Stakeholder perspectives on the costs and benefits of circular construction

This section presents the results of the analysis on stakeholder perspectives regarding the costs and benefits of CE material efficiency strategies in construction. Each data presentation is immediately followed by a discussion to interpret and contextualize the findings. Our results on costs and benefits of adopting CE material efficiency strategies are divided into two main areas in accordance with research objectives: (1) contribution to overall organisational costs and benefits (section “Contribution of CE material efficiency strategies to overall costs and benefits”), (2) primary cost drivers and benefits (section “Cost drivers and benefits of CE material efficiency strategies”). Figure 3 demonstrates the inputs and outputs for the models in relation to the sections in Results and Discussions. For the full list of survey questions, see Supplementary Information I.

Source: Authors.

Research questions, survey construct, and inputs and outputs for the models.

Contribution of CE material efficiency strategies to overall costs and benefits

Costs

Several decision tree models were developed to address the research questions using specific survey elements. The first model focused on assessing the impact of CE material efficiency strategies on overall costs for construction organizations. This model was based on responses to Question 7.2, which asked, “How important are the costs of circular economy practices for your organization?” and on the perceived costliness of common CE material efficiency strategies, such as offsite production and material recycling (Questions 10.1–10.7).

The results are illustrated in Fig. 4a and b below. In the studied European countries, the top three factors that influence cost increases are perceived to be optimizing the reutilization of materials, using disassembly elements, and producing elements offsite. Conversely, optimizing structural elements and materials is deemed to contribute less to overall cost increases. Although some variation exists within the analyzed European cohort, the primary impacts on overall costs remain associated with the recovery of construction materials, disassembly requirements, and offsite production. Among the studied non-European countries, similar results appear, except that optimizing structural elements replaces ‘using disassembly elements’ as a top contributor to overall cost increases. Maximizing storage for reuse ranks as the fourth factor in both the studied European and non-European countries.

Source: Authors.

SHAP values plot from top to bottom (a) European, MAPE: 31.15%, (b) non-European, MAPE: 30.65%.

According to Fig. 4, cost reduction could be achieved in the studied European countries by focusing on the reutilization of elements, which stakeholders identify as the most significant contributor to overall costs among CE material efficiency strategies. Other notable influencing factors include design for disassembly (DfD) and offsite production of structural elements. In line with the European waste hierarchy, reuse takes priority over recycling¹⁷. Furthermore, recycling is perceived as contributing less to overall costs compared to reutilization (Fig. 4a), likely due to the established recycling practices for construction and demolition waste (C&DW)¹⁸ and the recognized value of C&DW materials.

The literature indicates that the primary challenge in reusing construction materials is the cost associated with these impacts, as confirmed by this analysis. Initial investments pose a barrier to entry in the studied European countries, as highlighted by respondents in Norway^19,20. Latvian respondents note that reuse can be costly due to a lack of infrastructure²¹. Modular construction, an example of DfD and offsite production, also requires higher upfront investment, with no proven significant cost savings to date²². Nonetheless, Norway has one of the highest rates of offsite production in housing²². In Spain, sustainable waste management faces various influencing factors, including the need for recycling and re-evaluation by waste operators. Construction waste incurs direct costs for collection and recycling, as well as potential revenue through resale, supporting economic, social, and environmental sustainability^23,24. The variation in results across the studied European countries may reflect different recovery and recycling models—centralized versus decentralized—that influence the impacts on overall costs²⁵.

Among the studied non-European countries, concerns are similar (Fig. 4b), particularly regarding offsite production and optimizing reuse, which are key contributors to overall costs within CE material efficiency strategies. Unlike in the studied European countries, optimizing structural elements also ranks highly in terms of costs. In general, CE practices are less developed in the non-European regions studied. For example, CE is less widely studied outside Europe, apart from countries like the US and China, which were not represented in this study²⁶. This may reflect lower emphasis on CE or limited representation in stakeholder networks associated with this research. In these countries (Kazakhstan, UAE, Pakistan, and Turkiye), the CE legislative framework is either new or absent^27,28. In UAE, legislation emphasizes C&DW reuse and recycling, but stakeholders find compliance challenging²⁹. Additionally, the lack of a centralized, non-competitive recycling model—though planned—may result in recycling being seen as a less significant contributor to overall costs, as associated costs are often overlooked^30,31.

Global cost-benefit analyses of offsite production are essential for aiding decision-makers and identifying the most effective CE material efficiency strategies. Both European and non-European stakeholders recognize the impacts on overall costs associated with maximizing storage for reuse and implementing disassembly practices, highlighting an industry-wide challenge. Increased investment in R&D to make offsite production more affordable is vital, and collaborative platforms are needed to promote knowledge sharing among European stakeholders. This collaborative approach can foster a culture of learning and best practice sharing, advancing the cost-effective implementation of CE material efficiency strategies.

Benefits

The second model assessed the importance of overall benefits for organisations associated with CE material efficiency strategies, linking responses to Question 7.1, which asked, “How important are the benefits of circular economy practices for your organization?” with levels of agreement on the benefits of these strategies (Question 9.1–9.7). Figure 5 provides the results for the studied (a) European and (b) non-European countries. The results reflect a strong perceived benefit of material reuse, optimization of structural elements, offsite production, and recycling in the studied European countries. The studied non-European countries also value offsite production, material reuse, and optimization of structural elements. Moreover, using structural elements that can be easily disassembled is also among the top factors perceived as providing benefits, suggesting the importance of developing construction methods where the end-of-life of a building is considered at the design stage.

Source: Authors.

SHAP values plot from top to bottom (a) European, MAPE: 38.51%%, (b) non-European, MAPE: 27.48%.

The data presented in Fig. 5a shows the commitment of the studied European countries to promoting material efficiency to achieve circular economy objectives. This commitment indicates significant endorsement achieved through a combination of measures. One such measure is the optimization of the amount of material reuse, which involves identifying and prioritizing materials that can be reused and increasing the storage capacity for such materials. This approach has enabled construction companies to reduce their reliance on virgin materials, decreasing environmental impact and increasing resource efficiency. Another key strategy that the studied European stakeholders prioritize is reducing the number of structural elements used. This approach promotes efficiency by minimizing the use of materials and reducing waste. By adopting this approach, projects can significantly reduce their carbon footprint and enhance their sustainability credentials. The prioritization of material reuse in both overall cost and benefit models indicates a significant shift and dedication toward the circular economy approach. This is reinforced by legislation such as the Circular Economy Action Plan³², emphasizing the importance of reusing waste. These regulations not only encourage but also require innovative waste management strategies. Additionally, the commitment of the studied European participants to material reuse is further demonstrated by ongoing investments in recycling infrastructure and technology. According to a recent study³³, Europe has devoted significant resources to improving infrastructure and introducing advanced recycling technologies, demonstrating its strong commitment to reusing materials. Recycling C&DW among European stakeholders is critical for bringing economic benefits, as this saves raw material supply costs, transportation, and disposal³⁴.

For the studied non-European countries (Fig. 5b), priorities include offsite production, material reuse, and optimization of structural elements. The convergence on the importance of maximizing storage for reuse across both the studied European and non-European countries (Fig. 5a and b) implies a shared understanding of this practice’s economic and environmental benefits. The regional variations in prioritizing practices like reuse and recycling in Europe and disassembly in non-European countries show the importance of contextual factors.

Cost drivers and benefits of CE material efficiency strategies

Costs

This model linked the costliness of CE material efficiency strategies (average score of the sub-questions in Question 10) with the perceived costs of key enablers and drivers for these strategies (Question 12.1–12.12). Figure 6 illustrates the results for the studied (a) European and (b) non-European countries. Within the studied European countries, results indicate that regulatory non-compliance, resulting in fines and penalties, is a top cost driver. Additionally, reduced work efficiency, stemming from workers’ resistance to change, significantly impacts overall expenses, compounded by maintenance costs and workflow disruptions due to necessary adjustments. The data also points to concerns about expenditures related to staff expertise, reflecting the costs associated with training and development.

In contrast, for the studied non-European countries, waste treatment costs stand out, potentially indicating less-developed waste management infrastructure. The shared costs associated with transportation, technological upgrades, and staff expertise between the studied European and non-European datasets illustrate these as potential global challenges for CE implementation. Notably, both groups of countries cite work efficiency as being affected by resistance to change, which speaks to a widespread challenge in managing human factors in organizational change.

Source: Authors.

SHAP values plot from top to bottom (a) European, MAPE: 29.89%, (b) non-European, MAPE: 33.10%.

The findings in Fig. 6a indicate that non-compliance costs are a primary concern within the studied European countries. A similar emphasis on regulatory penalties tied to sustainable C&DW treatment has been noted elsewhere³⁵, likely reflecting the stringent regulatory environment in Europe (e.g., 70% of waste should be reused, recycled, or recovered)³². Reduced work efficiency due to resistance to change is also a significant cost driver, which can be explained by the higher labor costs in European countries³⁶. Labor costs are claimed to be among the most critical barriers to C&DW recycling in Europe³⁴. This resistance is linked to a lack of awareness and interest, also listed as a significant barrier in Fig. 6a, which is aligned with other studies^13,36. Maintenance costs, identified as a top contributor to financial expenses¹⁵, can disrupt established procedures and lead to additional costs.

On the other hand, while waste sorting was considered less important among the participants of this research, it still contributes to the overall cost of C&DW management. However, in a more recent study³⁴, European stakeholders identified waste sorting as a significant factor in C&DW management. Thus, while waste sorting may have been previously considered a less significant contributor to financial expenses, it might be gaining more attention as a crucial aspect of C&DW management in the European context.

In the studied non-European countries (Fig. 6b), the significance of waste treatment costs is noteworthy, potentially indicating less developed waste management infrastructure, as suggested by other scholars^37,38. The importance of proper waste treatment using various techniques in developing countries is also emphasized³⁹. In Kazakhstan, for example, the cost of managing waste does not significantly impact the amount of waste that is reused and recycled⁴⁰. The results provided in Fig. 6b also highlight stakeholders’ concerns regarding expenditures related to staff expertise, reflecting the costs associated with training and development, which was underscored in²⁹. Similarly, Turkish scholars emphasized the need for appropriate expertise among local construction workers⁴¹. A unique situation is observed in the UAE, where the prevalence of short-term contracts leads to a continuous workflow and the need for repeated training for new employees. This situation hampers the overall development of a stable work culture²⁹.

Another significant concern identified is the cost of transportation (Fig. 6b). Stakeholders in Kazakhstan’s construction sector deemed the transportation costs of C&DW to be very important⁷. This emphasizes the need for efficient logistics and transportation strategies to manage construction waste. Fines and penalties in non-European countries received low scores in Fig. 6b, probably because they might be lower or less stringent than in Europe.

Considering the results from the studied European countries in our survey, we suggest following a balanced approach to non-compliance costs, raising awareness and motivation among workers to avoid their resistance to change, and carefully planning for possible maintenance costs. Meanwhile, in the studied non-European countries, the development of waste treatment infrastructure, qualitative employee training, and considerate planning of the most efficient logistics could play an essential role in alleviating the potential economic burdens associated with CE material efficiency strategies. The results also show that the understanding of CE differs between European and non-European countries; for instance, maintenance costs are much more critical for European stakeholders. The broader range of mean values for non-European countries compared to European ones regarding cost escalation factors is also noteworthy and suggests clearer paths for improving CE implementation.

Benefits

The final model (Fig. 7) links the level of specific benefits of CE material efficiency strategies (average score of the sub-questions in Question 9) with stakeholders’ perceptions of where these benefits originate (Question 11.1–11.9). The survey responses highlight differing significance among various sources of specific benefits between the two groups of countries. Among the studied European countries, there is a marked emphasis on advantages from reducing waste, alongside benefits from using local materials and an improved public image of CE strategies. In contrast, the data from the studied non-European countries reveals different results, emphasizing the potential for market developments as an important benefit, focusing on features like establishing resale opportunities, encouraging partnerships among construction parties, and exploring potential tax advantages.

Source: Authors.

SHAP values plot from top to bottom (a) European, MAPE: 32.55%, (b) non-European, MAPE: 17.75%.

In the responses from the studied European countries (see Fig. 7a), a greater focus is placed on waste reduction, which resonates with previous findings where the reuse of materials was a top contributor to both costs and benefits. The results in Fig. 7a demonstrate Europe’s strong commitment to decreasing waste and enhancing reuse, aligning with legislative acts and national strategies. Additionally, new resale markets emerge as the second most impactful factor on specific benefits, indicating a growing economic landscape where CE is becoming a key driver. This interest in creating markets for used, upcycled, recycled, and repurposed goods supports environmental goals and fosters new business opportunities. Indeed, construction and demolition waste reuse and recycling markets were predicted to be beneficial, provided that solid stakeholder collaboration is ensured⁴². For example, a study in Spain concluded that although the pursuit of construction sustainability has driven the use of partially or wholly waste-based eco-materials, current business models need revision for this to be successful⁴³.

The results in Fig. 7b for the studied non-European countries show that greater emphasis is placed on factors such as new resale markets, improved stakeholder collaboration, and potential financing attracted through reduced environmental impact. These factors emphasize the creation of new channels for business expansion and income generation. The interest of Kazakhstani stakeholders in resale markets was also presented in previous studies^6,7. While there is a consensus between the studied European and non-European countries on the importance of developing new markets, there seems to be less enthusiasm for reducing waste generation in non-European countries. This discrepancy could stem from several factors, including economic considerations, existing waste management infrastructure, and the perceived immediacy of economic benefits versus long-term environmental benefits.

Notably, prioritizing new market development over waste reduction highlights a potential area for policy refinement and awareness-raising to ensure a balanced approach to economic and circular economy development. Both regional contexts are highly motivated to benefit from waste reuse and its resale markets. The European focus on waste reduction is closely aligned with national legislation and strategies, demonstrating a solid commitment to environmental sustainability. The region has invested significantly in recycling infrastructure and technology, reinforcing its commitment to reusing materials. In contrast, non-European countries exhibit a slightly different approach, with greater emphasis on collaborative construction efforts and funding opportunities due to reduced environmental impact. The results highlight the importance of adapting waste management strategies to each region’s specific circumstances and priorities while encouraging greater global coordination and cooperation to address common challenges in waste generation and management.