4. Analysis: Testing the indicators

This section briefly introduces each of the eight indicators comprised by the study. It then provides a cross-cutting analysis, mainly based on the interviews, for each indicator concerning its incorporation as part of public procurement criteria for municipal construction projects.

The Nordic Networks for Circular Construction WP3: Metrics for Circularity report recommended 11 circularity indicators. Each indicator has been assessed for its relevance to local-level public procurement, which has led to a delimitation from three indicators.

This study does not comprise the following three indicators: circularity properties of buildings and rehabilitation projects, land use change, and resource productivity in construction.

Table 1 lists the eight indicators comprised by this study, including potential metrics proposed as part of WP3 to monitor each indicator.

Table 1 Eight suggested new voluntary indicators for circular construction in the Nordic region

The indicators and their implementation in municipal construction projects are further elaborated in the following.

The utilisation rate of existing building stock can help identify building types available for conversion between functions, and more efficient use of buildings, e.g. through sharing solutions. Different metrics related to the utilisation data are relevant at different levels of decision-making. At the municipal level, the utilisation rate of existing building stock is relevant in the construction planning phase. It is relevant from an economic perspective, but it also concerns considerations of renovating or repursuing existing (empty) building stock instead of constructing new buildings.

The municipalities generally have an overview of the building stock in m², but methods to monitor the utilisation rate of building stock are less developed. It is of interest across the municipalities, e.g., regarding their enhanced strategic focus on preserving the existing building stock.

The Municipality of Helsinki aims to have no more than 3–4% unutilised building stock. Internally, the municipality has lease agreements with different departments. There are annual meetings between the department renting out the properties and the departments of the municipality leasing properties about their current and future need for space.

In Bergen, due to the enhanced strategic focus on circularity, recent efforts have been initiated to place the responsibility of maintaining an overview of the building stock and its utilisation in one municipal department. The purpose is to consider the building stock's availability and function. The common practice has been for the municipality to search for an available plot or building but not with a focus on identifying an existing building that could meet the municipality's specific needs in the given situation.

The municipalities have departments responsible for identifying buildings or building sites to meet municipal buildings' needs. In Reykjavik, it is challenging to identify available buildings, and the municipality has several leasing agreements with the private sector.

Preserving the existing building stock is one of the focal points of the Nordic countries' national sustainability and waste reduction strategies. The metric can be monitored by calculating the number of building permits for renovation against the number of building permits following demolition permits for the same building plot.

This study's focus on public procurement entails a focus on municipally owned buildings for this indicator. The metric is closely linked to the utilisation rate of buildings. However, it further specifies the decisions made at the local level concerning renovation vs. demolition.

The municipalities comprised by this study all have an enhanced strategic focus on preserving the existing building stock through renovation and conversion of existing buildings. The relation between environmental benefits, price, time, and function is still considered in each case. However, due to the overarching climate and environmental targets, the focus has shifted strategically for all municipalities comprised by the study to preserve the existing building stock, factoring in environmental sustainability as a complement to the economy.   

For example, the Municipality of Copenhagen has recently initiated a development project to complete an LCA analysis on the potential of converting a building to a different purpose. The building consultant has concluded that renovating and building an extension of the building will save 20% on CO₂ emissions compared to demolishing and constructing a new building. However, the economic costs of the renovation project are estimated to be approximately 5% higher. The municipality will proceed to realise the renovation project.

For all municipalities, the function of the building in meeting the specific needs is an important consideration, along with its state and compliance with the existing building code, when it is considered for renovation. The energy performance, energy efficiency, and indoor environment/climate of the existing building are issues to consider when deciding whether to renovate. For example, in Reykjavik, there was a period when many buildings were demolished due to mould issues, of which the root could be linked back to the construction phase.

This indicator focuses on the number of buildings that have successfully obtained a certificate with circular properties, including existing and new buildings. It has been recommended that national and international schemes used in individual countries be included to use the indicator to monitor development across Europe. This should include certification schemes that hold minimum circularity requirements. The indicator is a proxy for the more ambitious part of the construction industry because the requirements for achieving certification schemes are higher than the minimum EU and national legal requirements. Municipalities can require the use of a certification scheme through public procurement.

All municipalities comprised by the study have experience using certification schemes for municipally owned projects, including renovations and new construction. The benefits highlighted by using the certification schemes include the safety and the common reference it provides to discuss the different criteria documented for the construction project, including for circular economy. Furthermore, it is a tool for municipalities to demonstrate leadership and push the development of the construction industry towards more sustainable and circular construction.

The municipalities comprised by the study use the following building certification schemes:

The strategy for using certification schemes varies between municipalities. Copenhagen and Reykjavik require the use of the schemes for all large projects. Bergen and Helsinki decide on a case-by-case basis whether they require certification of renovation or new building projects. Certification cost is factored into municipalities' considerations for when to certify. In the case of Reykjavik, the use of a certification scheme can facilitate the municipality's permission to take up a loan from the bank in the form of green bonds for construction projects.

Gothenburg is the only municipality that does not strategically focus on using certification schemes. The municipality has strict requirements for its construction projects, which for some criteria also involve higher requirements than Miljöbyggnad's. The municipality has processes to verify and ensure construction projects meet the required standards. They have an internal green framework (green bonds) where all new investments in buildings meet the standards of this framework.

Helsinki has developed its own light version of certification/​target setting for construction projects. In Bergen, the municipality uses FutureBuilt's framework to support the inclusion of sustainability criteria in uncertified projects.

Environmental Product Declarations (EPDs) provide a standard way of declaring the impacts all the way from manufacturing to usage through Life Cycle Assessment (LCA). This indicator monitors the number of construction products with EPDs. To be used for circular construction, the indicator shall monitor the share of EPDs with circular properties compared to the total number of EPDs. It must include product-group benchmarks for what is considered circular building products. Currently, it is used as an indicator to determine the carbon footprint of a product, and there are challenges to be able to define the circular properties of products with EPDs. Municipalities can set requirements to include EPDs (with circular properties) in public procurement.

Generally, EPDs verify products' carbon footprint in municipal construction projects. The methods used to include EPDs vary. Circular properties regarding reuse and recycling are generally not the main reason for using EPDs for documentation, but in Bergen and Gothenburg, initiatives are underway to be able to document the circular properties of the construction materials used in construction projects. In Bergen, with the use of EPDs, and in Gothenburg, with the use of the national assessment tool and database, Byggvarubedömning (in English: Construction Product Assessment).

https://byggvarubedomningen.com/assessments/  

In Bergen, with the Strategy for Climate and Environment, delivering EPDs for all construction projects has become mandatory. Contractors are also encouraged to collect three alternative EPDs to decide which products to choose. There is ongoing work to develop approaches to weighting circular criteria in EPDs. As part of the FutureBuilt framework used for all construction projects, attention is paid to design for disassembly to reuse and eventually recycle the materials used.

In Copenhagen, EPDs are required and feed into the completion of LCAs at the level of buildings. The Municipality of Helsinki also requires LCA calculations for all building projects, but EDPs are only required in some of the larger projects when certification schemes are being used. Similarly, the municipality of Reykjavik only requires EPDs in large projects, but this is in connection with using the BREEAM certification. This certification scheme requires using at least five construction products with EPDs.

The Municipality of Gothenburg does not require full EPDs, although EPDs are sometimes used in construction projects. Gothenburg has actively pushed forward the use of the Construction Product Assessment tool, which provides a database with health and environmentally assessed products and a logbook tool for documenting all products used in a construction project. The tool helps document the carbon footprint by documenting the share of recycled and reused materials at both product and building levels. Since the EU Taxonomy was introduced (see section 4.5 for further information on the Taxonomy), the requirements to document climate impact have increased, pushing the agenda even more to use the Construction Product Assessment tool. The Municipality of Gothenburg wishes to be able to compare data between different buildings, including for maintenance, demolition, and renovation, breaking down per square meter, to identify the share of reused material.

The EU Taxonomy introduces a classification system to determine which activities and investments are environmentally sustainable. The taxonomy consists of six environmental objectives, and number four is “The transition to a circular economy”. Each environmental objective defines so-called technical screening criteria defining environmentally sustainable activities. When reporting on the EU Taxonomy, companies must disclose whether their activities are eligible or aligned with the environmental objectives. If the activity is taxonomy-aligned, it means it qualifies as environmentally sustainable. If the economic activity is taxonomy-eligible, it means that it is within the scope of the taxonomy and must be assessed. The construction sector is specifically pointed out as one of the sectors that must report on the EU Taxonomy. Therefore, the criteria are specified in relation to sector-specific impact.

Municipalities represent a large share of all building developers and owners, making them an important player in the transition to a circular economy at the local level. Municipalities themselves are not obliged to report on the EU Taxonomy, however, both companies and investors in the construction sector are. As of 2024, only large and listed companies must be disclosed under the Taxonomy, but smaller and non-listed companies will be included in the coming years (2025 and onwards). Financial institutions use the EU taxonomy as a foundation for integrating sustainability as part of the decision-making basis for their investments in construction projects.

By adhering to the taxonomy, municipalities can ensure that their local policies comply with regulations and standards and are consistent with broader sustainability objectives. To ensure compliance, municipalities must align with the documentation requirements on the market and integrate these criteria into their planning, permitting and regulatory processes, i.e., procurement processes. Circular procurement initiatives can, therefore, become an important tool to steer activities and investments towards alignment with the EU Taxonomy and send a strong signal to the construction sector.

Some of the municipalities experience a shift in the market since the Taxonomy is already impacting companies, making it relevant for the municipalities to start integrating the criteria in their processes. However, except for Gothenburg, the municipalities have not yet assessed whether their activities and projects are aligned with the taxonomy. The taxonomy will become more relevant once it has been used for some time and companies and investors have developed internal routines and processes.

The Municipality of Gothenburg has started to ensure alignment with the EU Taxonomy. Efforts to develop internal routines and processes to streamline reporting practices across construction projects are ongoing.

Indirectly, the other municipalities are meeting the requirements of the EU Taxonomy through their use of certification schemes and, in the case of Bergen, the FutureBuilt framework. The schemes ensure alignment with EU and national regulations, including the EU Taxonomy reporting standards.

The following focus on two interlinked indicators: construction and demolition waste and recycling rates. Waste statistics have been used for a long time in the construction sector and are relatively easily accessible. It is mandatory to report the amount of waste received at the different treatment plants and shipped further in the waste treatment system. The WP3 report recommended ensuring harmonised definitions that exclude backfilling operations from the definition of recycling. In Denmark, this has been done in recognition that backfilling is an irreversible and low-grade preservation strategy (downcycling) that only maintains a little of the value of the materials. The waste-data system often only tracks waste materials for recycling, while materials for reuse are not tracked and documented.

Municipalities can require the management of construction and demolition waste and using recycled and reused materials in public procurement of construction projects.

Construction and demolition waste management from construction sites differs among the municipalities comprised by this study. Generally, handling waste on construction sites is challenging because there is often a lack of space and time to sort it into different fractions and containers. Furthermore, it is difficult to set up a body that reviews the sorting on the construction site and ensures it is executed correctly. To ensure the reuse and recycling of materials, the municipalities are still testing approaches to increase this. Helsinki and Copenhagen provide examples of testing this through development projects.

The EU Waste Framework Directive 2008/98/EC states that all construction and demolition waste shall be sorted and recycled in recycling plants. The goal is to recycle 70% of construction and demolition waste by 2020. Implementing this ambitious target is a challenge for most municipalities comprised by the study. However, Bergen has defined a higher target.

Bergen has set a target that 90% of all construction waste from the renovation and new constructions must be sorted. The contractor is required to deliver documentation from the waste handling company. However, there are not yet the same requirements for demolition waste management. Work is underway to develop a Circularity Index, which will guide contractors in delivering a circularity report on the amount of waste sorted for reuse or recycling. The report will include estimations on the number of reused materials presented in the circularity index, indicating how high the recycled amount is. The municipality is further looking into possibilities to introduce requirements on handling demolition waste to improve recycling rates.

Since 2023, there have been legal requirements in Reykjavik for sorting and handling construction and demolition waste. According to the national Circular Law

https://urgangur.is/a-new-law-on-waste-takes-effect-in-2023-what-will-change/

, the waste must be sorted and separated into seven fractions, and contractors must show receipts to a legally certified entity for the type of waste submitted to be accepted by the waste company. Furthermore, for a construction project to be BREEAM certified, contractors must report data for demolition waste and other materials to the city´s Health Department.

Gothenburg has an enhanced focus on collecting and monitoring waste data because the municipality aims to reduce waste by 40% by 2030 compared to 2021 quantities. The municipality is focusing on improving and following up on national legal waste requirements and how that can be used to a broader extent in their projects. There is still a lack of good key performance indicators for maintenance projects. Since the city has a strict climate goal, it is also the main driver in reducing waste quantities. Gothenburg is developing and improving its measuring and monitoring tools to better measure waste per square meter and convert waste figures into climate emission figures. This further motivates the incentive for construction projects to reduce overall waste. The Municipality of Gothenburg requires that materials be sorted to prepare for recycling. However, there is no follow-up or tracing of the material waste after it leaves the site.

In Helsinki, instructions have been developed for, respectively, demolition and new construction projects. For demolition projects, tailor-made instructions and guidelines were created and updated in 2022 based on national guidelines and the National Waste Act. The contractor must recycle or reuse the following materials: concrete, bricks, metals, asphalt, glass, gypsum and bituminous felt. If it is technically and economically possible, the contractor should further recycle untreated wood, plastics, mineral wool insulation, ceramics, paper, and cardboard. Hazardous waste must always be sorted and recycled separately. For new construction projects, the city has conducted a few pilot projects since 2019 to learn from and improve the work on recycling and reuse. Glass, gypsum, and plastic are more challenging to recycle. Experience has shown that it is necessary to have a tailor-made budget for circular construction pilots, and the projects need a clear target and plan already in the early design phase to succeed. Commitment and good communication from the people responsible and involved are also crucial for the recycling to be successful all the way to the end of the project.

The Municipality of Copenhagen sees the potential to impact the market and increase the use of recycled and reused materials. However, they experience challenges in practice on the construction sites because there is still a lot of uncertainty on the market regarding the supply and demand of recycled and reused material, and there are many different fractions to consider. Hence, projects are typically challenged regarding increasing the recycling and reuse rates. The certification scheme DGNB is used for some projects, which gives extra points to recycling and re-usage in demolition projects. This is, in theory, favourable for the projects, but it is hard to fulfil in practice. The municipality is considering trying out material passports in a few pilot projects to improve recycling and reuse rates. However, since this is still in the pilot phase, there are no conclusions yet to draw on efficiency.

Monitoring the kilograms of CO₂e per square meter built may inform the development of reuse, recycling, and introducing renewable/bio-based strategies in new production and maintenance. Recent and current reforms of Nordic building acts are introducing new carbon limits for the carbon footprint

See overview of the recent development regarding carbon limit values at table 1 in Kaarsberg, S.; Kress, L. (2023) Policies Enabling the Reuse of Construction Products in the Nordics. https://pub.norden.org/us2023-441/#130356  

. The new limit values and their dependency on LCA tools are expected to improve data collection through increased use of bills of materials and draw attention to the need to reduce resource use. The EU Energy Performance of Buildings Directive (EPBD) was revised and formally adopted in early 2024. According to this Directive, calculating the GWP (Global Warming Potential), which is used to calculate LCAs, will be required for new buildings by 2028.

All municipalities calculate the carbon footprint, although the methods vary. Calculating the overall climate impact of construction projects is important to comply with climate and sustainability targets. Generally, calculating CO₂ emissions for new building projects is easier than for renovation, maintenance, or demolition.

Gothenburg is developing a new way to measure carbon footprint, where they try to calculate CO₂e emissions per square meter. This should be in place by 2030. The city has developed a tool for this purpose used in renovation, reconstruction, and extension projects. Specific targets are set for 2030, which are more ambitious than the Circular Economy Action Plan from the EU Commission.

Helsinki calculates the carbon footprint for mainly new building construction and, to a lesser extent, renovation projects. The city is also in the process of defining targets for maximum CO₂ emissions from buildings.

Reykjavik measures the carbon footprint for larger projects as part of the BREEAM certification.

The municipalities of Copenhagen and Bergen use life cycle analysis (LCA) to calculate the carbon footprint for their construction projects. In Bergen, it is done for all projects. All municipalities in Norway are required to conduct LCA calculations on buildings. A template is available with different modules, which can be interpreted and weighted differently. The Municipality of Bergen has revised this into a more specified “climate calculator” to ensure reliable and comparable data.

In Copenhagen, LCAs are conducted for DGNB-certified buildings. The municipality is looking into other tools in the market. However, the main tool currently used is LCAbyg. The Danish Building Regulations (BR18) drive the development towards conducting LCAs for future building projects.