Fernando de Querol Cumbrera
Research expert covering construction, loans, leasing, savings, and debt
Most building materials must be processed to be used for construction. Steel is mainly produced from iron ore, coal, and other materials such as limestone or steel scrap. Afterwards, crude steel still has to be transformed into a final product that can be used for construction, for example, structural steel. Manufacturing cement is similarly complex, and even wood needs to be processed into lumber. These are the materials that, along with iron, formed the structure of most new homes in Japan, as well as in most other countries, although in differing distributions.
What is their carbon footprint?
The CO2 emissions of the iron and steel sector worldwide amounted to 1.41 metric tons per metric ton of steel. In order to reach net-zero, the CO2 intensity needs to decrease significantly over the next several years. Building material companies such as Holcim released many pollutants, not just CO2, but also dust, which harms human health, as well as nitrogen oxides and sulfur dioxide. Recently, there has been some focus on how to reduce the emissions of manufacturing cement, steel, and other materials. Nevertheless, the global CO2 emissions of cement amounted to 4.3 percent of all emissions in 2022, while the carbon footprint of steel, as stated above, was similarly high.Rising prices of building materials
Since 2021, the cost of building materials has been increasing in countries all over the world. The producer price of construction materials in the United States reached a growth rate of nearly 27 percent in 2021, and 12.6 percent in 2022. In some countries, the growth rate of these prices has not yet slowed down. For example, the cost of some mineral construction products in Belgium between January and September 2023 was over 20 percent higher than in the previous year. This was also the case for the price of bricks, tiles, other baked-clay products, cement, and ready-mixed concrete. These price increases have had an important effect on the construction sector, as 43 percent of SME house builders in England saw material costs as one of the main constraints hindering them from building more homes in 2023.
