Circularity in the Built Environment 2024

According to the analysis for this report, the Asia-Pacific, Europe and North America could require 3% of their existing building stock to be retrofitted annually by 2030. This corresponds to approximately 40 million buildings in the Asia- Pacific, eight million in Europe and five million in North America. Latin America and the Middle East and Africa are expected to have retrofitting rates of 2.3% each by 2030, or approximately 4 million and 7 million buildings, respectively. The largest volume of materials required for retrofits will likely be in the Asia-Pacific, with approximately 25 billion tonnes needed from 2023 to 2050. Europe will require around 5 billion tonnes of materials during the same period. Additionally, the analysis shows the potential size of the materials market by segment (Figure 4). By 2050, the retrofit materials market is projected to reach approximately $2.3 trillion. During retrofitting, a portion of the material is extracted and replaced, while the majority remains intact. The model used in this analysis estimates that roughly 50% of the extracted material could be reused or recycled, significantly reducing waste. The remaining 50% is projected to be sent to landfill. By 2050, materials valued at $600 billion could be diverted from landfill and recirculated. This diversion not only confers an environmental benefit but also represents a major economic opportunity within the circular economy.Material required (in tonnes) for retrofit in 2050 to meet IEA net-zero targets FIGURE 3 2050 material required100% Gypsum board Stone Fibreglass Spray foam Clay tiles Fibre cement Foam board CelluloseOther Glass Flat steel Concrete (includes tiles) Wood Mineral wool Aluminium Brick Plastic (includes PVC)* Source: McKinsey analysisNote: * Polyvinyl chloride Circularity in the Built Environment: Unlocking Opportunities in Retrofits 11