Start-ups help Cut Carbon Emissions from Construction in Southeast Asia
The Construction Industry in Southeast Asia is Huge
Southeast Asia has a collective GDP nearing $4 trillion for its total population of 700 million, Zacua Ventures opined, and construction is a key part of that economic activity as it contributes 5%-10% of each nation’s GDP. The region’s construction sector totalled about US$530 billion in 2024 and is expected to grow 6% a year between through 2028.
While the construction industry in Southeast Asia is expanding rapidly, Zacua said it also faces challenges that inhibit its full potential. Resistance to digital tools and modern technology hinders productivity and innovation. Although construction management tools and prefab are used, adoption remains low due to the traditional and risk-averse mindset of the industry. And the vast majority of construction projects are still constructed and delivered by smaller players.
Industry practices are not environmentally sustainable.
While construction is clearly important, it is also a major cause of climate change and the resistance to change make reducing emissions difficult. The buildings and construction sector is the largest emitter globally of greenhouse gases, according to the UNEP, accounting for 37% of global emissions. BOXX further explained that the construction sector contributes to 23% of air pollution, 40% of drinking water pollution and 50% of landfill waste.
Historically, the UNEP said, much of the sector's progress toward lower emissions has focused on reducing "operational” carbon emissions from heating, cooling, and lighting. Forecasts show these operational emissions ay decrease from 75 percent to 50 percent of the sector's emissions in the coming decades. However, the production and use of materials such as cement, steel and aluminium are significant reasons for the huge carbon footprint and there has been little change in these materials.
In ASEAN, the IEA says that energy consumption in buildings accounted for a smaller yet still significant 23 percent of energy consumption and energy-related CO2 emissions. Worryingly, ASEAN’s building energy consumption is expected to grow by about 60 percent by 2030 and 120 percent by 2040, with energy efficiency only mitigating emissions by about 20 percent.
Changes can make a Difference
Given the huge environmental impact of construction, there is growing demand for more sustainable buildings.
So far, RSMeans Data explained, sustainable construction has focused on minimising a structure's negative impact across its entire lifecycle. Sustainable construction prioritises lowering a building's environmental footprint, from preconstruction and design on through to construction, operation and decommissioning. Key practices include lower energy usage, waste minimisation and conservation of natural resources, which can also lower energy costs, increase durability and cut maintenance costs. Eco-friendly materials such as bamboo or fibre-reinforced concrete can reduce emissions by 40%, Environment.co said.
In Southeast Asia, Zyeta said, regulatory requirements increasingly pushing construction companies towards green construction. Key certifications include the Green Mark in Singapore and the Green Building Index (GBI) in Malaysia. Green Mark-certified buildings have demonstrated energy savings of 20-30 percent, and GBI-rated have shown energy savings up to 35 percent as well as water savings up to 40 percent.
Technology is increasingly important for delivering these benefits. IoT-enabled sensors and facilitate efficient resource usage and seamless data exchange. Sensors and cameras can monitor factors such as temperature, humidity and vibration. Sensors embedded in concrete during casting provide insights for structural health monitoring, optimal water usage and predictive maintenance.
One specific solution is modular construction (MC), which Yale professor Julie Zimmerman found results in more effective material production, transport, energy use and waste management. A study by University of Cambridge and Edinburgh Napier University found that modular home construction can result in 45% less embodied carbon, CNBC reported.
Another trend is increased usage of green building materials, Building Radar said. Energy efficiency continues to be a priority, so new designs reduce energy consumption with passive solar design, better insulation, the integration of renewable energy sources such as solar panels and wind turbines, smart windows, and advanced HVAC systems.
These changes can unlock tremendous economic value. The green transition of the building value chain can unlock US$1.8 trillion in market opportunities globally, according to the World Economic Forum, as well as social and environmental value. Companies with best-in-class sustainability metrics have lower ESG risks, higher asset values and higher rental values. Energy-efficient designs and systems reduce costs through high-efficiency heating and cooling systems and advanced energy management systems.
Start-ups are Innovating Solutions
Companies have sprung up across Southeast Asia to provide the solutions construction companies need. Along with firms that have been around for a decade or longer, newer start-ups are also growing.
In Thailand, for instance, MAXISWOOD uses waste sawdust from furniture factories and the timber industry to produce composite timber that looks like real wood and is easier to install and maintain. Founded in 2011, its sustainable wood made from eco-friendly composite timber reduces the need for highly skilled labour and ensures easy setup.
Qi Square in Singapore, also known as BtrLyf, describes itself as an AI-enabled assessment and marketplace platform to achieve low energy, net zero and green certified buildings quickly at low cost. It provides a digital platform to conduct virtual assessment, analysis and diagnostics of buildings by creating digital twins for sustainability, then using data acquisition and machine learning techniques.
Social enterprises and small start-ups are also beginning to provide solutions on a smaller scale. Rebricks in Indonesia, for example, collects used plastic sachets and uses a recycling machine to transform the waste into recycled building materials such as pavers, hollow bricks, and roof and tile products. Plana Wood in Indonesia converts rice husks from farmers and recycled plastic into new materials that can be used as building blocks for architectural support. In the Philippines, The Plaf transforms plastic waste into a range of sustainable construction materials. And Green Antz in the Philippines, which similarly collects plastic waste and uses it to produce eco-bricks for the construction industry, collected 500,000 kilograms of plastic waste in Q1 2023 alone.
While there’s still plenty more to be done, start-ups are already playing a key part in developing solutions that can begin to mitigate the huge environmental impact of construction.
