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What is the carbon footprint of the construction industry?

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The buildings and construction industry produces 14 billion tonnes of CO2 a year, which amounts to around 39% of global annual CO2 emissions. With such a major impact on worldwide carbon emissions, decarbonization of this industry is essential for our transition into a Net Zero future.

In this article, we discuss the scope of the industry’s emissions, the breakdown of where emissions come from, some of the pathways to successful decarbonization, and finally some encouraging actions by major built environment players in their Net Zero journeys.

Where do the emissions come from?

In the context of the buildings and construction industry, carbon emissions are produced from organizational operations and direct project development. Organizations produce a certain amount of emissions in the process of architecting, designing, engineering, and constructing buildings and infrastructure projects. Project emissions are those emissions that relate to the construction and operation of buildings and infrastructure projects.

The construction industry is the largest industrial consumer of raw materials each year. Large amounts of energy are used and emissions produced from processing raw materials, to building materials like steel, aluminum, and concrete. Energy is used in the operation of equipment to construct projects and direct emissions are produced in the operation of heavy vehicle machinery. Lastly, energy is used and direct emissions are produced in operating projects.

This makes the building and construction industry one of the largest emitters of carbon dioxide globally.

Pie chart of global CO2 emissions by sector, showing that construction is responsible for 39%.

What is the carbon emissions breakdown of a building or infrastructure project?

For construction and operation of a building or infrastructure project, carbon is emitted in the form of embodied carbon and operational carbon emissions.

Embodied carbon applies to the whole lifecycle of a building or piece of infrastructure, but is predominantly generated during the first phase of the life cycle. Materials and construction processes cause emissions, for example:

  • during the creation of steel, concrete, aluminum, and timber;

  • during the transporting of materials and equipment to sites; and

  • during the operation of machines, which use energy.

Thus, embodied carbon has to be calculated for the building/infrastructure project itself, and this calculation is based on potentially hundreds of individual calculations of the embodied carbon in each individual piece of material and all the associated processes, such as transportation and even maintenance over time.

Operational carbon emissions come from:

  • The operation of HVAC systems such as gas boilers;

  • Refrigerant emissions; and

  • Emissions from energy usage in operating lighting, equipment, and building systems.

These are simpler to calculate but exist over a long time period because, rather than being concentrated in the construction phase (as embodied carbon is), they are the energy and carbon emissions associated with operating the building or infrastructure project over its lifetime.

Overview of the two carbon types in buildings: embodied and operational carbon.

Overall, studies suggest that there is about 0.5 tonne/sqm of embodied carbon and 0.05 tonne/sqm/year of operational carbon in a new commercial tower. Most commercial towers in central business districts have gross floor areas of 30,000 to 100,000 sqm. This entails emissions of between 15,000 and 50,000 tonnes of embodied carbon, as well as a further 1,500 to 5,000 tonnes of operational carbon annually.

How can we transition the construction industry toward Net Zero?

Three steps are necessary for the buildings and construction industry to reach Net Zero under a Science-Based approach (see the SBTi website for more details on this):

  1. Measure your Scope 1, 2, and 3 emissions. The team at KlimaDAO and our partners in the carbon space have a wealth of experience in helping organizations with this.

  2. Reduce these emissions as far as possible. Your Scope 1 and Scope 2 emissions need to be taken to a residual level – that is, through technological innovation and a laser-guided focus on sustainability, the construction industry needs to reduce carbon emissions by 50% by 2030 to achieve Net Zero by 2050, in line with the climate goals of the Paris Agreement.

  3. Neutralize the emissions that are left. You can offset the residual Scope 1 and Scope 2 emissions with carbon credits to ensure you reach Net Zero. KlimaDAO can help companies to retire high-quality carbon credits with demonstrated additionality, permanence, and co-benefits.

A number of improvements are needed to reduce emissions. These include the following:

  • More sustainable building design and practices. This can involve the use of lower-emissions materials such as cross-laminated timber, which is a promising recent innovation for building framing and represents major reductions in carbon emissions compared to steel or aluminum frames.

  • Electrification of heat generation. This could involve the decommissioning of gas boilers in HVAC systems, replacing them with electric heat pumps to produce heat.

  • Better HVAC refrigerants, meaning an end to the use of harmful refrigerants that produce extremely damaging GHGs (many times more virulent than CO2).

  • Renewable energy production to operate buildings and infrastructure.

  • Better production of processed building materials.

  • Applying circular economy principles (i.e. reuse, recycle, redesign) in building design and construction.

A case study of the Quay Quarter Tower, highlighting efficient, low-carbon construction methods.

What are the biggest players doing in their Net Zero journey?

Major architecture firms, engineering consultants, construction contractors, and suppliers have developed and are committing to Net Zero strategies by 2030, with some already achieving carbon neutrality across their value chains.

  • Mott MacDonald – a global engineering consulting firm – reduced emissions and offset 30,000 tonnes and 19,000 tonnes in 2019 and 2020, respectively, to be certified PAS 2060 carbon neutral. They used carbon credits from the Sumatra Merang Peatland Project in Indonesia, which is a forestry-based, REDD+ project with community and biodiversity co-benefits. Similar projects, such as the Rimba Raya project in Indonesia, are available in the KlimaDAO ecosystem in the NBO pool.

  • Arcadis – a global engineering consulting firm – reduced emissions and offset 130,000 tonnes over 2020 to 2022 using carbon credits from the Keo Seima Wildlife Sanctuary in Cambodia. This project is a forestry-based, REDD+ project with community and biodiversity co-benefits, and credits from REDD and REDD+ projects are available in the BCT pool, as well as NBO, amongst other tokenized carbon pools.

  • Acciona – an infrastructure and renewable energy construction firm – has been carbon neutral since 2016 with 13.4 mega tonnes of CO2 avoided by renewable generation. This is similar to the Ghani Solar Power Project, whose offsets were used by the blockchain network Polygon in the summer of 2022 to become carbon neutral, retiring a total of 104,000 tonnes through the KlimaDAO carbon retirement aggregator.


The climate emergency demands that urgent action is taken to radically transform current unsustainable models of consumption, and the construction industry has a vital role to play in this response. With buildings currently responsible for 39% of global carbon emissions, decarbonizing the sector is one of the most effective ways to mitigate the worst effects of climate breakdown.

Reducing the embodied carbon in buildings and infrastructure to Net Zero requires a radical transition, and eliminating operational carbon emissions is a similarly large challenge. The retirement of verified carbon offsets such as those held in the KlimaDAO treasury is, of course, just one part of this. However, over the coming decades it is and will continue to be necessary for actors in the built environment space to purchase and retire offsets to channel capital to pro-planet projects such as those mentioned above.

If your organization is ready to become carbon neutral, our Klima Infinity suite gives you the tools to meet your goal. Get in touch today.

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