Europe green building Market to Grow at a CAGR of 12.4% to reach US$ 122.61 billion from 2021 to 2028
The Europe green building market is expected to grow from US$ 54.1 billion in 2021 to US$ 122.61 billion by 2028; it is estimated to grow at a CAGR of 12.4% from 2021 to 2028.
A “green” building, which can be a home, an office, a school, a hospital, a community center, or any other structure, is designed in such a way that its construction and operation has low or negligible impact on the environment. A green building design can exhibit eco-friendly features such as the efficient use of energy, water, and other resources; use of renewable energy; measures for pollution and waste reduction; adoption of reuse and recycling processes; use of non-toxic materials; dynamic design adaptable to the environment; good quality of indoor environmental air; and enhanced quality of life of occupants. The buildings sector accounts for 36% of greenhouse gas (GHG) emissions and 40% impact on energy consumption in the European Union (EU), wherein the construction and demolition waste (CDW) alone represent ~25–30% of all waste generated across the EU. This creates an unprecedented demand for a green and sustainable approach to building design and construction in the region. However, characteristics such as climatic conditions; cultures and traditions; building types and ages; and environmental, economic, and social priorities vary in different European countries, which alters the market dynamics across the region.
The growth of the Europe green building market is further ascribed to several government policies adopted by European countries and the EU policy framework concerning the development of green and sustainable housing. For instance, in 2020, the European Commission announced a Renovation Wave to improve the energy performance of buildings across the EU by doubling renovation rates by 2030. This is expected to result in the renovation of over 35 million buildings by 2030, in addition to the new building construction. Similarly, the Europe Regional Network (ERN), a network of over 20 national green building councils, eight regional partners, and ~5,000 members, is engaged in ensuring the integration of sustainability across the value chain of the construction sector, thereby leveraging its influence and knowledge to transform the European buildings market. Owing to the thriving ecosystem for the green building market in Europe, several spectacular eco-friendly buildings have been designed, built, and showcased in Europe. A few examples of these buildings are Cube in Germany, the Edge in the Netherlands, and Bloomberg in the UK. These green buildings are building a positive influence on the green building market in Europe by creating avenues for innovation and setting the trends for the green building market worldwide. For example, The Edge is renowned worldwide for its use of IoT, photovoltaic, and LED technologies, among other advanced technologies, to measure and attain energy efficiency.
Impact of COVID-19 Pandemic on Europe Green Building Market
In Europe, currently, France, the UK, and Russia are the worst-impacted countries by the COVID-19 pandemic. The pandemic has created a temporary distortion in operation efficiencies of industrial bases in the European market. The green building market has been negatively impacted due to disruptions in the supply chain. The construction industry from the region has faced challenges in terms of the availability of construction materials. The supply networks for construction materials have also been disrupted
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The ongoing construction projects were temporarily halted due to the pandemic, which affected the market dynamics for the green building market. The declining trend in the construction industry owing to the pandemic has hampered the production of roofing, flooring, and insulation for green buildings. However, various industries are coming back on track after supply constraints affecting these industries are resolving gradually. The rising demand for green buildings across diverse industrial applications is expected to boost the growth of the Europe green building market in the region.Lucrative Regions for Europe Green Building Market
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Market Insight
Support from Government Policies
The increasing significance of green buildings in Europe can be seen in the large number of initiatives taken by both government and non-government organizations and agencies. Notably, in 2019, the European Commission launched the European Green Deal (EGD) underpinning a list of policy initiatives aimed at aligning Europe to the net-zero global warming emissions target by 2050. The areas covered under the European Green Deal include building and renovating, sustainable mobility biodiversity, sustainable food systems, sustainable agriculture, clean energy, sustainable industry, eliminating pollution and climate action. Under the deal, the commission has launched the EU Renovation Wave for the building and renovating sector, which aims at energy-efficient renovation of around 220 million buildings, to increase their environmental performances while generating costs savings for households. Furthering the deal in 2021, the commission proposed governments in the EU to align the rules for the energy performance of buildings with the parameters of EGD and laid down instructions to decarbonize the EU's building stock by 2050. The proposal includes the transformation of homes, schools, hospitals, offices and other buildings across Europe into green building to reduce greenhouse gas emissions and energy consumption, enhancing the quality of life for millions of Europeans. Similarly, during 2021, the UK government hosted a public consultation on proposed changes to the Building Regulations. In response to the consultation on Future Homes Standard, the government unveiled plans to radically improve the energy performance of new homes, requiring them to be highly energy efficient, with low carbon heating and zero-emission by 2025. Additionally, since 2009, Europe has mandated the provision of energy certification Under the Energy Performance of Building Directive (EPBD) which makes it mandatory for building measuring over 1000 m2 to collect the Building Energy Rating system (BER) certificate and Energy Performance Certificate. Therefore, the prominent support from government policies across the region is accelerating the growth of Europe green building market.
Product Type Segment Insights
Based on product type, the Europe green building market is categorized into insulation, roofing and siding, interior products, building systems, and others. The insulation segment led the market with a share of around 28% in 2020 and is expected to hold approximately 29% share by 2028. Insulation is a critical factor for meeting the criteria of a green building since it controls the influx and outflux of heat in the building. Therefore, the amount of insulation and the material used is a vital indicator of the resistance of a structure to energy dissipation. The most common materials in insulation for the construction of green buildings include fiberglass, cellulose, natural fiber (cotton, wool), polyurethane, polystyrene, and isocyanurate. Notably, expanding spray-on polyurethane foams are among the widely used insulation materials as they offer the highest insulation value for a given thickness and are excellent at air leakage elimination.
Europe Green Building Market, by Building Type (% Share)
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Building Type Segment Insights
Based on building type, the Europe green building market is bifurcated into residential and non-residential. The non-residential segment led the market with a share of around 78% in 2020 and is expected to account for over 76% of the total Europe Green Building market by 2028. Non-residential buildings include retail and other commercial buildings, office complexes, healthcare buildings, educational institutions, hospitality and restaurant buildings, and factories. The popularity of green building design has led to a significant transformation in approaches of designers, architects, and materials used in building green. Furthermore, the ever-increasing demand for sustainable business practices among corporates is creating solid growth opportunities for green building market players in Europe, as a large number of corporate organizations are adhering to zero/low emissions policies of the EU, which requires them to adopt green building practices in their offices.
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Europe Green Building Market: Strategic Insights
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The Europe green building market players focus on new product innovations and developments by integrating advanced technologies and features to compete. In December 2021, AECOM provided construction management services under WUHSD’s Measure AA bond program to modernize, upgrade, and expand the facilities. This contract helps the company leverage its brand recognition among the competing players. In July 2021, Turner Construction provided design-build services for the expansion of the Jacob K. Javits Convention Center. The innovative design has enabled the expansion to achieve LEED Gold certification from the US Green Building Council.
Based on product type, the Europe green building market is categorized into insulation, roofing and siding, interior products, building systems, and others. Based on building type, the Europe green building market is bifurcated into residential and non-residential. Based on country, the Europe green building market is segmented into six countries and regions—Germany, France, Italy, the UK, Russia, and the Rest of Europe.
Bauder Ltd.; AECOM; Skansk; Turner Construction; DuPont de Nemours, Inc.; Wienerberger; Alumasc Group plc; Forbo International; HOLCIM; and Kingspan Group PLC are a few major players operating in the Europe green building market.
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Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
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Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
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Frequently Asked Questions
UK held the largest market share in the Europe Green Building market. Significant government initiative for adopting the green building regulations coupled with rise in awareness for adopting clean building solution are the key factors driving the market growth over the forecast period. In January 2021, The UK Government had announced all new homes and businesses will have to meet rigorous new energy efficiency standards to lower energy consumption. In addition, October 2019, a new green standard, published by Ministry of Housing, Communities & Local Government for new building homes will bring an environmental revolution to home building. The construction industry is a heavy greenhouse gas (GHG) emitter and considerable initiative has been developed to meet net zero 2050 targets. For instance, in October 2021, The UK government published its Net Zero Strategy: Build Back Greener which enables lesser emission from construction industry. Furthermore, in September 2020, the World Green Building Council has revealed the recent signatories to the Net Zero Carbon Buildings commitment. Thus, such booming initiative from UK government stimulates the demand for green building which drives the market growth.
The alarming rate of environmental degradation has led to an increase in awareness about the impact of construction activities on the environment. According to a study by the World Green Building Council, the buildings sector alone accounts for 36% of the total emissions of greenhouse gas (GHG) and 40% of the impact on energy consumption in the EU. A green building is more efficient in terms of power consumption, impact on the environment and the lifestyle of its inhabitants, through the use of advanced material, systems and efficient design and construction practices. Furthermore, it is considered sustainable when it meets the zero-energy/zero-emission standard. The prominent features of green buildings include the efficient use of energy, water, and other resources; incorporation of renewable energy, e.g., solar energy; enactment of pollution and waste reduction measures; and integration of reuse and recycling processes.
The benefits of green buildings can be categorized into social, economic, and environmental categories. The social impacts of green buildings include the enhancement of inhabitants’ health and comfort to improve their overall quality of life. Their economic benefits include a significant reduction in operating costs and improvement in occupants’ productivity, coupled with a reduction in waste volume and the conservation of natural resources. Since green buildings are crucial in reducing the negative impact of conventional construction practices on the environment, there is a rising consumer affinity toward environment-friendly construction practices, which is one of the major factors driving the growth of the green building market across Europe.
Based on product type, the Europe Green Building market is segmented into insulation, roofing and siding, interior products, building systems, and others. In 2020, the insulation segment accounted for the largest market share. Insulation is a critical factor for meeting the criteria of a green building since it controls the influx and outflux of heat in the building. Therefore, the amount of insulation and the material used is a vital indicator of the resistance of a structure to energy dissipation. Some of the most common materials in insulation for the construction of green buildings include fiberglass, cellulose, natural fiber (cotton, wool), polyurethane, polystyrene, and isocyanurate. Notably, expanding spray-on polyurethane foams are one of the widely used insulation material as they offer the highest insulation value for a given thickness and are excellent at air leakage elimination.
Bauder Ltd.; AECOM; Skansk; Turner Construction; DuPont de Nemours, Inc. are the five key players in the Europe Green Building market. These companies have shown consistent growth in revenue and larger volumes of sales. Additionally, the well-established top five players are offering a comprehensive product portfolio and have a prominent presence in terms of share in the Europe green building market.
The market is estimated to register a CAGR of 12.4% during the forecast period. The European Commission has published the Renovation Wave Strategy to improve the energy performance of buildings by doubling the renovation rates across the region in the next 10 years. The key objectives of the Renovation Wave strategy include the enhancement of the quality of life for inhabitants, reduction in Europe's contribution to the global GHG emission level, acceleration of digitalization, and improvements in the reuse and recycling practices. As per this initiative, 35 million buildings would be renovated by 2030, creating 160,000 additional jobs in the green construction sector. The main areas of implementation of the policy include decarbonization of heating and cooling; minimization of energy poverty and worst-performing buildings; and transformation of public buildings such as schools, hospitals, and administrative buildings into green buildings. The European Commission aims to entail different domains of green building construction, from the conception of a project to its funding and completion, for the implementation of policy measures, funding tools, and technical assistance instruments. The EU members need to reduce their buildings' GHG emissions by 60% and energy consumption by 14–20% to achieve the 55% emissions reduction target for 2030, as proposed by the commission in September 2020. A majority of new construction projects in the region are in accordance with green building practices; however, 85% of buildings in the EU are aged 20 years or more, and 85–95% of these are expected to be operational in 2050. Therefore, the Renovation Wave Strategy of the European Commission, coupled with the adherence of the majority of government policies in the region to this strategy, is creating solid growth avenues for companies in the Europe green building market.
By building type, the residential segment is expected to grow at the fastest CAGR during the forecast period. Residential green building caters to the design and construction of homes keeping in mind conservation of resources and the energy-efficiency of the structure. These residential buildings typically reduce the negative impact on the physical environment; thereby promoting a healthy indoor environment for the residents. The use of integrated design approach can be aimed at design and operation of a residential building as an energy-efficient system. The enormous number of existing housing units in Europe, as well as the impact of buildings on the overall environment creates a huge demand for an integrated green building approach to residential units.
- Bauder Ltd
- AECOM
- Skanska
- Turner Construction Company
- DuPont de Nemours, Inc.
- Wienerberger
- Alumasc Group plc
- Forbo International SA
- HOLCIM
- Kingspan Group PLC
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