Circularity in the Built Environment 2024

The economic viability of circular retrofits is key to scaling circular practices across the retrofit value chain but requires further exploration. Although retrofits undoubtedly lower operational costs by reducing energy consumption, initially implementing circular practices can incur higher upfront costs. These costs arise from labour-intensive processes such as careful dismantling, advanced sorting and transportation to specialized reuse and recycling facilities, and actual reuse and recycling. Furthermore, these costs are influenced by space constraints in dense urban areas where storage and recycling facilities are limited. While green energy investments such as solar panels have an average payback period of six to 10 years,50 retrofit payback periods are more variable (more than 10 years for insulation, for example, compared to only about six years on average for appliances).51 Looking ahead, the minimum cost of circular retrofits needs to be assessed to identify the most cost-efficient pathways for transitioning to a circular value chain. To encourage circular approaches, landfill costs must remain high or continue to rise, while reuse and recycling costs must decline through economies of scale, improved efficiencies and advances in technologies. Additionally, regulatory mechanisms such as tax exemptions, decarbonization subsidies and carbon-pricing schemes can bolster the business case for circular approaches. For instance, Europe will introduce a separate emissions trading system for buildings and road transport in 2027.52 In conclusion, while circular retrofits offer long-term benefits, their economic viability depends on a combination of cost assessments, technological advancements and regulatory support. Additionally, it is crucial to evaluate whether achieving circularity in retrofitting is more feasible than in new buildings, given the potential to retain existing materials and components. By addressing these factors and clearly quantifying and communicating the cost- effectiveness of circular retrofits, stakeholders can unlock the full potential of circularity in retrofits and the built environment, paving the way for a more sustainable and resilient future.The economic viability of circular retrofits Circularity in the Built Environment: Unlocking Opportunities in Retrofits 25