Towards a Circular Economy in the Built Environment: Blockchain as a solution for supply chain transparency

The engineering and construction industry is the world’s largest consumer of raw materials [1] and consume around 40% of all the energy [2]. This is mainly due to the linear development model the building industry traditionally follows, where materials are sourced, used and finally disposed of as waste.

This linear model affects the environment very negatively, as it results in high carbon emissions, increased landfill, unsustainable water extraction and pollution of the ecosystem. [3]

The circular economy seeks to solve the environmental problems of the building industry.

The circular economy seeks to rebuild the flow of financial, manufactured, social and natural resources within the economy. [4] Many professionals and companies within the construction industry (e.g. architects, engineers, construction companies and facility managers) are highly involved in issues related to sustainability and circular economy.

Additionally, a lot of legislation related to circular economy exists within the building industry concerning a wide range of different issues, such as: efficient design; recycling of materials and equipment; use of water and energy; etc.

But despite the progress that has been achieved during the last decades, we are still very far from reaching a circular economy in the built environment.

Model of Economic and Technical Circles in the building Industry Life Cycle. (Source: Ref 3)

Blockchain and BIM as a solution to control the supply chain in the Building Industry

One key issue that must be solved for a transition to a circular economy is the control and transparency of the supply chain. This should include the tracking of all the components and the resources applied (both biological and technical) throughout the whole lifecycle, which in today’s global world, can involve hundreds of stages and dozens of geographical locations.

The building industry faces the general needs above, but also some additional problems:

• The supply chain of the finished artefact is exceptionally long and diverse.
• The lifecycle of the final product is very extended in time.
• The main costs of a building are not generated during the design and production stage but during its operations and maintenance.

The current lack of transparency within the supply chain makes it very hard, and sometimes impossible, to get information about issues subjects such as: what building materials contain; where do they come from; how they have been produced; if they have been remanufactured, reused, etc.

So as to solve this problem, both buyers and sellers need a reliable system to verify and validate the true value of a product or service through the value chain in the building industry. [5]

Two technologies, that if used together, can help to solve these problems are Building Information Modelling (BIM) and Blockchain. Below it is presented and discussed how these technologies and can be put to work together to achieve transparency in the building industry through its whole life cycle.

What is Building Information Modelling

Building Information Modelling (BIM) is a platform for central integrated design, modelling, planning and collaboration within the built environment. BIM provides all stakeholders with a digital representation of a building’s materials, systems and characteristics throughout its lifecycle.

Application of BIM along the Buildings Lifecycle Value Chain. (Source Ref. 1)

BIM is a mature technology with a lot of different software and applications available on the market to choose from. It is applied in most of the large building projects in Europe and the legislation in most western countries is making its use obligatory for public projects and contracts [6].

What is Blockchain?

Blockchain is a large database, physically distributed in different computers, where each one stores the same information in a secure and immutable way and the members can add new information, but they can’t modify any previous record. It offers a secure, neutral and transparent information management platform for any application, but it is especially relevant in environments where there is no absolute trust established between the actors.

Model of blockchain architecture with principal components. (Source: own design)

Blockchain and BIM to track information within the value chain

Thanks to its characteristics of being a safe, transparent and unalterable system, blockchain, is a very interesting solution to be used for the registration of any data through the lifecycle of products and services in the complete value chain of the construction industry.

So if the Building Information Systems used blockchain, parameters such as: origin, treatment and composition of materials; social and labour conditions; the energy and water applied for production, handling and transportation; environmental pollution generated at any stage of the process; etc. could be registered and verified through the whole value chain of any building project.

Hence, the use of blockchain with BIM, would permit all actors in a building project, such as distribution companies, retailers, designers, construction companies, real estate companies, users and consumers, access all the detailed information of a building, not only to assure the characteristics of its materials and design, but also its total social, economic and environmental impact on a global scale through its whole life cycle.

References

1. Shaping the Future of Construction A Breakthrough in Mindset and Technology, World Economic Forum, May 2016. Available at: http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf
2. U.S. Energy Information Administration. See: https://www.eia.gov/
3. The Circular Economy in the Built Environment, 2016, Arup. Available at: http://www.driversofchange.com/
4. Ellen MacArthur Foundation. See: https://www.ellenmacarthurfoundation.org/
5. Jørgen S. Notland & Anders V. Hua, (2017) Blockchain enabled Trust & Transparency in supply chains. See: https://medium.com/@jrgensvenneviknotland/blockchain-enabled-trust-transparency-in-supply-chains-journal-format-2744fa4f37d
6. EU BIM Task Group. See: http://www.eubim.eu/

Final Note

This article was originally presented by Stefan Junestrand at the Circular Economy Forum at IE Business School (Madrid) on April 11th, 2018.

It was initially posted on the Blockchain4Cities website: http://blockchain4cities.net/article/towards-a-circular-economy-in-the-built-environment-blockchain-as-a-solution-for-supply-chain-transparency/