GREEN BUILDING MATERIALS MARKET ANALYSIS

Green Building Materials Market Size and Trends

The green building materials market is estimated to be valued at USD 400.74 Bn in 2024 and is expected to reach USD 891.45 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 12.1% from 2024 to 2031.

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Government regulations and growing consumer awareness regarding energy efficient construction are driving increased demand for green building materials. The market is witnessing rising focus on sustainable construction globally. Buildings account for around 40% of the total energy consumption as well as carbon emissions. In order to reduce their environmental footprint, builders are increasingly adopting green building materials and technologies. Various incentives and policy push by governments worldwide for the use of eco-friendly construction methods and materials are also fueling the demand for green building products in both the residential as well as commercial sectors.

Government regulation and support for green buildings

Many governments around the world are actively supporting and incentivizing the use of green building materials through various regulations, certifications, and initiatives. This is being driven by the urgent need to address environmental issues like climate change and reduce cities' carbon footprint. Governments recognize that the construction industry accounts for a significant share of global carbon emissions and resource consumption. By promoting sustainable building practices and green building materials, carbon emissions from this sector can be curbed substantially.

Many countries and cities have now made it mandatory for all new commercial and residential buildings to comply with green building standards and obtain relevant certifications. This ensures materials used have lower embodied energy and are less resource-intensive. Renewable energy integration in buildings is also being pushed through building codes. Financial incentives in the form of tax breaks and subsidies are given to projects that employ approved green building materials and techniques. Public construction projects also adhere to strict criteria to use eco-friendly alternatives. This high-level support demonstrates long-term commitment and sends a positive signal to the market.

Market Concentration and Competitive Landscape

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Growing consumer demand for sustainable living

Increasingly, sustainability has become a primary consideration for homeowners and building developers. With rising environmental consciousness, many consumers now prefer properties built with green attributes like energy-efficiency, healthier indoor environments, and lower carbon footprint. Younger homebuyers especially seek socially responsible features and want to live more mindfully. There is heightened interest in modular, recyclable, and natural building materials that align with one's values and reduce long-term living expenses. Offices and malls also recognize that sustainable workplaces boost employee morale, well-being and productivity.

Awareness around resource scarcity, climate change impacts and responsible consumption too is pushing demand. People understand materials like wood, bamboo, and recycled content avoid further depletion of natural resources.

Key Takeaways from Analyst:

Driven by increasing environmental awareness and sustainability targets adopted by governments worldwide, the demand for materials that reduce the environmental impact of construction is growing. Building codes and regulations are also evolving to favor use of green materials, thereby supporting adoption.

North America currently dominates green building materials usage owing to stringent codes and incentives supporting sustainability. However, the Asia Pacific region is expected to see the fastest rise in demand. With rapid urbanization and a focus on green growth, countries like China and India will drive significant opportunities. In Europe as well, concerns around reducing carbon footprint will propel the market growth.

While upfront costs of green materials have traditionally been higher than conventional alternatives, reducing premiums and total cost of ownership analysis are increasing their appeal. Continued technological advancements aimed at performance optimization as well as cost reduction could further aid market expansion. On the supply side, providers are investing in expanding production capacity and developing new product lines to tap the potential.

Market Challenges: High initial costs

The high upfront capital costs involved in using green building materials is a major constraint for the widespread adoption of sustainable construction practices around the world. Switching to materials like recycled concrete, bamboo, cork and other plant-based products that have less environmental impact often requires a significant premium over traditional concrete and wood.

Market Opportunities: Research and development of new products

Research and development of new green building materials presents a great opportunity in the global market. As sustainability and reducing environmental impact becomes a priority worldwide, innovative green building solutions that lower carbon footprint and improve energy efficiency are in high demand. Materials that reduce waste, conserve natural resources, and promote renewable sources will see widespread adoption in the construction sector in the coming years.  Several new categories of green building materials are emerging that have the potential to transform the industry. These include mass timber products made from sustainable forests that act as carbon sinks. Cross laminated timber, glue laminated timber and nail laminated timber are gaining popularity for commercial and residential construction due to their strength and lower embedded carbon compared to concrete and steel. Another promising segment is bio-based materials derived from agricultural or plant residues as sustainable alternatives to polymers, plastics and composites. Materials like hempcrete, mycelium composites and agricultural fiber concretes offer high performance insulation capabilities.

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Insights by Application: Growing focus on energy efficiency

In terms of application, insulation is expected to contribute 35.4% of the market share in 2024. Insulation has been contributing the highest share among all applications of green building materials market due to surging concerns over energy efficiency. As the awareness around environmental sustainability increases globally, builders and construction companies are more focused on incorporating green insulation materials that can offer superior thermal resistance and lower heating and cooling costs of buildings.

Insulation made from green materials like cellulose, fiberglass, mineral wool and foam insulations are gaining wider acceptance because of their excellent insulating abilities. The ability of these products to provide effective thermal barrier and minimize heat transfer has boosted their usage in applications like attic, walls and doors/windows. Their manufacturing using recycled content or renewable materials appeal to environmentally-conscious consumers. Moreover, growing building codes and norms promoting energy conservation have accelerated the demand for high-performance green insulation materials across the residential and commercial sectors.

Advancements in insulation technologies have also expanded usage in modern construction. Products using phase-change materials (PCMs) are proving effective for temperature regulation. Vacuum insulations panels (VIPs) offering ultra-high insulation are finding increased applications in building walls, roofs, and underground constructions. Continuous development of innovative solutions focusing on sustainability as well as performance will further strengthen the market position of insulation in coming years.

Insights by End User: Focus on sustainability in urbanization

Commercial and industrial is expected to contribute 37.4% of the market share in 2024. This segment has been witnessing strong growth led by rapid urbanization and increasing focus on sustainable construction practices across cities and industries.

With swelling urban population globally, the demand for green commercial buildings for office, retail and other facilities has significantly risen. Green buildings incorporating recyclable and energy-efficient materials are proving highly cost-effective over the lifecycle for various organizations. Similarly, industries are also incorporating sustainable practices into their facilities to lower energy footprint, attract environmentally-conscious workforce and gain recognition.

Rise of green certification programs like LEED by the U.S. Green Building Council has played a pivotal role in popularizing the benefits of sustainable commercial and industrial infrastructure. The incentives and guidelines by these certifications are driving higher utilization of green building materials in the sector. Moreover, supportive government policies promoting sustainable infrastructure also encourage greater use of recycled, locally-sourced and non-toxic materials in public, private and institutional projects.

Regional Insights

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The North America region currently dominates the global green building materials market. The region is expected to hold 35.6% of the market share in 2024. The U.S. is the largest individual country market, with the highest demand for products like recycled content insulation and wall panels, renewable wood flooring, bio-based doors and windows, low-VOC paints and adhesives. The growing environmental awareness and stringent government regulations have led to higher adoption of green building practices in commercial and residential construction. Majority of large cities have introduced mandatory green building codes and incentives for projects obtaining green certifications. The presence of front-running green building materials manufacturers and suppliers in the region also make North America an innovation hub.  Another key factor for the growth is higher individual affordability for eco-friendly materials compared to other regions. Established distribution and supply chain infrastructure allows easy access to a wide variety of green building options across the continent. High export activity from the region also highlights the leadership position in technologies pertaining to sustainable construction. Prominent cities like San Francisco, Chicago, and Seattle are emerging as epicenters for latest product launches and applications in new construction as well as retrofitting older buildings.

The Asia Pacific region has emerged as the fastest growing market for green building materials globally. Countries like China, India, and Indonesia occupy a significant portion of ongoing construction projects, driven by rapid urbanization and infrastructure development. Favorable government policies promoting energy efficiency and use of recyclable construction waste are supporting the adoption of sustainable technologies. Compared to developed regions, there is still ample headroom for the penetration of alternative building materials. Rising design aesthetic aligned with environmental consciousness also adds to the appeal of green building concept. Growth momentum is further complemented by a large pool of cost-effective manufacturing facilities and flexible trade regulations encouraging imports. Steadily improving certification protocols are helping build credibility for green tag among project owners and homeowners in the region.

Market Report Scope

Green Building Materials Industry News

• In April 2024, Navrattan Group announced plans to launch 'Green cement' in India soon
• In April 2021, Lafarge Egypt, a member of LafargeHolciam Group, a Switzerland-based multinational company manufacturing building materials, developed an ecolabel cement for the first time in Egypt. This new product of the company complies with the green criteria of the company and lowers the carbon footprint.
• In November 2020, U.K.-based Lhoist Group engaged in the production of lime and lime-based products, developed a product named Tradical Hemcrete which consumes less energy and also can be recyclable. Tradical Hemcrete is a mixture of lime, hemp wood, and water. Tradical Hemcrete is used is the construction of walls, renovation of old buildings, and as an insulating material.
• In May 2020, SmartLam, a manufacturer of cross-laminated timber products and RedBuilt, an industry leader in custom, sustainable wood building products for commercial applications, announced their partnership to supply Cross-Laminated Timber (CLT) products and solutions to architects, engineers, and contractors for projects using the popular mass timber building technology. RedBuilt will serve as the exclusive distributor of SmartLam CLT in the Pacific Northwest, West Coast, and Southwest.

*Definition: The green building materials market consists of products and services that are environment- friendly and help reduce the carbon footprint of buildings. This includes materials made from renewable sources like bamboo, cork, wool and recycled content. It also includes more energy efficient products like windows, insulation, lighting, HVAC systems and roofing that can improve a building's performance. The goal of green building materials is to construct and retrofit buildings in a more sustainable and eco-friendly way to conserve energy and natural resources over the lifespan of the buildings.

Market Segmentation

• Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Framing
  • Insulation
  • Roofing
  • Exterior siding
  • Interior Fin
  • Others
•  End User Insights (Revenue, USD Bn, 2019 - 2031)
  • Public facilities
  • Education
  • Commercial and Industrial
  • Healthcare
  • R&D Centers
  • Residential
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Alumasc Group Plc
  • Amvik Systems
  • BASF SE
  • Bauder Limited
  • Binderholz GmbH
  • CertainTeed Corporation
  • E. I. du Pont de Nemours and Company
  • Forbo International SA.
  • Interface Inc.
  • Kingspan Group plc
  • Lafarge
  • Lhoist UK Ltd
  • Wienerberger AG
  • LG Hausys Ltd.
  • RedBuilt LLC
  • PPG Industries, Inc.
  • BASF SE