Reaching Net Zero in Construction: Decarbonization Strategies and Responsible Carbon Offsetting
The buildings and construction sector is the single largest contributor to global greenhouse gas emissions.
Today, the industry produces around 12 billion tonnes of CO₂ per year, accounting for roughly 34–39% of global annual CO₂ emissions, depending on how upstream energy generation is counted. This makes construction not just a major emitter, but a decisive sector for tackling climate change.
With such a significant share of the global carbon footprint, decarbonization in construction is no longer optional. If the world is to meet the targets outlined in the Paris Agreement and follow science-based pathways to Net Zero, the sector must take radical accountability for its emissions, and the way we design, build, and operate buildings must change — fundamentally and fast.
Understanding the Carbon Footprint of the Construction Industry
To effectively reduce emissions, the first step is understanding where they come from.
In the construction sector, emissions are generally generated across two overlapping layers:
Organizational emissions
These include emissions produced by companies during activities such as:
architectural design and engineering,
project planning and development,
procurement and logistics,
construction operations and site management.
These emissions fall mostly under Scope 2 and 3 categories and reflect how construction businesses operate as organizations.
Project-level emissions
Project-level emissions relate directly to the construction and operation of buildings and infrastructure. These are often the most material emissions and persist throughout a project’s entire lifecycle.
Together, these layers make the construction industry one of the most complex and carbon-intensive value chains in the global economy.
Materials, Energy, and the Scale of the Challenge
Construction is the largest industrial consumer of raw materials worldwide.
Producing core building materials such as cement, concrete, steel, aluminum, and glass requires vast amounts of energy and generates substantial emissions. The sector alone consumes over 50% of global steel output and is also a major user of wood-based products.
In addition to materials production, emissions are generated through:
transportation of materials and equipment,
on-site operation of heavy machinery and vehicles,
long-term energy use during building operation.
When the energy used to power buildings is included, buildings and construction account for roughly 36% of global final energy use and up to 39% of energy-related CO₂ emissions.
This combination of material intensity, energy consumption, and long asset lifetimes explains why reducing the carbon footprint of construction is both critical — and challenging.
Embodied vs. Operational Carbon
Carbon emissions from buildings and infrastructure projects are typically divided into two categories:
Embodied carbon
Embodied carbon refers to all emissions associated with materials and construction processes across a project’s lifecycle, with the largest share occurring before the building is even occupied.
This includes emissions generated:
during the production of materials such as steel, concrete, aluminum, and timber;
during the transportation of materials and equipment to site;
during construction activities and machinery operation;
during maintenance, refurbishment, and eventual end-of-life processes.
Because embodied carbon is locked in early, decisions made at the design and procurement stages have an outsized climate impact.
Operational carbon
Operational carbon emissions are produced during the use phase of a building or infrastructure asset. These typically come from:
heating, ventilation, and air conditioning (HVAC) systems,
refrigerant leakage,
electricity consumption for lighting, equipment, and building systems.
While operational emissions are easier to measure and manage over time, they accumulate steadily across decades of use.
Why Embodied Carbon Deserves More Attention
Historically, much of the industry’s decarbonization effort has focused on reducing operational emissions — through energy efficiency, improved insulation, and renewable energy integration.
However, research increasingly shows that embodied carbon is often the dominant emissions source, especially for new construction.
For a typical non-optimized commercial building:
embodied carbon averages around 0.5 tonnes of CO₂ per square meter;
operational carbon averages around 0.05 tonnes of CO₂ per square meter per year.
For large commercial towers of 30,000–100,000 m², this can translate into:
15,000–50,000 tonnes of embodied carbon upfront, and
1,500–5,000 tonnes of operational emissions every year thereafter.
Once embodied emissions are released, they cannot be undone, making early intervention essential.
Pathways to Decarbonization in Construction
A science-based transition to Net Zero in construction typically requires three interconnected steps: measuring emissions, reducing them at source, and neutralizing what cannot yet be eliminated. Recent research shows that when these steps are combined with circular economy principles, the sector can unlock far deeper emissions reductions than previously assumed.
1. Measure emissions across the full value chain
The foundation of decarbonization is measurement.
Construction companies and asset owners must quantify their Scope 1, 2, and 3 emissions, covering not only operational energy use but also the embodied carbon associated with materials, transport, construction activities, maintenance, and end-of-life processes. This typically requires robust carbon accounting software, high-quality supplier data, and, in many cases, support from environmental consultancies.
Consistent measurement and comparable data are crucial to enable reductions, benchmark progress, and credibly align with science-based targets.
2. Reduce emissions at source
Emission reduction is where the construction industry has its largest and fastest leverage.
Traditionally, decarbonization efforts have focused on operational efficiency. While important, research increasingly shows that embodied carbon reduction is the critical frontier, especially for new construction.
Key reduction levers include:
improving building design and material efficiency from the earliest planning stages;
adopting lower-carbon materials such as mass timber, recycled steel, and low-carbon concrete;
electrifying heating and cooling systems to replace fossil-fuel-based HVAC;
phasing out high-impact refrigerants;
improving production processes for carbon-intensive materials;
applying circular economy principles, including reuse, retrofits, modular construction, and design for disassembly.
Recent analysis by McKinsey and the World Economic Forum suggests that a circular economy for the built environment could reduce embodied carbon emissions by 3.4–4.0 gigatonnes of CO₂ by 2050, representing up to 75% of the sector’s embodied emissions.
Despite this potential, global adoption remains limited. Current projections indicate that only around 13% of this reduction potential may be realized by 2030 unless investment, policy frameworks, and industry coordination accelerate significantly.
Cities are already demonstrating what’s possible when circular strategies are embedded into regulation and procurement. For example:
Vancouver requires new buildings to reduce embodied emissions by 40% relative to 2018 levels by 2030;
Rotterdam operates material reuse hubs that enable contractors to borrow, return, and reuse building components;
Paris integrates regenerative materials and ecosystem-based solutions into urban planning and public infrastructure.
These examples show that carbon reduction targets must be embedded at the project level. Design teams, engineers, procurement managers, and contractors all influence embodied emissions and must be aligned around shared targets.
3. Neutralize residual emissions with high-integrity carbon offsetting
Even with ambitious reduction strategies, some emissions will remain — particularly from hard-to-abate materials such as cement and steel, which together account for roughly 30% of building material emissions.
To reach Net Zero in line with science-based pathways, these residual emissions must be neutralized. When used responsibly — after measurement and reduction — high-integrity carbon offsetting enables construction companies, developers, and asset owners to:
meet near-term climate commitments,
align with investor and regulatory expectations, and
channel financing toward verified climate projects with real, measurable impact.
Organizations that have signed the World Green Building Council’s Net Zero Carbon Buildings Commitment explicitly commit to reducing operational emissions as far as possible and compensating remaining operational and upfront embodied emissions in new developments and major refurbishments by 2030.
For these companies, carbon credits are not a substitute for decarbonization, but a mechanism to reach Net Zero while reduction pathways mature — particularly for hard-to-abate Scope 1–2 emissions and selected Scope 3 categories that cannot yet be eliminated through efficiency, electrification, material substitution, or circular design.
At the same time, scrutiny is increasing. Investors, regulators, and clients increasingly expect clear evidence that offsetting complements — rather than replaces — absolute emissions reductions, and that companies use offsetting to support verified carbon projects with demonstrable impact and co-benefits.
Through the Carbonmark’s Marketplace, construction companies can access high-integrity carbon credits with full transparency, traceability, and onchain retirement, providing a clear audit trail and helping eliminate concerns around double counting. You can check our Buyer’s page for a step-by-step guide on how to buy carbon credits via our platform.
What Major Construction Players Are Doing To Reach Net Zero
Many of the world’s largest construction and materials companies have already set mid-century Net Zero targets, with clear 2030 milestones focused on deep emissions reductions.
Global contractors and developers
Skanska
Targets net-zero emissions across all scopes by 2045, including a 70% reduction in Scope 1–2 emissions by 2030 (vs. 2015) and a 50% reduction in value-chain emissions for developed projects by 2030 (vs. 2020). Its strategy prioritizes design efficiency, low-carbon materials, renewable energy, and close supply-chain collaboration.
VINCI
Has science-based targets to cut Scope 1–2 emissions by 40% by 2030 (vs. 2018) and Scope 3 emissions by 20–30% by 2030, with a long-term goal of net-zero across the value chain by 2050. VINCI aims for 90% low-carbon concrete use by 2030 and is piloting alternative fuels and innovative concrete mixes.
Mace
Claims net-zero carbon business operations since 2020 through emissions reductions combined with residual offsets. Its actions include banning diesel generators, shifting to cement alternatives, sourcing renewable electricity, and committing to ongoing annual footprint reductions.
Materials giants: cement and steel
Cemex
Targets a 35% reduction in CO₂ per tonne of cementitious product by 2030, with a long-term ambition to deliver net-zero concrete by 2050. Its strategy includes alternative fuels, clinker substitution, energy optimization, and investment in carbon capture and low-carbon products.
Heidelberg Materials
Follows a similar pathway, combining lower-clinker cements with large-scale carbon capture projects, positioning itself as a future “net-zero cement and concrete” provider.
Thyssenkrupp
Targets a 30% reduction in facility and electricity emissions by 2030, while investing in hydrogen-based steelmaking and other low-carbon industrial technologies.
Across these players, one pattern is consistent: absolute emissions reductions come first, with carbon offsets positioned as a complementary or last-resort tool.
SMEs Are Also Taking Climate Action
Net Zero action is not limited to global corporations. Small and medium-sized enterprises (SMEs) are increasingly integrating carbon accounting and offsetting into their operations.
Case study: Cubicup
Cubicup is a Spanish “neo-construction” startup headquartered in Valencia, specializing in home renovations and operating across major Spanish cities. Founded in 2017, the company aims to professionalize a traditionally fragmented renovation market through technology, transparency, and sustainability.
Key features of Cubicup’s approach include:
positioning itself as a CO₂-zero builder, calculating and offsetting the carbon footprint of renovation projects;
integrating sustainability into project management rather than treating it as an afterthought;
providing security through digital contracts, milestone-based payments, and strict timeline control.
In February 2026, Cubicup began offsetting its emissions through Carbonmark’s Marketplace, valuing the ease of use, onchain transparency, and traceability of each carbon credit retirement. This case demonstrates how climate action in construction is becoming accessible not only to multinationals, but also to agile, innovation-driven SMEs.
Conclusion: From Construction to Transformation
The climate emergency demands urgent action, and the construction industry has a decisive role to play.
With buildings responsible for up to 39% of global carbon emissions, decarbonizing the sector represents one of the most effective levers for mitigating climate change.
Achieving Net Zero will require:
deep reductions in embodied carbon,
the elimination of operational emissions, and
the responsible use of carbon offsetting for residual emissions.
The transition is already underway. From global contractors and materials giants to innovative SMEs, the industry is beginning to move — not perfectly, not evenly, but decisively — toward a lower-carbon built environment.
The challenge now is scale and speed.
