2. Policy and regulatory barriers

Regulatory and policy frameworks play a critical role in shaping the adoption of emission-free practices on construction sites. This chapter starts with an overview of policies and regulations in the Nordic countries and the EU, and the following section will discuss how these can hinder the reduction of emissions at construction sites.

Unclear regulations, insufficient financial incentives, and a lack of supportive standards are major barriers to reducing emissions at construction sites. These barriers inhibit the transition to emission-free practices by failing to provide the necessary framework to encourage, support, and reward stakeholders for reducing emissions. Certain existing regulations may also slow down or prevent the reduction of emissions from construction sites. In the words of Signe Wenneberg, a Danish author, journalist, and climate activist:

The EU has implemented regulations to curb emissions from various types of mobile machinery. The Non-Road Mobile Machinery (NRMM) Directive targets emissions from construction equipment and other non-road vehicles, setting strict limits on particulate matter and nitrogen oxides. Separately, the EU’s Euro standards regulate emissions from heavy-duty vehicles such as trucks and buses with the aim of reducing pollutants such as CO, NO_X, and PM. However, it’s important to note that these directives do not currently address CO₂ emissions and climate impact.

The report “Policies Enabling the Reuse of Construction Products in the Nordics”

Simon Kaarsberg and Lea Kress, ‘Policies Enabling the Reuse of Construction Products in the Nordics’, Nordic Innovation, Jun. 2023. [Online]. Available: https://www.nordicinnovation.org/2023/policies-enabling-reuse-construction-products-nordics

outlines the regulatory environment in the Nordic countries and the EU. Obstacles to reuse in each Nordic country include conflicting building regulations criteria, technical requirements, a lack of economic incentives, and ambiguous reuse targets. However, the reuse of building materials is one way of reducing emissions from construction sites by reducing waste.

The EU has shifted its focus from solely considering a building’s operational energy performance to a broader, whole-life carbon approach. This involves evaluating a building’s environmental impact from its initial construction to its eventual demolition. This shift is reflected in new and revised EU frameworks and policies such as Level(s), the European Taxonomy, the Renovation Wave, the Transition Pathway for Construction, the European Green Deal, updates to the Construction Products Regulation, the Energy Performance of Buildings Directive, the Ecodesign Directive, and the Waste Framework Directive. These policies encourage reduced emissions during construction and increased reuse of construction materials.

Some Nordic countries have taken these concepts further by imposing specific emissions limits for construction sites, targeting energy use and waste reduction. All the Nordic countries have set goals for minimising waste and maximising reuse rates. The Nordic countries also have general legislation for environmental protection that limits pollution from industrial activities, including construction. However, greenhouse gas emissions are not targeted specifically in this context.

Many municipalities, in the Nordics and beyond, have taken the initiative to reduce emissions from construction projects. These actions include committing to fossil-free construction, setting targets, establishing low emissions requirements at the tender stage, designating low-emission or low-noise zones, supporting pilot projects, and providing subsidies for electric machinery. The following table, 2.1, provides examples of municipal-level policies that have been implemented in Nordic cities to support emission-free construction.

Table 2.1. Examples of municipal-level policies in the Nordics and initiatives to promote emission-free construction sites. See: Clean Construction Policy Explorer

‘Clean construction policy explorer’. Accessed: Nov. 18, 2024. [Online]. Available: https://www.c40knowledgehub.org/s/article/Clean-Construction-Policy-Explorer?language=en_US

This chapter addresses how a lack of strong, unified regulations and slow political responses have delayed progress towards emission-free construction. Regulatory gaps, inconsistent policies, and political inaction are key barriers to sustainable transformation in the construction sector.

The lack of specific regulations that mandate the reporting and reduction of emissions on construction sites is a critical barrier. Without clear requirements for disclosing emissions from material transport (A4) and construction activities (A5), there is no strong external motivation for clients or contractors. As a result, many fail to adopt emission-reduction measures.

The focus of most Nordic building codes is on energy efficiency during the building’s operational phase, with less direct emphasis on reducing emissions during the construction phase and from material transport. For example, emissions from transportation are often not addressed in building regulations, despite the logistics of moving construction materials being a significant source of carbon emissions.

While some countries, such as Denmark, have introduced climate requirements for new construction, these measures often fall short due to high thresholds and limited applicability. For example, Denmark’s CO₂ limit from 2023 of 12 kg CO₂e/m²/year is applied only to buildings over 1,000 m² and is approximately 20% greater than the average building’s emissions. Although future reductions were planned, industry experts argued that these targets were insufficient to meet the goals of the Paris Agreement. In response, more than 600 companies signed the Reduction Roadmap initiative, advocating for prioritising environmental impact over short-term growth.

William Sass, ‘Sådan voksede det danske parcelhus med 100 kvadratmeter. Forstå byggeriets klimaaftryk’, Information. Accessed: Nov. 18, 2024. [Online]. Available: https://www.information.dk/indland/2024/11/saadan-voksede-danske-parcelhus-100-kvadratmeter-forstaa-byggeriets-klimaaftryk

This likely influenced Denmark’s decision in 2024 to reduce the limit to 7.1 kg CO₂e/m²/year, expand the types of buildings covered, and address emissions from construction sites.

Nordic Sustainable Construction, ‘Danish Political Agreement Tightens the Limit Values for New Buildings and Extends the Impact’. Accessed: Nov. 27, 2024. [Online]. Available: https://www.nordicsustainableconstruction.com/news/2024/june/tillaegsaftale-paa-engelsk

However, the new limits remain less stringent than those recommended by the Reduction Roadmap.

Regulatory coverage within climate requirements can be inconsistent. For example, emission regulations may apply only to large buildings, leaving smaller structures unregulated. This lack of comprehensive coverage allows significant emissions sources to go unchecked, contributing to a slower transition towards sustainable practices.

Moreover, limit values for construction emissions are primarily focused on buildings, leaving out infrastructure such as roads, railways, and utilities, which are significant contributors to emissions. Expanding Life Cycle Assessment (LCA) principles to these sectors could play a crucial role in reducing overall environmental impact, yet these measures are not yet systematically applied.

Furthermore, without supportive policies such as market-based incentives, the adoption of emission-free alternatives remains slow. Although many stakeholders such as contractors and logistics providers express an interest in low-emission options, they face high costs and little financial reward for early adoption.

For contractors interested in emission-free construction, uneven competition remains a concern. In some cases, companies that invest in emission-free equipment find themselves outbid by competitors using older, inefficient diesel machinery. To level the playing field, policies are needed that apply the same emissions standards and incentives across all contractors. Additionally, concerns about electricity access at remote work sites indicate a need for infrastructure support to enable zero-emission operations.

“We’d like to invest in-low emission equipment, but other contractors could outbid us with old and inefficient diesel machines” – contractor in Iceland

On a global level, the Paris Agreement remains the most comprehensive international framework to combat climate change. Yet it does not specify the responsibilities of individual countries for achieving the 1.5°C limit, resulting in inconsistent national policies. Climate scientist and professor Johan Rockström, known for his research on planetary boundaries, emphasises that:

“We cannot succeed in delivering on the Paris Accord unless we adopt a full planetary boundary framework. We need to come back into the safe operating space, and it won’t be enough to just phase out coal, oil, and gas.”

‘Beyond the Roadmap’, Reduction Roadmap. Accessed: Nov. 18, 2024. [Online]. Available: https://reductionroadmap.dk/beyond-the-roadmap

Focusing solely on phasing out fossil fuels will be insufficient; policies must also address broader consumption patterns and structural emissions sources, such as those in construction. Moreover, policies must be consistent so that the industry can invest in emission reductions without risk.

National governments must establish emissions-related regulations and industry-specific policies to support comprehensive decarbonisation. The study “Overcoming Barriers to Supply Chain Decarbonization”

A. Zhang, M. F. Alvi, Y. Gong, and J. X. Wang, ‘Overcoming barriers to supply chain decarbonization: Case studies of first movers’, Resour. Conserv. Recycl., vol. 186, p. 106536, Nov. 2022, doi: 10.1016/j.resconrec.2022.106536.

highlights the need for governmental policies to guide businesses and reduce resistance from stakeholders. Businesses rely on clear policy guidance to take effective action. In addition, regulatory pressure reduces resistance to getting other stakeholders on board with carbon neutrality initiatives.

The construction sector’s regulatory focus remains primarily on safety, quality, and durability, often excluding climate considerations. While these standards are essential, they overlook the broader environmental impact of the construction process itself, which, if left unchanged, could permanently affect both climate resilience and human safety. Building codes and standards often lag behind technological advancements, presenting barriers to the adoption of innovative, sustainable materials and practices. It is therefore important to develop regulations in line with contemporary science given the high likelihood of increased extreme weather events and in order to reduce construction projects that contribute to climate change. Regulatory differences across regions create additional hurdles in implementing and standardising low-emission construction practices.

An example of a regulation that hinders development towards emission-free construction sites is strict road weight restrictions that limit the load capacity of trucks. This is particularly problematic for electric vehicles. Electric trucks are heavier than their diesel counterparts due to their battery weight. The approval of new construction technologies, including emission-free machinery, often requires rigorous testing and certification to meet safety and performance standards. While necessary for quality assurance, these processes can take a long time to complete.

In the Nordic region, while building codes generally align with emissions-reduction targets due to a keen focus on sustainability, significant barriers remain. Complex regulations around material use and waste management hinder material reuse, resulting in unnecessary disposal and increased waste-related emissions (module A5 in LCA). There are examples where policies favour new construction over renovation, such as where levies apply to renovations but not to new buildings during the construction phase. This creates a financial disincentive for renovation projects despite their lower environmental impact.

The EU’s Non-Road Mobile Machinery (NRMM) directive imposes strict emission standards for machinery used in construction and other industries, with the latest Stage V standards reducing local emissions. However, while the directive has lowered emissions at construction sites, it also requires more frequent investment in new machinery, which increases production emissions in manufacturing countries. This highlights the complex balance between reducing emissions locally and managing global production emissions, as more frequent machinery updates may unintentionally increase emissions on a global scale.

Current legislative practices are concentrated on a business-as-usual approach and increasing consumption with a focus on small incremental improvements instead of considering the absolute carbon budgets of the Paris Agreement which, if they are to be met, need to be aligned with a reduction in the overall consumption of goods. “If you haven’t consumed something ‘sustainable’, you cannot be sustainable, in the government’s definition,” says Pasi Aalto, Centre Director NTNU Wood, Department of Architecture and Technology, Norwegian University of Science and Technology, highlighting how restrictive definitions of sustainability can hinder broader environmental impact.

Malin Zimm and Pernille Martiny Modvig, ‘Material hierarchies – shifting towards sustainable practices and material in construction’, Nordic Innovation, Jun. 2024. [Online]. Available: https://www.nordicsustainableconstruction.com/knowledge/2024/august/material-hierarchies