Views Regarding Circular Economy

Our findings shows that the Norwegian construction industry is moving in the right direction in terms of circularity as there is emphasis on using environmentally friendly products such as timber and steel (Circular Norway, 2020). In addition, Norway is a pioneer with regards to energy-efficient buildings (Circular Norway, 2020). The importance of starting to consider improved CE strategies was also portrayed in the webinar held by buildingSMART on April 28th, 2021, where key actors from the industry and government representatives had gathered to discuss how they could prepare for the new circular regulations. However, the report from Circular Norway (2020) shows that the construction industry has the highest consummation of raw materials, accounting for 58,3 billion tons. Moreover, the report states that the industry accounts for 20 percent of all waste, and that only 28,8 percent of the produced waste is recovered. A considerable amount of valuable demolition and waste which could be reused and recycled is therefore not entering the circulatory system. This is also due to the fact that a lot of the materials are locked into stock in buildings. Combining both construction and operation of buildings, the industry accounts for 15 percent of the greenhouse gas emissions in Norway (Circular Norway, 2020). Thus, the report states that it is imperative that the construction industry reduce material consumption by entering a circular system.

When asking about how the current situation is with regards to CE practices in the construction industry, most of the interviewees aligned with findings from the buildingSMART webinar and the Circular Norway report. They commonly held that the industry is aware that CE is important and that environmentally friendly practices are necessary to get in place. However, the interviewees tended to focus more on the perceived problems with transitioning into CE than to talk about how the industry standards were today with regards to environmental standards. Even though interviewees expressed concern with environmentally friendly practices, the interviews revealed that such practises are down-prioritised for other considerations, such as cost or deadlines, if the project managers have to make

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priorities. This was explained by one of the interviewees arguing that; “Circular economy and green practices are very hot in general, however it often comes down to something being delivered within a deadline, and then there are other considerations to take into account” - C3. As we have set out to investigate whether improved supply chain visibility could enable CCSC, we asked the interviewees specifically what they believed to be challenging with regards to implementing CE practises.

4.1.1.1 Regulations

Most of the interviewees agreed that regulations are necessary in order to become more environmentally friendly and truly incorporate CE practices. As stated clearly by one interviewee; “I think this is a political aspect. I believe the circular economy is much more expensive (...) There must be political demands and guidelines for the construction industry to partake in it” - D2.2. When asking what political guidelines, the interviewees saw as probable, it was stated by the same interviewee that; “I think that requirements are coming. Regulations for sharing product information must be established”- D2.2. The need for regulations with regards to CE was also shown by another interviewee stating; “Regulations! There will be regulations for establishing common parameters for reuse” - E1. Another interesting finding was connected to the fact that the industry is very capital intensive, and that this is problematic because buying new materials is far too lucrative due to the low prices. This is shown in the following argument; “This is a capital strong industry, and it is demanding. The materials today are far too cheap, and it is lucrative to buy new - This is why you need the regulations” - D4.

4.1.1.2 Incentives and Business Models

Another barrier that was pointed out by interviewees was the lack of incentives and established business models with CE practices. “You have to have some incentives. (...) How can you motivate change? With a bit of a carrot and stick mindset” - C1. Some of the incentives which were discussed involved getting tax releases if companies could document the usage of circulated materials, or “green loans” that provide better interest if the project complies with CE values. However, most incentives were connected to price and favourable business models. This was

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best stated by one interviewee bluntly saying; “Everybody wants to make money.

This is the number one rule. Everything is money” - D2.1.

The interviewees argued that the business models of today are fully functioning, and that the most important factor for implementing new models is that the change is economically favourable. This is illustrated in the following statement; “First and foremost, it's about the financial perspective. If it's not much more expensive, it is easier to reach. If it is a little more expensive, we can still reach it. It just cannot be much more expensive” - D1. The common view among interviewees was that they would not consider implementing CE practices if it was shown to be more expensive. However, if it could be done with increasing costs by much it could be considered as it would be good for the company's reputation. Further elaborating on this, one participant answered; “I believe that economic incentives are the key factor. It's what gets people moving in one direction” - C3. The argument continues by another expert; “I do not believe that anyone will reuse materials in their fancy new building if it is not financially motivated. It’s that cynical and that simple” - D2.1. In addition, interviewees argued that sustainable materials usually are more expensive than the materials used today, and that this could make companies less likely to invest in these types of materials. This was illustrated in the following statement; “When it comes to CE, used or recycled materials must become cheaper than buying new ones” - C3.

4.1.1.3 The Need for Visibility and Digitalization

Even though interviewees argued that getting regulations and incentives in place was important, improving the information flow with regards to materials and their environmental status was argued to be essential in order to transition to CE business models such as CCSC. One of the interviewees also argued that improving material information was the most important part for enabling the transition. This was clearly illustrated in the following argument; “The information flow is essential for us to avoid wasting valuable resources. That is the most precarious and important thing here. In addition to avoiding losing information along the way” - E1. This was further elaborated on as interviewees argued that in order to have a circular usage of materials it is important with good material information and visibility in the supply chain and through the product life cycle. This was also confirmed in our

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findings from viewing the Circular Norway (2020) rapport. In the rapport it was stated that being able to track used resources, and strengthen the connections between the supply chain actors through digital platforms and technologies was one of the prerequisites for bridging the circularity gap. However, as of now the industry is somewhat unaware of the origin of their products, as explained by the following answer; “We know that multiple of the products we use in our constructions we don’t know the origin of or their social and environmental footprint” - D4. At the buildingSMART webinar, several speakers also discussed the problems connected to finding the right information and documentation for materials, which are needed in order to reuse or recycle these materials in a circular system. This argument supports the theory connected to problems with transitioning to CCSC for the construction industry, as sufficient supply chain visibility is needed.

When asked about the current situation regarding CE in the construction industry, several interviewees stated that it is crucial that the industry becomes more digitized in order to improve the information flows with regards to used materials. Becoming more digitized was also pointed out as a condition for partaking in a CE business model, because improved digitalization could facilitate improved supply chain visibility. This view is illustrated by the following statement; “We are completely dependent on digitalization in order to succeed with a circular economy” - D4. The attended webinar held by buildingSMART discussed how technologies such as BIM, RFID, artificial intelligence (AI), and 3D etc. could be used when establishing strategies for becoming more circular, and the importance of getting a more technological and digitized construction industry was highlighted by several speakers.