account for a reduction of embodied carbon, material efficiency and circularity in their projects.
For instance, under the revised EPBD, Life Cycle Analysis (LCA) will be required for all new buildings by 2030, with a focus on whole-life carbon reporting. Several European countries have already embedded LCA into their building codes – In France and Denmark, it is mandatory for all new buildings (RE202 and BR18) and in Germany, it is mandatory in publicly funded residential and public buildings (QNG).
This regulatory alignment is making circular construction not only desirable but increasingly necessary for compliance and investment readiness.
How EnviroSustain can help:
At EnviroSustain, we know that the shift to a circular economy in real estate is both a challenge and an opportunity. With more than two decades of experience across Europe, we help our clients put circular principles into practice—whether through advising on low-carbon materials, integrating refurbishment strategies, or embedding long-term lifecycle thinking into projects.
- Life Cycle Analysis (LCA)
A key part of our approach is using LCA to measure and reduce the embodied carbon of buildings across every stage, from design and construction to operation, renovation and eventual deconstruction. LCA gives our clients a clear picture of environmental impacts and identifies where reuse, disassembly or material substitution can achieve the biggest gains. - Sustainable Materials
We support clients in selecting sustainable materials that balance performance, availability and cost with circular design principles. By prioritising products with lower embodied carbon, verified environmental product declarations (EPDs) and potential for reuse, we help projects align with European sustainability frameworks and future-proof building portfolios. - Materials Passports
Materials passports take circularity one step further by recording the characteristics and potential reusability of materials in a digital format. They help ensure that today’s buildings become tomorrow’s resource banks. We’ll explore how they work in our next article.
Further Reading:
Circular economy in the built environment: European Environment Agency – Building renovation: where circular economy and climate meet
Sources:
[1] Ellen MacArthur Foundation, Completing the Picture: How the Circular Economy Tackles Climate Change (2019)
[2] Arup, Time to act: how the EU’s circular economy is reshaping buildings (2022)
[3] World Economic Forum, Circularity in the Built Environment: Maximizing CO2 Abatement and Business Opportunities (2023)
[4] Bain & Company, Europe’s construction sector could achieve 50% circularity by 2040 (2022)
[5] Ellen MacArthur Foundation, Circular economy in construction: regenerative built environments (2022)
[6] Metropolis, This Berlin Office Was Germany’s Most Sustainable Building in 2022
