Circular Economic Opportunities in a Post-Covid World

Posted: 29th July 2021 Will Morley, Junior Consultant

First published by Inside Housing here.

The green agenda is high on the Government’s priority list to stimulate economic recovery, and provides a unique opportunity to begin implementing and embedding circular economy opportunities into homes and house building. Circular economic principles offer solutions to address issues of affordability, low-quality buildings and adaptability of current stock whilst aligning with future trends for government targets, economic growth, and reducing the risk of a further shock to the sector.

Released in April 2021, the UK’s sixth Carbon Budget highlighted that direct greenhouse gas emissions from buildings account for 17% of UK emissions, whilst indirect emissions account for nearly a quarter of the UK’s greenhouse gas emissions (Carbon Budget, 2021). Whilst great steps have been made over the last few decades, significant changes still need to be made to achieve carbon net zero, particularly in buildings.

Every building has embodied, operational and end of life carbon emissions and the built environment sector contributes to 40% of the UK’s carbon footprint (Savills Property and Carbon Spotlight, April 2021). As highlighted in the diagram below, carbon is present at all stages of a property’s lifespan. Therefore, to achieve net zero, emissions will need to be eliminated from construction, through operation, to the end of the building’s lifespan. Both government policy and the post-covid environment can provide opportunities to embed circular economic to all stages of a properties cycle.

This image describes the carbon life cycle, stages include: embodied carbon, operational carbon and end of life carbon. This cycle is vital to economic opportunities.

Carbon can be released from the demolition, transport and disposal of building materials at the end of a building’s lifecycle. If a building’s materials and infrastructure can be recycled rather than extracting new materials and wasting the embodied carbon from making the materials to begin with, then it can limit emissions significantly. Given the shortage of virgin building materials, and low revenue and cash flow amongst construction companies coming out of the pandemic, recycled or remanufactured materials offer a cost effective and readily available opportunity for businesses. Investments in reusing building materials and recycling deconstructed physical infrastructure is a key enabler for build material circulation, as well as creating new jobs within the circular economy.

Another key circular economic principle is to design out waste and pollution by upgrading and renovating homes to improve not only its energy efficiency but its durability and adaptability. This can offer a long-term cost-effective solution to the supply of energy inefficient buildings. In particular, converting underutilised empty office space may be a solution to address housing supply in a post-pandemic future. City of London has recently announced that they are renovating empty office and business place following the pandemic to create 1,500 homes (Source).

Ensuring operational carbon is minimalised through good operational and maintenance practises is key to reducing energy wastage. Given that 44% of all social rented homes in England (circa 1.8m) have an EPC rating below C and 90% of all homes in England are using fossil fuels for heating, cooking and hot water (source: Energy White Paper, 2020), the UK needs to make significant steps to tackle the energy inefficiency of its current homes to achieve present and stricter future government targets.

There is a need for social landlords to consider replacing traditional fossil fuel powered heating systems with zero-carbon heating systems (e.g. electric pumps) when conducting cyclical maintenance and retrofit programmes on existing properties. Government schemes like the Social Decarbonisation fund, funding for Electric Heat Pump Installation and the Clean Homes Grant are enablers for housing providers to take the first steps to embedding circular economic principles for the future.

The post-covid green economic recovery offers a unique opportunity to embed circular economic principles into each stage of a property’s lifecycle to create a cost-effective and liveable solution that aligns with current climate trends and future targets.

Social landlords should review how circular economics principles can be embedded into future new build procedures and existing asset management strategies in order to maximise the opportunities arisen by the post-covid operating environment and for long-term future-proof sustainability.

Written by Will Morley, Junior Consultant at Altair – do get in touch for further discussion.

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