2
Kickstart Circular Economy
The construction industry accounts for 62% of UK waste and 50% of material use.
The industry must rapidly transition to a circular economy reducing construction waste and primary resource extraction. This will generate new job opportunities: almost 90,000 new UK jobs were created in the emerging circular economy between 2014-2019. And in turn, this will reduce carbon emissions, environmental degradation and pollution.
How to reduce material waste and retain value through reuse
1. Maximise potential of existing buildings and infrastructure
Develop a policy hierarchy which ensures building retention is considered first, then reuse of building components and lastly deconstruction.
Take action to bring back into use our vacant or underused homes and buildings.
2. Establish a national circular economy strategy
Mandate pre-demolition material audits and minimum recovery rates as part of National Planning Policy Framework incentivising re-use over demolition.
Mandate material passports in both new build and retrofit. Establish National Standards and a system of recording and recovery of materials.
Establish digital and physical material banks for the resale and reuse of materials, with input from strip out and demolition contractors to rapidly transition their business model.
Mandate fixed and escalating percentages of material reuse in construction. Allow downcycling only in special circumstances; otherwise all materials to be deconstructed (not demolished) to ensure maximum resale value.
All buildings to be designed for deconstruction.
Ensure government procured buildings lead the way by adopting the approaches outlined above to act as catalyst for innovation.
How to financially incentivise the circular economy
3. Provide financial incentives and tax reform to support the circular economy by
Rebalancing VAT between existing and new construction e.g. removing VAT on refurbishment.
Increasing taxes on short-life products, applying the polluter pays principle.
Reduce tax on labour relative to taxes on raw material resources in order to adjust balance towards circular production and lower material consumption.
Accelerating investment and testing for reclaimed and biobased materials e.g. timber and hemp. Prioritise investment and tax breaks to low carbon alternatives where supply is secure and will not lead to an increase in emissions outside the UK.
Increasing tax on second homes and empty properties.