Green construction market is estimated to witness high growth owing to rising environmental concerns and increasing government incentives & regulations
Global green construction market is estimated to be valued at USD 338.53 Bn in 2024, exhibiting a CAGR of 10.8% over the forecast period 2024-2031. Furthermore, rising awareness regarding green building concepts and sustainability can drive the market growth.
Market Dynamics:
Rising Environmental Concerns
Growing environmental concerns such as global warming, increasing carbon footprint, and natural resource depletion are prompting people and governments across the world to adopt green construction practices. The construction industry accounts for a significant portion of global carbon emissions. Thus, green construction helps reduce environmental impact through sustainable materials, energy efficient designs and renewable energy integration.
Increasing Government Incentives & Regulations: Various governments are introducing favorable regulations and incentives to promote green building and construction practices. For example, tax credits for builders, rebates on building materials, storm water fee reductions, and others. Strict laws regarding resource conservation and emission cuts are also compelling industries to utilize green alternatives. This is expected to boost demand for green construction over the forecast period.
Growing Environmental Concerns Among Consumers
One of the major drivers for the growth of green construction market is rising environmental concerns among the consumers. There is a growing awareness among both commercial and residential customers about the need to reduce carbon footprint and opt for more sustainable building practices. Customers are willing to pay a premium for green certified homes and commercial spaces as these people want to live and work in environment friendly structures. The perception that green buildings help lower energy bills in the long run is also motivating more construction projects to incorporate green building practices. Various government policies and regulations around the world is encouraging use of renewable materials and energy efficient systems, thus, boosting demand for green construction methods.
Increasing Stringent Government Regulations Regarding Energy Efficiency
Stringent government policies and regulations pertaining to energy efficiency of buildings can drive the green construction market growth. Various countries and states have implemented strict norms regarding minimum energy performance standards that should be met by new constructions. This is forcing builders to utilize sustainable and eco-friendly materials, renewable energy systems and green building practices to comply with new efficiency mandates. Government incentives in the form of tax credits for buildings certified with green building standards are encouraging more developers to opt for sustainable construction techniques. Strict enforcement of existing regulatory frameworks coupled with new legislations can drive the market growth.
High Initial Costs of Green Building Materials and Technologies
One of the major challenges being faced by green construction market is significantly higher initial capital costs associated with procuring and installing green building materials, systems and technologies. Construction products made from recycled or renewable sources tend to be more expensive than conventional alternatives. Energy efficient appliances, solar panels, green roofs, and others also involve heavy upfront investment. This substantial price difference makes it difficult for builders to incorporate green features and often deters customers. The payback period for the additional costs through long term energy savings also discourages many small-scale projects from opting for green construction practices.
Lack of Awareness and Skilled Workforce
Lack of proper awareness about benefits of green building techniques among general public as well as within construction industry can hamper the market growth. Many property developers and builders still do not perceive sustainability as a viable business model. There is also shortage of qualified green building professionals, architects, contractors who have expertise in implementing eco-friendly methods. This lack of specialized green workforce inhibits aggressive market expansion plans of companies. With new products, standards and certification criteria emerging regularly, continuous training is required which many local construction firms cannot afford or provide. Overcoming these awareness and skill development challenges would require collaborative efforts from all stakeholders.
Rising Investment in Retrofitting of Existing Buildings
Retrofitting of existing buildings to make them more energy efficient and environment friendly can offer market growth opportunities. With growing environmental regulations, most countries are now focusing on upgrading the resource consumption of old structures. This presents a massive untapped market potential as vast majority of buildings currently in use were built without consideration for sustainability. Companies offering specialized services for retro-commissioning, building envelope upgrades, lighting and HVAC replacements stand to benefit immensely. Significant funding from governments, financial institutions for such large-scale retrofitting projects can drive the market growth.
Growing Trend of Sustainable Infrastructure Development
Rapid urbanization and industrialization led to surge in infrastructure development activities. There is rising emphasis on constructing environmentally responsible infrastructure systems. This growing trend of sustainable infrastructure offers multi-fold opportunities for green construction market. Technologies enabling green buildings, smart cities, renewable energy plants, green transportation and water management hold promising prospects. Large public private partnership models for developing green urban hubs, industrial parks also provide scalable business avenues. With more governments committing huge investments in climate resilient infrastructure, these emerging opportunities can boost the expansion of green construction sector in the near future.
Link: https://www.coherentmarketinsights.com/market-insight/green-construction-market-4539
Key Developments:
- On April 26, 2024, Navrattan Group, a construction company, announced its plans to introduce eco-friendly "Green Cement" to the market. This product aims to meet the increasing demand for sustainable building materials without compromising performance or durability. Green cement, an alternative to regular Portland cement, reduces carbon emissions and environmental impact associated with concrete production.
- In September 2023, Holcim launched its Innovation Hub to showcase sustainable building solutions and serve as a co-creation lab for accelerating low-carbon, circular, and energy-efficient construction globally. The hub provides working spaces for start-ups and think tanks to collaborate on innovation and serves as a platform for urban dialogue on the future of sustainable cities.
Key Market Players:
Key companies covered as a part of this study include Balfour Beatty plc, BASF SE, Clark Construction Group, DPR Construction, Gilbane Building Company, Johnson Controls International plc, Kingspan Group plc, LafargeHolcim, Lend Lease Group, Lendlease Corporation, Lennar Corporation, Saint-Gobain , Schneider Electric SE, Siemens AG, Skanska AB, Tetra Tech, Inc., Turner & Townsend, Turner Construction Company, USG Corporation, Webcor Builders
