Green concrete market overview: A multi-billion-dollar opportunity, with Europe at the forefront
This article is part of our concrete series. Read the main article here. Keen to know more about technologies in this space? See this article.
While the global cement and concrete industry is vital for construction, it is a significant contributor to CO2e emissions. This is largely due to the transformation of limestone (CaCO3) to lime (CaO). Lime is the main ingredient of clinker, which gives the binder cement its strength but also leads to the direct release of CO2. Apart from direct CO2e emissions, clinker and cement production are generally energy-intensive processes. Clinker consumes about 945 kWh per tonne, of which 90% is currently fossil-based energy, and cement about 100 kWh per tonne. Nevertheless, cement and concrete are trillion-dollar market opportunities.
Globally, the concrete market was valued at $617B in 2020 and is projected to reach $972B by 2030, registering a CAGR of 4.7%. Generally, the concrete market can be divided into ready-mix concrete and precast concrete. Ready-mix concrete is a mixture of water, aggregates, and cement, which is delivered to construction sites in a fluid state and requires immediate pouring. Precast concrete, on the other hand, is cast and cured in a controlled environment before being transported and installed at the construction site. On top of that, there are also recycled concrete and green concrete, which are often defined as “more environmentally friendly” (due to e.g. lower carbon footprint — Portland cement typically emits about 0.6 kg of CO2e per kg of cement — or the use of recycled materials) compared to standard concrete. For the time being, there is no specific percentage that is universally agreed upon in terms of usage of recycled materials or reduction of carbon footprint to qualify the product as “green”.
The market for green concrete is experiencing rapid growth with a CAGR of around 12.8% from 2023 to 2029. Technological advancements in concrete composition and production processes are pivotal in this growth, offering new opportunities for reducing environmental impact.
Regionally, Europe currently dominates the global green concrete market and is expected to continue its lead, owing to a strong shift towards environmentally friendly alternatives to conventional concrete. As of 2023, the market size for green cement in Europe was valued at around $9.3B and is projected to reach $21.8 by 2032, growing at a CAGR of 9.6% during this period.
Price parity and green premiums in the evolving landscape of green concrete technologies
Green concrete is currently already an existing market and as part of the raw materials used in its production are essentially industrial waste, they come at a lower cost compared to virgin raw materials. Therefore, green concrete made with waste streams like fly ash, slag, silica fume, recycled cement fines, or recycled aggregates can actually be cheaper than grey concrete at this point in time. The usage of recycled materials such as fly ash, slag, and silica fume is already a mature technology that is applied at commercial scales (TRL 9+).
Apart from green concrete where recycled materials are used, green concrete can also involve carbon capture and storage. If the carbon is captured at the point source in the cement plant, it is more commonly referred to as “blue cement/concrete”. Although carbon capture and subsequent storage of CO2 in concrete reduces the amount of raw materials needed, the costs and energy input required to capture and process CO2 can be significant. Apart from costs and scaling, integration into existing infrastructure poses challenges. Whether or not price parity can be reached with grey concrete for this option mostly depends on advances in carbon capture that reduce its overall costs. Blue cement/concrete, involving point source carbon capture, but is not yet as widely commercialised as using recycled materials. The development and deployment of blue cement are still evolving, with some pilot projects and smaller-scale commercial applications in progress (TRL 7–9).
There are also still a handful of different technologies to potentially make cement and concrete more sustainable that are not as mature yet (TRL 1–6). These include, for example, biotechnology, electrochemistry, and alternative building materials. Many of these may take 5+ years to mature and gain a significant foot in the market.
Getting to net zero in the cement industry is expected to result in a 40–120% increase in the cost of cement. However, this translates to a relatively small increase in overall construction costs, estimated at 1.5–3%, since cement is a small portion of total costs. This suggests a potential willingness to absorb higher costs for greener construction materials. The estimated total investment needed between 2022 and 2050 to reach net zero in the cement and concrete industry is $1.42 trillion. This includes the costs of cement-making equipment, supply chain infrastructure, and carbon capture equipment.
There are public as well as private commitments that signal a willingness to pay for the net zero transition. For example, the ConcreteZero initiative, spearheaded by the Climate Group in partnership with the World Business Council for Sustainable Development and the World Green Building Council, involves 17 major businesses committed to using 100% net-zero concrete by 2050. Also in terms of investment trends there seems to be a clear market signal for low-carbon cement. Notable examples are companies like Brimstone and Sublime Systems, which have raised significant amounts of funding.
Although developers and contractors expect to pay premiums for sustainable materials, the demand for sustainable construction materials is increasing due to environmental awareness and potential long-term cost savings associated with sustainable building practices.
The regulatory landscape for green concrete: An overview of European, American and global regulations in place
It probably doesn’t surprise that the concrete market and its regulatory landscape are quite conservative. Buildings and other structural applications of concrete have to adhere to strict performance standards due to safety considerations.
In Europe, we use the European Norm (EN) framework and different concrete types are classified by strength, durability, and composition. In terms of supporting green initiatives in the concrete space, Europe is considered to be at the forefront and regulations are constantly updated. For example, EN 197–6 on “cement with recycled building materials” was recently updated to allow a higher percentage of recycled materials, now 35% instead of 20%, to be included in cement. Another important regulatory framework in Europe is the carbon border adjustment mechanism (CBAM), which aims to reduce CO2 emissions while equalising costs between EU and non-EU cement suppliers. This levels the playing field, as imported cement is subjected to the same CO2 reduction requirements as domestic cement. Up until 2026 is seen as a transition period and the CBAM will be effective from 2027 onwards.
In the US, the Inflation Reduction Act (IRA) announced $6B for decarbonisation of energy-intensive industries like cement with the goal to achieve net zero by 2050. In terms of specific regulations, some US states have approved the use of CarbonCure as an ASTM C494 Type S admixture.
Globally, the Global Cement and Concrete Association (GCCA) published in 2020 its Roadmap to Net Zero Production by 2050, proposing that the majority of emissions reductions should come from carbon capture and storage (CCS), process optimisation, and concrete reuse. The members contributing to this roadmap include most of the world’s largest cement companies like Holcim, Heidelberg Materials, and China National Building Materials. All in all, there seems to be a global focus on reducing emissions in the cement and concrete industry with Europe at the forefront.
