Decarbonizing construction: the potential of cross-laminated timber

There are buildings, urban plans and whole cities in conception, design and construction today that may take up to 30 years to be realized. Without rapid improvements in the sustainability of construction, there is a risk that these new buildings could lock in carbon-intensive city development and place communities at risk of severe climate impacts.1 The building sector is among the biggest contributors to greenhouse gas emissions and will have added 230 billion square metres of new construction to global building stock by 2060.2

But high-level political commitments are showing promising signs that shifting away from high-carbon construction is possible. In 2021, the COP26 agenda included a dedicated ‘Cities, Regions and Built Environment’ day for the first time. Furthermore, 76 per cent of the countries that had submitted their Nationally Determined Contributions (NDCs) by October 2021 referred to buildings.3 However, most NDCs do not include full building decarbonization targets and areas such as building materials remain under-addressed.4

The past few years have also seen the emergence of policies that directly address the impact of embodied carbon emissions from construction. Regulations that demand the calculation of embodied emissions came into force in Sweden in 2022 along with indications that project maximum values could be expected to be set from 2027. France has implemented dynamic life cycle assessment requirements for embodied emissions over the whole life cycle of a building. In the US, the Buy Clean initiative also holds promise for prioritizing low-carbon construction materials in public procurement.9

Other policy interventions are in the pipeline elsewhere, such as the Industrial Deep Decarbonization Initiative, co-led by the United Kingdom and India, to address carbon-intensive construction.10 At the same time, there has also been a shift in perceptions around the role the built environment has to play in shaping health and well-being.11 In this context, attention is turning to the greater use of natural materials in the built environment.

Engineered wood products, such as cross-laminated timber (CLT), are an area of growing interest among policymakers and built environment professionals. Recent decades have seen the revival of wood in the construction sector with rapid advances in the development of ‘mass timber’, or engineered wood products, particularly cross-laminated timber. First used in 1990 in Austria, CLT was incorporated into the International Building Code in 2015 and the global CLT production reached 1,853,437 cubic metres in 2021.12 Over the 2021–28 period, the market is expected to grow from USD$806 million in 2021 to over USD$2 billion in 2028 at a compound annual growth rate of 14.4 per cent in forecast period.13

Demand drivers for use of CLT can include improved environmental impact and well-being as well as cost. Use of CLT can be cost-effective due to its light weight – requiring smaller and cheaper foundations – its suitability for modular building methods and easier lifting of components.14 Initial studies also highlight its potential for reducing CO₂ emissions from construction15 and acting as a carbon store due to how wood can sequester carbon during its life-cycle.16 Others have suggested that the innovation and aesthetic appeal help CLT buildings attract leases faster and at higher lease rates.17

While CLT holds potential to help deliver decarbonization, finding ways to scale up its use, while avoiding negative unintended consequences, is crucial. There is no one-size-fits-all approach to material choice – the sustainability of a material is extremely contextual. Using forests for production presents unique land management challenges that require expertise and careful management to avoid negative consequences such as carbon leakage. Impacts of demand shifts for forest products will vary based on geography, forest composition, existing management practices, forest tenure and ownership and forest health.18 Poorly managed production with little understanding of local environmental, social or political context can lead to negative impacts such as displacement of people and communities.19

Increased demand for, and use of, timber must be accompanied by a strong legal and political commitment to sustainable forest management including forest certification schemes, empowerment of local communities and efforts to curb illegal logging.20 Clarity in policymaking, communication and strong enforcement can help make the case for the sustainable use of timber, overcoming a ‘social licence gap’, where sustainably managed timber harvesting can be associated with deforestation.

CLT is one potential option in the transition towards a sustainable material palette. There is no single material that will solve all problems and, importantly, the selection of more sustainable materials does not remove the need for their sustainable use and disposal. Material choice fits within a larger picture that includes operational efficiency, length of service and reuse or disposal options. When choosing materials, questions about efficiency, utility, fire safety, durability and whether new construction is necessary at all must be considered right along the value-chain.21

Rapid and far-reaching transitions can often proceed through three phases of actions: emergence, diffusion and reconfiguration. Below outlines the current state of play and challenges to be overcome if bio-based materials such as CLT are to deliver on lower carbon construction at scale.

Emergence is a stage where innovations emerge through pioneering activities but often have low performance and high costs compared to existing dominant designs.22

CLT is in the early stages of becoming mainstream in construction. Uncertainties remain over its performance in comparison to other materials on key criteria including environmental impacts, structural performance and fire safety. While life cycle analysis (LCA) can play a crucial role in enabling comparisons between different materials, it is not a perfect method. LCA can be subject to methodological gaps and weaknesses, resulting in widely varying results for similar buildings and adding to the misperceptions surrounding the use of new materials such as engineered wood. Uncertainties around the quantity of carbon sequestered in wood and released at the end of a product’s life further limits the value of LCA.

Finally, LCA does not factor in the implications of using land to produce timber for the construction industry, given competing demands on land. Indeed, the construction sector is not the only sector turning towards nature to reduce emissions: there is enormous demand for biomass and biofuels to produce energy too. All of this presents a real risk that decisions may be made based on an incomplete picture of emissions reduction opportunities in buildings.23

Structural performance. As CLT becomes more frequently used in mid-rise residential sector buildings, information about its structural performance is providing more confidence in its use. Yet, professionals identify remaining challenges in knowledge and lack of design regulations when working with complex dynamic loads, point supports and connections.24

Fire risk. For CLT to achieve residential-market scale, certainty that CLT buildings are not a fire hazard, must be established. For example, current UK regulation requires timber external walls to pass a large-scale fire safety test prior to use on residential buildings between eleven and eighteen metres tall.25 More data is required to understand how fire spreads and how long it lasts in CLT structures, as well as other metrics such as re-ignition potential and whether it is safe for firefighters to enter.

Recommendation: Amplify demonstration effects to provide proof of performance

A track record of successful use cases that can be replicated will build confidence. To achieve this, there is a need to create niches for pilot projects and agreement on formalized measurements of performance, for example, LCA and life cycle costs for new CLT buildings. Demonstration projects, such as Mjøstårnet in Norway (85.4 metres), until recently the tallest timber skyscraper globally, and Ascent in Milwaukee (86.6 metres), the new world-record holder completed in August 2022, are providing useful data.^26,27,28

Recommendation: Open knowledge base to facilitate knowledge sharing

To accelerate the spread of knowledge about the performance and application of CLT, existing projects should share more data, increase transparency and trial robust standards to ensure that assumptions, uncertainties and omissions don’t cloud decision-making. This open knowledge base should be differentiated by regional and geographical needs. Sharing the findings from use of bio-based materials can help to tackle the perception that such materials are of low quality.29

Recommendation: Trial the use of CLT with public policy projects to test fire safety

Public funding should be made available to provide fire and durability testing for CLT buildings to prove performance effectiveness. Additionally, research and development funding should be allocated to understanding how other materials that form part of building design, such as insulation or fire retardants, perform in a CLT building.

Financial viability. Any new building products compete with conventional products and other materials so considerable investment is needed to support innovative projects.30 Turning prototypes into commercial solutions remains very hard for novel bio-based materials due to a lack of established infrastructure to scale up and develop.31

Recommendation: Invest in research and development and innovative pioneers

Starting with innovative hybrid solutions that combine timber with traditional materials, which do not face the same regulatory, knowledge and skills barriers, can act as a stepping-stone and help accelerate market uptake while providing useful data.32

During the diffusion stage, complementary changes in institutions, business models, mainstream practices and professional standards support uptake and growth in market.

Knowledge about CLT is currently restricted to highly skilled specialists, across both the construction and policy space, and is not yet embedded into standard ways of working. In a survey of European experts in timber engineering and construction, respondents rated the level of awareness of CLT of construction managers, contractors and owners/initiators as ‘low’ or ‘very low’.33 The main perceived barriers to the adoption of CLT were compatibility with building codes, the lack of availability of technical information, misconceptions about cost and lack of information on fire safety and durability without which it can be difficult to insure CLT assets.34 It is a challenge to overcome the uncertainty of imperfect knowledge in a traditionally conservative sector.

Recommendation: Upskill the construction profession to become more comfortable with new applications and consider environmental factors

Adding modules about embodied carbon into professional training in the built environment sector, and for policymakers, can help to widen the pool of decision-makers that have the expertise to adopt new materials. The work of the Institution of Structural Engineers shows how a trusted information provider can enhance skills for addressing climate change into the profession.35

Current markets for CLT are fragmented with regulatory barriers often dampening uptake of the material. Common challenges are the length and difficulty of obtaining permits for wood structures, dealing with obsolete regulatory frameworks and facing blocking regulations such as building codes.36^,37

There is also a lack of alignment over built environment decarbonization initiatives. Localized efforts doesn’t necessarily translate into national-level policy and economic decision-making. In mainland Europe, the lack of lobbying from the sector has been identified as contributing to why the sector has not embraced timber, though some industry-supported net-zero building standards are being created in other places, for example, in the UK.38^,39

Recommendation: Policy interventions to spur market creation

Key to establishing new markets for CLT is creating a supportive policy environment across building regulations, certifications and insurance mandates among others. Finding ways to streamline the regulation of novel materials needs to be accelerated to keep pace with their development. Government procurement can be a particularly powerful policy lever to create niches that provide the demonstration effect-and-use case.40

In France, President Macron has decreed that all buildings funded by the state must be 50 per cent wood or other bio-based materials.41 Sweden is pursuing a broader shift to make the Swedish economy bio-based by 2050, with the Swedish timber industry at the heart of that ambition.42

Recommendation: Establish bio-based material sectoral institutions to drive alignment and scale

There is currently no sectoral organization for bio-based materials so there is a lack of leadership and policy. A more unified front for the bio-based materials sector could work to educate the supply chain and help build cultural and policy acceptability for new materials.

Scaling the use of CLT will require the establishment of new, complex global supply chains. To date, most growth in CLT processing has taken place in Europe, Canada, New Zealand, Japan and, more recently, in the US and Australia.43 CLT has a very extended supply chain from primary processing and harvesting of timber to project specifiers and construction companies.44 How these actors are connected creates implications for international trade, logistics, transparency of supply and potential disconnection of end users from local land management best practices.

Recommendation: Consider local context

The sustainability and social value of material production and use is extremely contextual. For example, the use of timber as a single-source solution to address large-scale housing gaps is discouraged in developing countries where deforestation is poorly regulated. However, in these contexts, bamboo and other plant fibres hold a lot of potential.45 Material choice should be considered in line with local context including environmental conditions (e.g. seismic zones, high winds, flood zones, extreme temperatures etc.), supply chains, local economy, local knowledge as well as environmental impact across the life cycle of the material.46

Recommendation: Establishing open digital supply chains

Open digital supply chains could enable mass adoption through providing a digital thread that connects forestry, product manufacturers, construction managers and waste disposal at the end-of-life of the building. This also enables the embedding of a range of performance metrics and circular use of products by including information such as production location, carbon input, distance travelled across supply chain, re-use value and others. Governance of such a digital information flow is critically important. Open data governance must be controlled by an organization that is likely to be around for the entire duration of a building’s life cycle such as a government organization rather than an individual company.

Cities can play a powerful role in paving the way for sustainable construction by acting as enablers of innovative solutions. Because of their smaller scale, cities can act as facilitators of bold policies – testbeds for how to overcome climate challenges in a concrete way – which can then be shared, replicated or scaled.47 Cities across Canada are trialling CLT in tall buildings,48 while Bordeaux in France, has pledged to build 270,000 square feet of wooden spaces every year between 2017 and 203249 and the Metropolitan Region of Amsterdam has mandated that 20 per cent of all new housing projects built from 2025 must be constructed with wood or other bio-based materials.50

These early adopters must be supported to enable success and wider adoption. Early-adopter cities can set a precedent and share vital information. But to overcome barriers such as lack of supply chain integration and policy support at the speed required will require greater regulatory, financial and capacity-building support from national governments and the private sector. Recent research indicates that national and regional governments tend to have primary authority or influence over two-thirds of urban emissions abatement potential and that 37 per cent of local government mitigation potential depends on collaborative action among different levels of government.51

In the reconfiguration phase, new systems are anchored in regulations and standards, and trade and investment policies are realigned to the new status quo. A rewiring of how finance and policy reward certain outcomes over others is needed.

Siloed approaches to developing the built environment currently dominate. Choices that shape the built environment are made at numerous levels, from tax structures, infrastructure investment strategies, performance standards, to environmental regulations.52 Achieving buildings that deliver wider social value will require policy alignment across broader domains.53 A deeper, and less incremental, approach to policy will be needed to drive the material transition needed.

Recommendation: Capitalize on growing interest in sustainability to drive cultural tipping points

The architectural profession is reportedly witnessing an influx of individuals who hold a broader sense of the role architecture should play in what a building should be. Architects are increasingly questioning the environmental footprint of the production of buildings and rejecting traditional architectural standards in favour of approaches that prioritize sustainable resource use and societal well-being. These shifting values are exemplified by the UK Architects Declare initiative, which has been endorsed by over 1,100 signatories who, among other goals, have committed to adopt more regenerative design principles and accelerate the shift to low embodied carbon materials.54

Recommendation: Fill the wider policy support void regarding how to decarbonize the built environment

Ways must be found to reconfigure current building regulations to reflect the possibilities of modern timber construction. Developing standards in a more holistic manner and in collaboration with insurers, real estate practitioners, designers and timber sourcing specialists, can help ensure that the resulting codes are specific to the relevant materials and will encourage sustainable sourcing and use.55

Current risk-averse thinking across financial institutions is maintaining barriers to CLT's uptake. For example, insurance companies maintain risk-averse thinking56 while banks and mortgage providers prefer concrete over engineered timber due to the potential risk of fire or water damage to CLT assets which, in turn, increases collateral or insurance risk.57

But the past few years have seen governments, corporates and investors commit to net-zero emissions targets. These commitments need to be turned into effective decarbonization action by financial institutions. While strategies to reduce emissions in built environments are emerging, a lack of dedicated financial support risks hindering the scaling and implementation of promising solutions at the pace needed.

Recommendation: Align investment with embodied carbon targets

Investment is needed across all aspects of the CLT supply chain – not just production but also across the value-chain for engineering and higher-tech manufacturing capacities. Clear adoption practices and common standards for net zero emissions need to become widespread among investors and core to their operations

In conclusion, demand for low-carbon construction materials is growing and becoming a policy agenda item across numerous countries.

To meet this demand, new ways of using materials, such as CLT, are being trialled. But a quick scaling up of materials can bring as many challenges as it offers solutions. There is a crucial role for policy to provide guardrails, support demonstration projects and testing and send the signal of direction of travel to give certainty to investment. Cities can act as testbeds to increase learning and deployment but need support at a national level combined with the scale of investment.

Ultimately, the adoption of CLT and other bio-based materials needs to fit within wider sectoral changes, including a continued focus on efficiency, innovation and decarbonization across all construction materials, as well as building efficiency and longevity.