Elias Hurmekoski Engineered wood products and wood construction in Europe: Trends, Drivers and Barriers Sant Pau, Barcelona, 29 November 2016
Outline 1. Short background 2. Arguments for and against market growth of wood construction 3. Outlook 12.12.2016 2
Million m3 Background 5 Production in Europe 4 3 2 1 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 CLT glulam Residential building in Jyväskylä, Finland 12.12.2016 3
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Supporting arguments for the positive outlook 12.12.2016 5
Advantges of modern wood construction Industrial prefabrication Engineered wood products -Efficiency gains (e.g., modular elements): Construction time reduced by months -Improved safety & convenience -Dry chain -Less need for workers on-site -Less waste -Less disturbance for the surroundings => Allows lower overall building costs, although material itself more expensive -Strength-weight ratio compared to concrete -Fitting accuracy & CNC milling -Use of small diameter and low quality logs possible -Fire & Earth quake safety -Humidity and temperature buffering -Not too innovative - resembles concrete elements -Renewable, carbon storing material 12.12.2016 6
Example wood-frame multi-storey construction markets in Finland Market share Number of apartments 10% 3500 9% 8% 3000 7% 2500 6% 2000 5% 4% 1500 3% 1000 2% 1% 500 0% 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Annual market share, % of apartments Cumulative number of wood-frame apartments 12.12.2016 7
Example wood-frame multi-storey construction markets in Finland Political factors (institutional changes) Government program in 2011 Review of regulations (to allow up to 8 storeys) Technological change Investments Prefabrication, volume element systems Economic feasibility Cost-competitiveness Increased credibility 12.12.2016 8
Facts and figures environmental impact Construction sector accounts for 42 % of total energy consumption, 35 % of total GHG emissions, 50 % of extracted materials and 30 % of water consumption, including the use phase of buildings Using 1 m3 of wood instead of concrete reduces carbon emissions 1.8 tons (substitution effect avoided emissions) Compared to the current state (below 10 % market share in the EU), a hypothetical 100 % market share would result in: a CO2 emission reduction of 36 million tons (1 % of total EU emissions) maximum of 180 million m 3 of roundwood demand (less than 25 % of the annual increment in the forests available for wood supply) in the EU 12.12.2016
Operating environment Characteristics of the construction sector 12.12.2016 10
Characteristics of the construction sector Construction sector has changed very little since the 1950s (except due to stricter energy efficiency requirements) Construction industry can be described as Path dependent (institutions, education, vested interests) Fragmented (short-term decision-making) Risk-averse (mostly incremental innovation) Developer and main contractor are the most influential actors in the construction value chain (in large scale construction in the Nordic countries) Different regional characteristics: Nordic, Central, Western 12.12.2016 11
Market shares - Big differences and no convergence 12
How to address the market barriers? 12.12.2016 13
Key strategies and policies Short-term Long-term Strategies Sharing risks: alliances (e.g. in Finland) Taking more responsibility in the construction value chain (e.g. in Sweden) possibly by establishing a developer firm Cost competition: Standardization Policies Removal of regulatory hindrances and cost burdens (create level playing field) e.g. fire regulations Direct support (city planning, public procurement) Stricter environmental norms Neutral fiscal measures (carbon tax) 12.12.2016 14
3 city cases Växjö, Sweden Triple helix (industry, government, academia) London, UK Hotspot for wood construction: LCA-based land pricing Also the light weight of wood an advantage (due to underground infra) Joensuu, Finland Tried to introduce wood-frame multi-storeay construction by obligation The support turned against itself, due to a loss of public credibility 12.12.2016 15
Summary Wood-based industrial prefabrication could address many issues in construction: Productivity, Quality, Safety, Environment However, the soft values and environmental issues are not emphasised in the construction sector decision-making perceived risks matter the most Instead, there are cultural, structural and regulatory hindrances Competition with other construction materials might change by 2030 Growth is possible, but only by major changes in strategies and policies 12.12.2016 16
Thanks! elias.hurmekoski@efi.int Mikko Matveinen, KKES, 2016 12.12.2016 17
References & other key literature 1. Hurmekoski, E. 2016. Long-term outlook for wood construction in Europe. Dissertationes Forestales 211. 2. Karacabeyli E., Douglas B. (2013). CLT Handbook, US Edition. FPInnovations and Binational Softwood Lumber Council, Point-Claire, Quebec. 3. Bühlmann U., Schuler A. (2013). Markets and market forces for secondary wood products. In: Hansen E., Panwar R., Vlovsky R. (eds.) The Global Forest Sector. Changes, Practices, and Prospects. CRC Press. 4. EC (2012). Strategy for the sustainable competitiveness of the construction sector and its enterprises. European Commission, COM/2012/433. 5. Jonsson R. (2009). Prospects for timber frame in multi-storey house building in England, France, Germany, Ireland, the Netherlands and Sweden, Växjö University, School of Technology and Design, Växjö, Sweden. 6. Mahapatra K., Gustavsson L. (2008). Multi-storey timber buildings: Breaking industry path dependency. Building Research & Information 36 (6): 638-648. 12.12.2016 18