Table of contents
Ayming Institute : the think tank of the Ayming Group
The Ayming Institute (AI) aims to help leaders in the private and public sector gain a deeper understanding of the evolving global economy by focusing on three areas.
The first area is sustainability. We believe that the environment and social responsibility are critical issues for businesses today. For this reason, our content aims to help companies integrate these issues into the way they make decisions.
The second area is business development. Through our content, we wish to help companies to develop a stronger business culture and a sustainable approach to growth.
The third area is the people side of the business. With our content, we want to support individuals as they navigate their careers, learn new skills, and find ways to contribute in a world that is constantly changing.
Our strongest commitment is to help organizations better understand how markets are changing, and how they can build better businesses as a result. We aim to do this by providing analysis of the global economy’s transformation; sharing our insights through thought-provoking publications, and engaging business leaders in conversations about the economic changes that are affecting all of us.
Introduction
To complete any major building contract successfully, the project team must marshal a complex supply chain, dovetailing myriad components and an array of technical trades and professional disciplines from planning to painting.
Writ large, the construction industry itself is similarly fragmented and complex. It is also a sector with a reputation for ingrained conservatism, where progress is prey to rigidly traditional ways of working, contractual conflict, stagnant productivity, supply bottlenecks, and shortages of skills and labour, compounded by negative perceptions of male dominance and unattractive working conditions.
As if overcoming those problems were not enough, amid the global climate emergency, the industry must shrink an outsized carbon boot-print and curb its gargantuan appetite for finite natural resources. And yet, there is a dearth of data on the built environment and the lifecycle performance of buildings to inform and guide the radical change required.
If the challenge is colossal, so is the prize for the industry’s innovators and the growing contingent of tech start-ups and entrepreneurs turning their attention to construction. Contech (construction technology) is still a poor relation of Proptech, let alone high-rolling Fintech.1 Yet in 2022, when both those segments contracted sharply amid a general downturn, investment in construction-focussed technologies remained solid at (its admittedly far lower level) just under $5 billion.2
Cement giant cum venture capitalist Cemex expects Contech to remain resilient through tougher macroeconomic conditions because, in technological terms, this is still an emerging sector and a less crowded marketplace. Brimming with
opportunities for innovators, the construction industry is awash with old and urgent problems to solve.
Much of the Contech investment of recent years has been channelled into technologies that promise to boost productivity. For decades, annual labour productivity in construction has lagged – both the global economy and most national economies. Construction eked out 1% compared with a 2.2% global rate, and 3.6% for manufacturing, McKinsey reported back in 2017.3
As well as stubbornly sluggish productivity, innovators are rising to the challenge of modernising and greening construction, and streamlining its supply chain. We survey some of the main challenges and these technological trends below:
- Digitalisation, modelling and twins
- The supply chain
- Automation and robots
- Sustainability and materials
From digital design to twinning
Digitalisation is disrupting every industry to varying degrees. In the highly fragmented construction sector, which has been slow to modernise, the need and scope for digital change is vast. Most companies and countries have much to gain from data-driven, tech-enabled connectivity.
Digital tools can help solve many persistent problems and contribute to better outcomes at every stage from pre-construction, through project delivery to operation and maintenance of the completed asset. Potentially transformative change has begun. From Building Information Modelling (BIM) to robotics, drones to wearable tech, new and developing technologies are changing construction both on- and off-site.
These innovations also include virtual and augmented reality, which can extend BIM and improve design and visualisation. Virtual reality (VR), for instance, allows architects, engineers, contractors, and clients to walk through a building design
in 3D. At the workface, augmented reality (AR) software can overlay real-time information and instructions. Both uses enhance collaboration and help avoid conflicts and errors. Health and safety and technical training are among the technology’s other applications.
The sector has led the commercial adoption of drones, mainly for surveying sites and inspecting hard-to-reach or dangerous areas. Wearable devices also enhance safety. Fitted in smart helmets or other PPE, sensors for proximity can alert the wearer and/or mobile plant operators to prevent collisions, or generate other useful data (such as temperature as well as location and motion).
Project managers increasingly rely on a suite of software solutions to support them in functions such as planning, estimating, scheduling, cost control and tracking progress against programme on interactive dashboards showing real-time intelligence.
But the digitalisation of the design process is arguably the most fundamental modernisation of construction practice (not least because it will enable further waves of change and connectivity). As the power and cost of IT processing tumbled in the early 2000s, the switch from 2D computer-aided design (CAD) to 3D digital models gathered pace, to the point where BIM entered the mainstream in most developed countries at least on larger projects.
Using BIM, design becomes a digital rehearsal for constructing the asset in the real world. Designers, contractors, clients and other project stakeholders can visualise the project and better understand the design. Model software can detect clashes between physical elements. Drawings and schedules are seamlessly updated to reflect changes. As well as geometric data, models can hold information related to
materials, manufacture, fire or acoustic performance, installation sequences and link to specifications or other supporting documentation. When properly applied and governed on projects, this information can be shared by all parties at the same time in a common data environment (CDE) so collaboration is easier and faster.
BIM adoption is growing worldwide as construction professionals and clients recognise the benefits in efficiency and collaboration. Governments in many countries – from
the UK and Middle East to the US and Australia – have also mandated BIM for publicly funded projects.
Yet, sophisticated though BIM models are, the value of digital modelling can extend further – beyond the design and construction phases to operations, and thus the whole lifecycle of built assets, or even more widely to entire cities or countries. Such a model becomes a true ‘digital twin’ when it is connected to the physical world – live and integrated. Each corresponding element is dynamically linked via sensors that relay construction, engineering and operational data. As well as improving design, digital twins can verify an asset’s as-built status and current condition, run ‘what if’ scenarios, and simulate future works.
BIM models built to the UK’s Stage 2 standard are connected to static data, provided by documents, drawings and asset management systems. As twins are developed further, they increase in complexity and connectivity. Real-time data from sensors and the Internet of Things (IoT) helps increase operational efficiency. Two-way data integration and interaction allows remote operation. Ultimately, operations and maintenance can become autonomous, with total transparency and oversight of this self-governance.
So far, digital twinning has been mostly associated with the fourth industrial revolution in manufacturing. First came steam power, then electricity, followed by the microchip, and now Industry 4.0 – a fusion of advanced technologies, including the IoT, robotics, Big Data, artificial intelligence (AI), machine learning (ML) and autonomous vehicles.
Manufacturers can use the technology to simulate and streamline a production process, or an entire smart factory, getting products to market sooner and saving production costs. The global market for digital twins is set for exponential growth. One analysis predicts sales will grow, from about $7 billion in 2021, to reach $73.5 billion by 2027; 4 another $96.5 billion by 2029 – a compound annual growth rate of 40-60%.5 The main drivers will be manufacturing industries seeking to cut cost and improve supply chains, and the healthcare sector. But the construction industry can be expected to clamber on board, perhaps led by larger firms with deeper resources, and those committed to offsite prefabrication or specialising in facilities management.
A range of digital twin platforms – such as Siemens’ MindSphere, IBM’s Watson IoT, and GE Digital’s Predix – are designed to optimise management and operation, mostly of industrial assets. The 3DExperience platform of Dassault Systèmes caters for construction and engineering environments. Bentley Systems provides the AssetWise platform, also used for transportation infrastructure, along with sensemetrics for construction monitoring. In 2021 Autodesk Inc launched its cloud-based Tandem tool for project owners.
Siemens technology is used by ADMARES in offsite manufacturing of buildings. Drawing on its shipbuilding experience, the Finnish company utilises a complete digital twin of each project, whether an entire luxury floating villa or hospital room module. Its smart buildings are equipped with sensors to collect operational data.
Many live digital twins focus on what happens within buildings – optimising the flows of people in ‘smart airports’, like Atlanta, for example – or complex utility networks, such as the Los Angeles water supply.
As a concept, digital twins are sector-agnostic. Yet, some are concerned their contribution to construction will be stunted by its fragmented engineering disciplines as separate standards and supply chains develop for twinning applications in the industry and in the manufacturing sector. In the UK, the Institute of Engineering Technology is, with government backing, proposing a unifying framework to “unlock the benefits of digital twins between the manufacturing and built environment sectors, with the support of the technology sector”.6
The resultant Apollo Protocol and forum (taking their names from NASA’s pioneering ‘mirrored system’ for rescuing the 1960s Apollo 13 mission) are sponsored by various bodies, including Innovate UK and the industry’s
Construction Leadership Council. The aim is to identify a combined strategic direction and language for digital twins in manufacturing and the built environment. This is seen as essential to ensure that digital twins are interoperable as products come out of manufacturing and into the operational phase. It is by filling in the gaps in BIM and GIS data systems, and overcoming construction’s piecemeal approach to data management, that the technology can help optimise supply chains, the construction process and buildings’ whole-life performance, while also advancing environmental sustainability and the circular economy.
Decarbonisation is an urgent and daunting necessity given that the built environment is responsible for 40% of all carbon emissions and nearly 15% of particulates in urban areas.7 The problem lies not only with legacy stock. New buildings often use as much as double the energy predicted, and building systems tend not to be actively monitored.
Digital twins can enable better management decision-making based on hard data and predictive ML algorithms. Data sources include building systems (heating, ventilation, air conditioning, lighting, etc), sensors (for temperature, humidity, air quality, occupancy), maintenance schedules and equipment usage, and weather readings and forecasts.
The deep retrofits required for carbon net zero (and more sustainable resource management) would also be supported by twins that take account of resource usage, products’ performance data and footprint, and the re-use, recycling and re-
purposing of building components across the supply chain at the end of their first life.
These environmental and efficiency gains can be reaped at a higher level than an individual building or network. Digital twins for cities from Damascus and Jaipur to Wellington and Glasgow are at various stages of development or sophistication. Chicago-based CityZenith is crowdfunding investment to build urban digital twins that would help decarbonise the world’s most polluting cities. Having worked with
several cities, the company is modelling a downtown district of Los Angeles as part of the US Department of Energy’s Better Buildings Challenge.8
Densely populated and vulnerable to rising sea levels, the island state of Singapore boasts probably the most impressive digital doppelganger.9 This national twin supports policy formulation, planning, operation and risk management across many government agencies and functions such as property development, transportation and energy. The next stage, 3D mapping of underground utility services, is now underway.
Interoperability will be crucial as more countries invest in national ecosystems of connected digital twins. In the UK, where the groundwork for a national digital twin began in 2017, the National Infrastructure Commission calculated that some £7 billion in annual benefits – equivalent to 25% of total infrastructure spend – could be released by collecting the right data, setting standards and sharing data securely for the public good.10
While there is growing recognition of the benefits at the level of individual buildings and infrastructure projects and networks, the hurdles to adoption are also high.
Apart from the up-front cost and data management challenges, the construction industry must harness its many stakeholders and specialised multi-disciplinary skills to exploit the full potential of digital twins.
Skills gaps make space for machines
In addition to its economic and societal significance, the construction sector is a major employer. However, chronic labour and skills shortages are hampering activity, especially in developed nations.
FIEC, the European Construction Industry Federation, has been warning of growing skills shortages since at least 2019. In the UK, Brexit has compounded the problem by curtailing the supply of foreign workers. A record number of British civil engineering contractors reported recruitment difficulties at the end of 2022: skilled operatives were in short supply for 75% of firms, while 63% struggled to find lower-skilled labour. Industry leaders warned that its persistent skills gaps over many years had reached alarming proportions.11 Even as the UK economy faced recession, the Construction Skills Network predicted the industry would need 225,000 extra workers by 2027.12
Globally, many claims and disputes on major construction and engineering projects, which end up overrunning and over budget, can be traced to the level of skills and experience of personnel, and related problems, such as poor
workmanship. Some regions are more badly affected than others. Deficient quality of work is the fourth most prevalent cause of project distress in North America and in Europe, where lack of skill/experience is also a top-ten factor.13
Nearly half of European construction firms (45%) have had to limit their operations due to labour shortages, a global investor in construction technology stated in 2022.14 Similar shortages are playing out in the UK, US and Asia.
In most developed countries the construction workforce is ageing, while other sectors have greater appeal to younger generations. Robots too would seem better suited to indoor, controlled environments than muddy and ever-changing building sites. But a growing contingent of developers and tech start-ups believe automation can alleviate multiple problems, from labour and skills shortages to low productivity and inconsistent quality. Progress in areas like robotics, modular construction and 3D printing could provide some solutions.
The safety rationale for automating hazardous work such as demolition with remote-controlled excavators in certain circumstances is well established.
Operating earthmoving equipment in autonomous mode is also feasible on very large schemes.
Automating arduous manual tasks on site is trickier. Bricklaying, for example, requires skill and experience. The pioneering SAM100 – Semi Automatic Mason, effectively a cobot, or collaborative robot – has been working alongside American bricklaying crews for almost 10 years. By lifting and placing blocks, the system can cut labour by 50%, increase output by a factor of 3-5, and free skilled workers to concentrate on quality, according to Construction Robotics. The New York-based company has also developed MULE (Material Unit Lift Enhancer), a system for heavier blocks that can be quickly set up on scaffolds.
More recently in the UK, the Automated Bricklaying Robot built its first house – in 2020 – and is now in field trials. Construction Automation’s ABLR uses a 9m vertical lifting frame that sits on a bogie, mounted on a track around the house perimeter. Its control system follows the architect’s digitised plans.
Hailing from Australia, Hadrian is a truck-mounted blocklaying system. It uses a telescopic arm with patented dynamic stabilising technology to build structures to a 3D CAD model. 15 FBR designed and developed its own blocks and adhesive for its ‘fast-brick wall system’ – laying up to the equivalent of 1,000 standard bricks per hour. In 2021 HBR imported larger Weinberger clay blocks and mortar for a test build ahead of a proposed European pilot programme. More recently, Hadrian has demonstrated its ability to lay blocks autonomously.16 HBR has joined forces with Germany’s Liebherr group to manufacture and commercialise the system.17
Technical advances are also being made in 3D printing structures that would not have been viable just a few years ago. Operating under computerised control, these machines extrude specialised concrete in layers without formwork. Building with additive manufacturing also means non-standard shapes are possible.
Also in 2021, the Dutch city of Eindhoven showcased the technology’s possibilities with Project Milestone, said to the world’s first commercial housing project based on 3D-concrete printing.18
Now Irish start-up and Cobod partner Harcourt Technologies (HTL.Tech) has obtained building control approval for the UK’s first 3D-printed social housing development. The company has been conducting R&D to scale up the technology at the nearby Accrington & Rossendale College, where it launched the first UK training course in 3D printing for construction.
US-based ICON’s latest and largest 3D printing project is a community of 100 homes, again in Texas. Its third-generation Vulcan unit can construct a single-storey home of up to 3,000 square feet. A portable Magma mixing unit prepares ICON’s proprietary building material, Lavacrete. A fleet of the robots are constructing energy-efficient three/four-bedroom houses in Georgetown with national housebuilder Lennar Corporation. ICON is also collaborating with NASA on the Olympus Project to build structures on the moon with additive manufacturing.
Back on earth, housing under-supply in many national markets is driving demand for more efficient and cost-effective construction methods. Before they can build in volume, both robotics and additive manufacturing must overcome not only construction’s conservatism, but also higher up-front costs for set-up and specialist materials. Their proponents promise savings – 30% in labour, 50% time and 60% in waste, according to HTL. Ultimately cost will determine whether robots and 3D printers become mainstream housebuilders – and how they compete with offsite, modular fabrication.
Industry 4.0 technologies, already transforming manufacturing in smart factories, can also churn out parts and modules for buildings. In Hamburg, Aeditive is using KUKA robots to make reinforced concrete components such as bridge beams.
Siemens digital twin technology and robotics are also employed by Finland’s ADMARES, which is industrialising the manufacturing of buildings from homes to hotels.
Meanwhile, other manual construction tasks are being mechanised on-site.
Developed by Pennsylvania-based Advanced Construction Robotics, the TyBOT automates the task of hand-tying reinforcement bars, achieving 1,000 ties in one hour.19 The productivity gains rise as the areas to be concreted increase beyond 25,000 square feet. Carrying and placing the rebar is the next task. ARC plans to bring the IronBOT to the North American market in 2023.
Robotics may have an even greater impact by streamlining less physically onerous jobs. Wider digitalisation is opening up opportunities for data-driven machines in other roles. The design data from BIM digital models, for example, can also guide automated inspections or measuring out.
Laying out the floor for a new building is a time-consuming, skilled job. After downloading BIM data, the robot FieldPrinter can print a full-scale model on the concrete surface with 1mm accuracy. California’s Dusty Robotics claims it is up to 10 times faster than a manual crew chalking lines and drastically reduces re-work by highlighting installation errors sooner.
ShapeIn 2022 international contractor BAM Nuttall trialled a four-legged, remote- controlled robot fitted with a 3D laser scanner to collect data and create records on a large and remote construction site in Shetland. The test required the creation of a private telecoms network across the area of more than 55,000m² as part of a government-funded 5G testbed programme. Controlled from hundreds of miles away, Spot was able to collect and transmit reliable, repeatable data.20
Spot can also be used to monitor progress on site, compare as-built conditions with BIM models, and create a digital twin – as at London’s Battersea Power Station development and on the Foster + Partners campus.21 Robotics specialist Boston Dynamics created Spot. Its scanner is from Trimble, which builds autonomous systems for earthmoving and demolition plant and
other industries. Confident the technology will be unleashed on future sites, Liverpool John Moores University UK invested £150,000 in its own Spot, partly to attract a new generation of student engineering surveyors.22
Robots equipped with cameras and sensors, often developed for inspecting industrial storage tanks, vessels and other confined spaces, are being deployed in drainage systems, tunnels and other infrastructure, such as dams. 23 Recent leaps in drone technology and AI extend their reach and value to high-level structures such as bridges and to tasks such as real-time analysis and decision-making.
Project management is another critical data-driven activity and even more dependent on timely analysis. Contech is harnessing computer vision and AI to automate and streamline project schedules by constantly tracking the progress of works. Germany’s oculai and Israel’s Constru, for example, offer
cameras and apps that identify delays and discrepancies in completing tasks. Integrated with planning platforms, they aim to help managers get projects quickly back on track before problems fester.
As AI and deep learning algorithms, computer vision and other technologies converge with robotics, other possibilities open up. This is how Canada’s Waste Robotics automates recycling of construction and demolition waste. It claims to achieve purity of 95%, separating multiple materials – from plastics to different types of wood – with no labour, enabling smaller, more precise, safer and more profitable materials recycling facilities, including several in France.
Converging technologies also have the potential to challenge construction’s other conventional wisdoms. Modern tunnelling, for example, involves huge and sophisticated tunnel boring machines on major transport infrastructure projects, but otherwise methods have changed little in a century. Hypertunnel, a UK
start-up supported by the European Innovation Council’s accelerate scheme and backed by construction group Vinci, is promoting a radically different approach to tunnelling involving horizontal drilling, AI, and 3D printing.24
The concept involves injecting the lining of the tunnel into the ground and then removing the waste. As the work is carried out through the entire length at once, not just the face, the timescale is reduced greatly. This approach exploits techniques proven in other industries –digital underground surveying, digital twins, ML, 3D printing, robotics (small tractor and mortaring bots) and swarm techniques – as well as a remote-controlled excavator, supported by AI and VR. A small tunnel has been completed ahead of a full-scale trial planned for 2023.25 The UK’s Network Rail is interested in the technology for tunnel repairs.
Construction’s advantage as a late starter may be to climb the digital learning curve faster and achieve new breakthroughs on the back of lessons from more advanced sectors.
Streamlining the supply chain
Highly disruptive though the COVID pandemic was, it delivered just the first in a series of sharp shocks to supply chains. The bounce-back in global demand, limited shipping and container capacity, higher freight costs, bottlenecks in the Suez Canal and major ports, the war-induced energy crisis, materials shortages, delivery delays, resurgent inflation … the impacts continue to reverberate, not least across the construction sector.
Long and complex supply chains serving a fragmented industry are prone to inefficiencies. These can arise at each stage of a construction project from design – when hundreds if not thousands of materials are specified – through procurement planning, sourcing, dispatch, delivery, storage and handling on-site, installation and maintenance.
The strains on contractors and suppliers is only increasing with the imperatives of decarbonisation and more sustainable circular resource management.
Streamlining and greening procurement poses significant challenges and opportunities. Construction companies, typically operating on thin margins, have a lot to gain from making their supply chains easier to manage and more cost- effective. ConTech innovators are trying to help by filling the gaps. Some are also joining the dots between construction, alternative materials (see Sustainability below) and waste, closing the loop so the supply chain becomes sustainable.
Construction is learning from lean manufacturing and its just-in-time delivery strategy by building a kit of parts in factories for assembly on-site. National and state governments from UK and Dubai to Australia have begun encouraging these modern methods of construction as a way of increasing the industry’s productivity while overcoming shortages of skilled labour and housing.
Other construction markets can benefit from pre-fabrication, including infrastructure. One of the UK’s offsite pioneers, Laing O’Rourke, has developed a ‘product-led design’ modular bridge system. The structure’s preliminary design is based on these products, and the detailed design is developed by an automated digital bridge configurator to provide the complete engineering solution.26 A ‘kit of parts’ caters for various designs – steel beams, bearings, multi-span bridges, and standalone elements in larger schemes such as piers, retaining walls and box- structure sections.
Contractors can invest in their own off-site factories, and more companies are adopting this business model, targeting markets from housing to hospitals and hotels (see Robotics). However, design, manufacturing and construction need to be joined up to accelerate the shift away from traditional methods.
London-based Contech start-up KOPE claims to be the first purpose-built software platform for offsite. Launched in 2020, its AI-powered software is used globally by contractors, manufacturers, and modular housebuilders, enabling the design, specification and procurement of offsite products and systems. In July 2022 KOPE secured £1.7 million in a seed funding round from some high-profile investors, including Goldman Sachs and UK offsite specialist Ilke Homes.27
Investors recognise the opportunities presented by digitalisation of the construction supply chain. Another example, from 2021, was the £120 million stake by Rothschild & Co’s European private equity arm in Causeway.28 The provider of enterprise and cloud software solutions says its enhanced platform will connect the construction ecosystem and help solve the productivity problems that arise with complex supply chains and transient construction projects.
Cement and concrete companies are the construction industry’s masters of just-in-time supply chains. It is significant therefore that global giant CEMEX has invested in some of the many Contech start-ups targeting the industry’s procurement and logistics. Based in London, Voyage Control is building an ‘air
traffic control’ system to manage all of a site’s deliveries, optimise usage of cranes and hoists, allow suppliers to book slots, eliminate queuing, and provide real-time updates all via one platform. CEMEX has also participated in a funding round for GoFor Delivers, a Canadian outfit offering on-demand delivery of construction materials.
It seems that software platforms are queuing up to digitalise supply chains.
Drawing up a bill of materials (BOM) for construction projects is a complex, error- prone process. Typically, 15% of materials are wasted while 20% of labour costs are consumed by materials handling. Globally, this is a $ 1 trillion loss, according to US software-as-a-service (SaaS) provider AECInspire. It uses AI to automatically generate a BOM, maximising prefabrication opportunities with national suppliers. Contractors can more easily manage price volatility and acute skilled labour shortages, while slashing waste due to mistakes and over-ordering.
Other US examples are Los Angeles-based The BuildClub, which acts as a ‘one- stop shop’, for all building materials, with same-day delivery, and Materially, which specialises in aggregates, asphalt and other heavy materials, connecting buyers, suppliers and hauliers.
In Germany, bobbie is an e-commerce store for building materials. The platform shows availability in real time, and supports users with specification matching, invoicing, and logistics. It claims to be able to process and price any tender format, providing a lean procurement platform and marketplace for contractors and manufacturers.
Another German start-up, CATHAGO has won several awards for its procurement app for materials, tools and equipment. Again, the aim is to streamline procurement, digitalise the entire process and ensure real-time transparency for all parties with constantly updated price conditions, workflow management, delivery calendars and standardised, digital delivery bills.
Similarly, comstruct allows German contractors and their materials suppliers to share information in one channel. The platform connects with BIM and planning software, obviates the need for multiple paper records, and can automatically check invoices against delivery notes. Reporting is easier and can include carbon footprint calculations.
Real-time visibility is increasingly recognised as critical to efficient supply chain management, driving demand across industries. The Sixfold platform
developed by Transporeon in the UK integrates transport management systems, truck telematics and mapping data. It also uses AI to predict problems through companies’ European supply chains. Building material and insulation providers such as Kingspan, Knauf and Saint Gobain use the data to improve operational efficiency through modules for real-time yard management or dock scheduling. Freight-matching services and autonomous procurement are also offered to improve margins, while another module reports carbon emissions.29
Carbon reporting is becoming an increasingly valuable feature as project owners, main contractors and other stakeholders focus more on Scope 3 carbon emissions, as the footprint of many organisations is heaviest in their supply chains.
Contractors do not currently have the tools to reconcile their multiple challenges – tracking carbon impact, complying with regulatory obligations, buying recycled or alternative materials, while also controlling costs and on-time deliveries, according to Rockease. The French company claims to do this for the European aggregates supply chain, and includes home-grown global construction giants Vinci and Bouyges among its clients.
More start-ups are emerging to digitalise these tasks in various regional markets and for different resources in construction’s supply chain.
In Argentina, NUQLEA claimed to be the first digital platform to unite the construction industry’s supply and demand ecosystem. From Ecuador, Construex hosts a SaaS construction marketplace for Latin America.
The spike in energy prices and the direct relationship between transport fuel consumption and environmental impacts are driving the need for smarter tech management and reporting solutions. Apart from aggregates and materials, start- ups are also targeting construction supply chain challenges with machinery and labour.
Internal processes for managing plant and equipment are broken in many German construction firms and rental companies, according to Flexcavo. It digitises and automates workflows to reduce fleet management costs over the assets’ lifecycle with the help of manufacturer-independent telematics. The Berlin-based start-up was acquired by global IoT service company Trackunit of Denmark early in 2023. 30
Amid acute skills shortages in many national construction industries, tech platforms are also offering their services to match people and job openings – from quantity surveyors and engineers (eg, Dubai-based Constal) to general labour and skilled craftspeople (Canada’s Faber).
As governments commit to achieving carbon neutrality by 2050, regulatory pressures are reinforcing the financial incentives to optimise supply chains. The circular economy principle is influencing product design too in all industries and gaining ground in materials for construction and roadbuilding (see Sustainability).
Constructing a circular industry
A bellwether and buttress of national economies, construction also makes an outsized contribution to climate change. Responsible for 10% of Europe’s GDP, the sector generates around 40% of the EU’s greenhouse gas emissions (as well as a third of all waste, while consuming half of extracted natural resources).31
Regulators have prioritized carbon-intensive energy-intensive industries, including materials producers, through the EU Emissions Trading Scheme. Systems for heating and ventilation buildings, and their insulation, are next. The Energy Performance of Buildings Directive will require all new-build to be zero-emission by 2028.32
However, pressure is growing for action to curb the built environment’s embodied carbon too – in the UK33 and Europe-wide.34 As buildings become more energy-efficient and are powered by renewables, the problem of embedded emissions will dominate.
While 36% of emissions emanate from buildings, 10-20% arise from production of building materials, and the process of construction, renovation and demolition. In Denmark, where the built environment is more energy-efficient, up to 75% of buildings’ CO2 emissions are embodied emissions.35
Some states are addressing the whole-life carbon impact of all materials and equipment used in a building. France, which has a comparatively low-carbon electricity system thanks to nuclear power, led the way with Environmental Regulation RE2020, which came into force in 2022.36 Only four other countries – Sweden, Denmark, Finland and the Netherlands – are so far proposing to regulate the entire footprint, embodied as well as operational carbon.
Apart from harmonisation of standards, there is also a need to level the playing field on materials imports. As Europe’s ETS bears down on domestic producers, the EU is introducing a carbon border tax on goods from outside the bloc. The European Carbon Border Mechanism is more ambitious than initially proposed, given the need to achieve the EU’s challenging 55% target for cutting emissions by 2030.37 The UK, which is promising steelmakers financial support to save jobs, is also considering an equivalent levy on imported steel.38
Concrete and steel are among the world’s most energy-intensive industries and most challenging to decarbonise. The most widely used man-made material, concrete is responsible for 8% of global emissions.39
The notion of sustainable concrete has, within a few years, come closer if not yet hard reality. Developments range from using alternative energy to making concrete cement-free.
Forty of the biggest cement and concrete producers worldwide committed in 2021 to accelerate their decarbonisation, with a further cut of 25% in emissions by 2030.40 The group says they are on track to reach net zero concrete by 2050. After efficiencies, and savings in producing and substituting cement and clinker, their roadmap relies on viable carbon capture and storage (CCS) to contribute more than a third.
Green hydrogen (produced with renewable electricity) is seen as the most likely alternative fuel for energy-intensive industries like cement production.
Hanson Cement, part of the Heidelberg Group, is investing in CCS and aims to produce net zero cement by 2030. It claimed a world first in 2021 by
demonstrating, in a UK government trial at its Lancashire plant, that hydrogen could replace fossil fuels, when used in combination with by-products from the rendering and biodiesel industries.41
ShapeThe holy grail for ‘climate tech’ is to turn captured carbon into a valuable resource.42 Canada’s Carbon Upcycling technology locks CO2 permanently inside additives made using local industrial waste or natural materials, and also reduces the amount of cement required in concrete.
Energy Transition Fuels is a London start-up developing sites in Spain and Finland where it will use an electrolyser powered by solar or wind power to manufacture a green fuel, e-methanol, from liquified CO2. Mexican cement giant Cemex has teamed up with ET Fuels with the aim of processing 450,000t of carbon from its Alicante cement plant.43
Cemex had substituted 34% of fossil fuels in its European clinker and cement plants with hydrogen by September 2022, aiming for a 47% cut in CO2 emissions by 2030.44The corporation has also invested in WtEnergy, a Spanish energy start- up that will produce syngas (a mixture of hydrogen and carbon monoxide) from non-recyclable waste. Syngas may also be refined to provide pure hydrogen or biomethane.45
Various Contech developers are trying to accelerate the innovation cycle for green concrete. Mixteresting is a software tool that uses AI to propose new concrete mix designs with a single click.
Waste materials are very much in the mix. Low-carbon concrete can comprise up to 90% of ground granulated blast furnace slag. Contractor Tarmac achieved a 62% reduction in equivalent carbon (CO2e) per cubic metre of concrete on the UK’s high-speed rail (HS2) project, forming the slab and walls of a storage building.46
Concrete can even be carbon-negative. Patented by CBC (Carbon Capture Buildings) Greentech, TimberRoc comprises 82% wood fibre from sustainably managed, local French forests. Designed for prefabricated load-bearing walls and slabs (and for RE2020), the ‘biosourced material’ offers high performance in terms of thermal and acoustic insulation, humidity and stability.
An industrial trial started in February 2023 for ‘the world’s first zero-carbon Portland cement’ (as opposed to ‘net zero’ after tree-planting or other carbon offsets).47 Cambridge Electric Cement uses cement recovered from construction and demolition waste. In the form of a paste, it replaces lime-flux when recycling steel in an electric arc furnace (powered by renewables).48 The by-product, when cooled and ground, is Portland clinker, which is blended to give zero-carbon cement. Clinker production in high-temperature kilns accounts for half of cement’s carbon footprint. The two-year trial is funded by Cement 2 Zero, part of a UK government innovation programme for concrete and steel.
The steel industry is also decarbonising. Just 553 steel plants worldwide are responsible for 9% of all CO2 emissions, mainly due to the coking coal and other fossil fuels used to make the alloy. Demand is expected to grow by a third through to 2050.49
Using hydrogen, Tata Steel says its output will be carbon-neutral by 2045. It is accelerating decarbonisation in the Netherlands with direct reduced iron (DRI) technology (aka sponge iron) to achieve a 35-40% reduction by 2030, and 30% in the UK.
Carbon-free steel is already feasible. In 2021 a Swedish joint venture proved its HYBRIT technology could replace fossil fuels with green hydrogen both in the making of sponge iron pellets and in oxygen removal before steel slabs are
produced.50 Sweden, which has abundant green electricity and high-quality iron ore, is also home to H2Steel. It promises industrial-scale production of green steel from 2025, reaching a capacity of 5 million tonnes by 2030. Again, green hydrogen will fuel its direct reduction reactors, produced on site by an electrolyser.51 The EU is also backing the H2Steel project to decarbonise steel production using biowaste streams.52
Carbon taxes can make green steel competitive pending falls in the costs of green electricity and hydrogen. In the interim, energy and carbon savings can come from substituting wood materials for cement, bricks or steel. For example, larch cladding produces an energy saving of 24% compared to bricks.53 A 2022 UK study found panelised timber walls embodied 82% lower carbon emissions than traditional masonry, when transport, energy use on site and sequestration were also taken into account.54
Innovation is essential to develop low-carbon alternatives across construction’s vast palette of materials. Sheet glass was produced using hydrogen rather than fossil gas for the first time in the UK, if not the world, by Pilkington in 2021.55
If construction is to be circular, vast quantities of materials need a new life. EU legislation now requires 70% of all construction and demolition waste to be recycled, with zero going to landfill.
The K-BRIQ is a new brick comprising 90% recycled construction waste. Low- carbon, it is produced without high-temperature firing or virgin cement, and little clay. Kenoteq, a spin-off from Scotland’s Heriot-Watt University, has patented the product in the UK (Europe’s biggest brick market) and the US, ahead of commercial production in 2023.
On highway works, Skanska is rolling out a new reinforced concrete solution without steel or cement. It uses Bastech – basalt fibre reinforced polymer rebar – and a low-carbon mix incorporating an alkali-activated cementitious alternative material.56 Advances in asphalt technology have also enabled cold-lay mixes, increased recycling of road planings, and replaced quarried stone with various waste materials, from furnace slag and crushed concrete to crumbed tyre rubber and plastics.57
Innovation must continue apace, across the board from energy use to alternative materials if construction is to enable sustainable development. An ostrich-like stance is untenable when even sand extraction approaches its limits.58 Materials manufacturer Sika is working with France’s ADEME to explore the use of recycled concrete waste on an industrial scale for mortars as well as in new concrete. The aim is to reduce the extraction of natural silica sand. Sika has also developed Parnatur, a sprayable facade mortar based on hemp rather than cement.59
Holcim is another materials giant championing ‘urban mining’ – exploiting the massive amounts of construction and demolition waste generated each year; in Europe alone, some 850 million tonnes in 2020. Using concrete reclaimed in this way, Holcim produced ‘the world’s first clinker made entirely from recycled minerals’ at its Altkirch plant in France.60
ShapeSecondary markets already exist for reclaimed materials and many of construction’s waste streams, but they tend to be local and lack efficiency. In Denmark, one of the most advanced countries in terms of sustainable construction, buildings in the future will have to be systematically dismantled at the end of their lifecycle so their materials can be reused. Several of its major demolition contractors have signed up to the GreenDozer platform, an online marketplace for reclaimed materials and surplus product from building projects.
Circular construction should also be facilitated by Contech platforms like Madaster, an online library of materials and products used in the built environment. Operating in several European countries, it provides data on embedded carbon and re-usability.
The challenge for Contech and the construction supply chain is to scale these urban mining activities and markets efficiently. This will depend not only on financial and regulatory pressures, but also buy-in from client architects and other product specifiers.
Conclusion
Slow out of the blocks, the construction industry is changing but must play catch-up in the race to net zero through digitalisation and technology adoption. The stakes are high and the challenges daunting – raising historically low productivity, increasing efficiency, streamlining supply chains, overcoming staff shortages, transforming resource management.
Big players like UK contractor Balfour Beatty are confident that digital technologies – including offsite manufacturing and robotics – can rapidly redefine the construction industry, solving many of its problems and generating savings in the whole-life running costs of infrastructure.61
The surge of innovations focussing on construction operations and their climate impacts is a positive trend. This will need to be sustained, and Contech applications widely adopted. Cemex Ventures notes that the US, Nordic countries and Israel so far are generating more new technological solutions than other parts of Europe. On top of its chronic shortages of traditional skills, this is just an additional risk for the industry as it competes to attract the digital talent that will steer its reinvention.
Authors
Joana Palha
Senior Manager, R&D Tax Incentives, Ayming UK
With a background in Civil Engineering and a member of the Association of Taxation Technicians (ATT), Joana has over seven years of experience working in R&D tax incentives, helping businesses to innovate and grow. She currently manages the innovation funding process for a range of SMEs and Large Companies within the construction and civil engineering sector, helping them to maximise and deliver R&D claims. This includes some of the largest construction and engineering companies in the UK.
Flora Cherry
Assistant Manager, R&D Tax Incentives, Ayming UK
Flora is an Assistant Manager within the R&D team, leading and supporting tax claims for a range of SME and Large Companies within the Construction industry. Flora has a Masters in Civils Engineering with Architecture. She joined Ayming just under three years’ ago, following five years’ experience working for a London-based structural engineering consultancy. She has extensive experience in civil and structural engineering design, having worked on a large range of commercial and residential projects including Westfield London, Embassy Gardens, and Cherry Park.
Grant Loescher
Consultant, R&D Tax Incentives, Ayming UK
Grant works in Ayming’s R&D Tax incentives team and works with a variety of clients in the Construction and Building Materials sectors. He has a background in geochemical carbon sequestration and the administration of lands and minerals for the United States government.
1 The application of digital and platform technologies to the property / real estate industries is known as Proptech, while Fintech applies to financial services.
2 https://www.cemexventures.com/top-50-2023-industry-insights/
3 https://www.mckinsey.com/capabilities/operations/our-insights/improving-construction-productivity
4 https://www.marketsandmarkets.com/Market-Reports/digital-twin-market-225269522.html
5 https://www.fortunebusinessinsights.com/digital-twin-market-106246
6 https://www.theiet.org/impact-society/factfiles/built-environment-factfiles/the-apollo-protocol- unifying-digital-twins-across-sectors/
7 Seizing the decarbonization opportunity in construction, McKinsey, July 2021.
8 https://www.smartcitiesdive.com/news/los-angeles-cityzenith-digital-twin-building-decarbonization/624878/
9 https://www.gim-international.com/content/article/singapore-s-journey-towards-a-nationwide-digital-twin
10 Data for the Public Good, 2017
11 https://www.newcivilengineer.com/latest/industry-warns-that-lack-of-skilled-workers-is-holding-back-uk-infrastructure-15-11-2022/
12 https://demolition-nfdc.com/news/industry/citb-release-construction-skills-network-csn-2023-27-uk-report/
13 https://www.hka.com/crux-insight-fifth-edition-battling-the-headwinds/
14 https://sifted.eu/articles/werk-construction-hiring-preseed/
15 https://www.fbr.com.au/view/hadrian-x
16 https://www.theconstructionindex.co.uk/news/view/robot-brickie-works-autonomously
17 https://www.theconstructionindex.co.uk/news/view/brick-laying-robot-to-get-input-from-liebherr
18 https://ww3.rics.org/uk/en/modus/built-environment/construction/3d-printed-homes—how-concrete-went-digital.html
19 https://www.constructionrobots.com/
20 https://constructionmanagement.co.uk/bam-nuttalls-robot-dog-collects-data-on-remote-shetlands-site/
21 https://www.constructionenquirer.com/2020/11/12/four-legged-robot-spot-to-be-project-managers-best-friend/
22 https://www.theconstructionindex.co.uk/news/view/robot-dog-for-john-moores
23 https://invertrobotics.com/cases/exploring-new-worlds-successful-inspection-of-uncharted-drainage-network-of-hydro-dam/
24 https://www.theconstructionindex.co.uk/news/view/tunnel-vision-radical-new-approach-to-tunnelling
25 https://www.theconstructionindex.co.uk/news/view/hyperbots-complete-demonstration-tunnel
26 https://www.laingorourke.com/thinking/technology-and-innovation-spotlight-building-bridges/
27 https://buildindigital.com/london-contech-startup-kope-secures-1-7m-to-automate-offsite-construction/
28 https://www.uktechnews.info/2021/06/29/causeway-technologies-secures-120-million-growth-equity-from-rothschild-co/
29 https://sifted.eu/articles/top-supply-chain-startups/
30 https://www.prnewswire.co.uk/news-releases/trackunit-acquires- german-contractor-services-provider-flexcavo-301722682.html
31 https://ec.europa.eu/research-and-innovation/en/projects/success-stories/all/banking-construction-materials-eco-benefits
32 https://www.europarl.europa.eu/news/en/press-room/20230206IPR72112/energy-performance-of-buildings-climate-neutrality-by-2050
33 https://www.architectscan.org/embodiedcarbon
34 https://www.edie.net/eu-to-start-measuring-embodied-carbon-emissions-from-buildings/
35 https://www.euractiv.com/section/energy/opinion/the-eu-must-regulate-embodied-carbon-to-deliver-climate-proof-buildings/
36 https://www.interregeurope.eu/good-practices/environmental-regulation-2020-re2020
37 https://www.woodmac.com/news/Debut-of-the-first-EU-carbon-border-tax/
38 https://www.ft.com/content/94eab3e5-87dd-424f-9c5a-be0d79d7cb5c
39 https://www.bbc.co.uk/news/science-environment-46455844
40 https://gccassociation.org/wp-content/uploads/2023/01/GCCA-Roadmap-One-Year-On-Action-and-Progress.pdf
41 https://www.hanson.co.uk/en/news-and-events/world-first-net-zero-fuel-trial-success-at-ribblesdale
42 Climate tech is shorthand for innovative business models and technologies that mitigate climate change
43 https://www.theconstructionindex.co.uk/news/view/cemex-aims-to-turn-co2-into-green-fuel
44 https://www.theconstructionindex.co.uk/news/view/cemex-to-burn-hydrogen-in-its-mexican-cement-kilns
45 https://www.theconstructionindex.co.uk/news/view/cemex-buys-into-clean-energy-pioneer
46 https://newsblogsnew.ihbc.org.uk/?p=32803
47 https://www.constructionenquirer.com/2023/02/08/worlds-first-net-zero-cement-production-trial-starts/
48 http://www.eng.cam.ac.uk/news/cambridge-engineers-invent-world-s-first-zero-emissions-cement
49 https://www.forbes.com/sites/davidrvetter/2021/08/19/how-sweden-delivered-the-worlds-first-fossil-fuel-free- steel/?sh=5a3bdd446b55
50 https://www.hybritdevelopment.se/en/the-worlds-first-fossil-free-steel-ready-for-delivery/
51 https://www.h2greensteel.com/articles/on-course-for-large-scale-production-from-2025
52 https://h2steelproject.eu/the-project/
53 https://environment.ec.europa.eu/research-and-innovation/science-environment-policy_en
54 https://www.theconstructionindex.co.uk/news/view/study-highlights-carbon-benefits-of-building-with-timber
55 https://www.renewableenergymagazine.com/hydrogen/world-first-as-float-sheet-glass-fired-20210827
56 https://www.theconstructionindex.co.uk/news/view/skanskas-basalt-rebar-to-be-rolled-out
57 https://link.springer.com/article/10.1007/s11356-021-18245-0
58 https://www.sika.com/en/innovation/research-development/strategy/overcoming-material-shortage.html
59 https://www.sika.com/en/media/insights/sikanews/hemp-instead-of-cement.html
60 https://www.holcim.com/who-we-are/our-stories/what-is-urban-mining
61 https://www.balfourbeatty.com/how-we-work/public-policy/ahead-of-the-curve-innovation-and- productivity-in-construction/
