DEPARTMENT OF TECHNOLOGY MANAGEMENT AND ECONOMICS DIVISION OF SERVICE MANAGEMENT AND LOGISTICS Gothenburg, Sweden 2022 www.chalmers.se Report No. E2022:039 Circular Logistics in the Construction Industry An exploratory study based in a Swedish context Master’s thesis in Supply Chain Management ANDREAS ANDERSSON ALEXANDRA SÖDERBERG REPORT NO. E 2022:039 Circular Logistics in the Construction Industry An exploratory study based in a Swedish context Andreas Andersson Alexandra Söderberg Department of Technology Management and Economics Division of Service Management and Logistics CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2022 Circular Logistics in the Construction Industry An exploratory study based in a Swedish context Andreas Andersson Alexandra Söderberg ©Andreas Andersson, 2022. © Alexandra Söderberg, 2022. Report no. E2022:039 Department of Technology Management and Economics Chalmers University of Technology SE-412 96 Göteborg Sweden Telephone + 46 (0)31-772 1000 Gothenburg, Sweden 2022 Circular Logistics in the Construction Industry An exploratory study based in a Swedish context Andreas Andersson Alexandra Söderberg Department of Technology Management and Economics Chalmers University of Technology SUMMARY The construction industry faces great environmental challenges; the construction industry is one of the industries with the highest emission of greenhouse gases, as well as user of virgin materials. One way to reduce the environmental impact of the industry is through circular economy, which would reduce the need for virgin materials. In order to enable circular economy in the construction industry, the logistical system of the industry must be adapted. This study aspires to determine how circular logistics should be used in order to facilitate for circularity. As a result, interviews have been carried out with people who have experience from either circularity, sustainability or logistics in the construction industry. From these interviews, a network has been presented that is designed to describe the building blocks of a circular logistical network. Additionally, the main driving forces and hinders to work with circular logistics has been discussed. The study concludes that the construction industry lacks logistical performance, as well as actors with the knowledge and competence to operate in a circular logistical system. Furthermore, a circular logistics network must be constructed with the focus of keeping the value as high as possible between two construction clients. In addition, the actors that operate within the logistical network has to facilitate for larger quantities of reused materials. Finally, it must be economically viable for construction clients to adopt a more circular approach. Keywords: Circular Logistics, Circularity, Construction Industry, Environmental Sustainability Acknowledgement This report was carried out during our last semester at the master’s program Supply Chain Management at Chalmers University of Technology. It was written together with the Swedish consultancy-firm AFRY, at the division of Industrial and Digital Solutions. Together, we hope that this report will affect the mindsets of people within the construction industry to work together in a more sustainable and circular manner. Firstly, we would like to give our uttermost gratitude to our supervisor and examiner at Chalmers, Petra Bosch-Sijtsema. Thank you for contributing with your knowl- edge within our area of study, as well as for giving us constant feedback throughout the entirety of the project and for always being reachable and quick to respond to our questions and reflections. We also want to direct our gratitude to our mentors at AFRY, Jenny Olsson and Petter Wadmark. We appreciate your continuous support, your knowledge within construction logistics and your drive and encouragement to propel the project forward. Finally, we want to thank all the interviewees that used their time to contribute to our study. We are very grateful for the vast interest and support that we experienced from the participating respondents. Andreas Andersson & Alexandra Söderberg Gothenburg, May 2022 Circularity in the Construction Industry Circularity in the Construction Industry Glossary Building Permit - Bygglov Demolish - Riva Dismantle - Montera ner Inventory - Inventering Key Performance Indicators (KPI) - Nyckeltal Responsibility of producer - Producentansvar Circularity in the Construction Industry List of Figures 1 Construction Phases, modified from Projektledning (2018) . . . . . . 6 2 The Butterfly Diagram, Modified from Ellen Mcarthur Foundation (2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3 Business Models, modified from Geissdoerfer, Morioka, de Carvalho, and Evans (2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4 Actions to reduce waste, modified from Ajayi et al. (2015) . . . . . . 16 5 The role of the Gap-Exploiter, modified from Kossila (2021) . . . . . 19 6 The ARA-model, modified from H̊akansson (1987) . . . . . . . . . . 20 7 The Data Collection Process . . . . . . . . . . . . . . . . . . . . . . . 22 8 The Data Analysis Process . . . . . . . . . . . . . . . . . . . . . . . . 27 9 Activities in an ideal network . . . . . . . . . . . . . . . . . . . . . . 50 10 Resources in an ideal network . . . . . . . . . . . . . . . . . . . . . . 50 Circularity in the Construction Industry List of Tables 1 Role List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2 Interview List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Contents 1 Introduction 1 1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.1 Circular Logistics and Construction Clients . . . . . . . . . . . 2 1.2 Aim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.4 Delimitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.5 Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 Theoretical Framework 5 2.1 The Construction Industry . . . . . . . . . . . . . . . . . . . . . . . . 5 2.1.1 Construction Phases . . . . . . . . . . . . . . . . . . . . . . . 6 2.1.2 Construction Logistics . . . . . . . . . . . . . . . . . . . . . . 7 2.1.3 Legislations regarding Circularity . . . . . . . . . . . . . . . . 8 2.1.4 Building Permits . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.2 Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.2.1 The Butterfly Diagram . . . . . . . . . . . . . . . . . . . . . . 10 2.2.2 Circular Business Models . . . . . . . . . . . . . . . . . . . . . 12 2.2.3 Circularity in the Construction Industry . . . . . . . . . . . . 14 2.3 Circular Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.3.1 Gap Exploiter’s Role in Circularity . . . . . . . . . . . . . . . 17 2.4 Network Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.4.1 Characteristics of a Business Network . . . . . . . . . . . . . . 19 2.4.2 The ARA-model and Network Analysis . . . . . . . . . . . . . 20 3 Methodology 22 3.1 Collection of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.1.1 Interview Process . . . . . . . . . . . . . . . . . . . . . . . . . 23 3.2 Analysis of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.3 Ethical aspects of Methodology . . . . . . . . . . . . . . . . . . . . . 27 3.4 Trustworthiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 4 Result and Analysis 30 4.1 Challenges within the Construction Industry . . . . . . . . . . . . . . 30 4.1.1 Logistical Challenges in the Construction Industry . . . . . . . 31 4.1.2 The Human Factor in Construction . . . . . . . . . . . . . . . 31 4.1.2.1 Lack of Knowledge and Competence . . . . . . . . . 32 4.2 Prerequisites for Circular Material flow . . . . . . . . . . . . . . . . . 33 4.3 Actors in Circularity . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.3.1 Gap Exploiters . . . . . . . . . . . . . . . . . . . . . . . . . . 37 4.3.2 Producer’s Role in Circularity . . . . . . . . . . . . . . . . . . 38 4.3.3 Information Flow between Actors . . . . . . . . . . . . . . . . 39 4.4 Digitalisation in Construction . . . . . . . . . . . . . . . . . . . . . . 39 4.5 Driving Forces for Circularity . . . . . . . . . . . . . . . . . . . . . . 41 4.5.1 Economical versus Environmental Driving Forces . . . . . . . 41 4.5.2 Laws and Regulations as a Driver and Hinder for Circularity . 42 4.5.3 Material Shortage as a Driving Force . . . . . . . . . . . . . . 43 5 Discussion 44 5.1 Planning for Circularity . . . . . . . . . . . . . . . . . . . . . . . . . 44 5.2 Drivers and Hinders for Circularity . . . . . . . . . . . . . . . . . . . 46 5.3 The Potential of Digitalisation . . . . . . . . . . . . . . . . . . . . . . 47 5.4 Network analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 5.4.1 Construction Clients . . . . . . . . . . . . . . . . . . . . . . . 51 5.4.2 Gap Exploiters . . . . . . . . . . . . . . . . . . . . . . . . . . 51 5.4.3 External Influential Actors . . . . . . . . . . . . . . . . . . . . 54 5.5 Academic Contribution of Report . . . . . . . . . . . . . . . . . . . . 55 6 Conclusion 56 6.1 Future studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 References 63 Appendix I A Interview Questions I Circularity in the Construction Industry 1 Introduction The construction industry is facing a number of challenges regarding environmental sustainability, which includes the high levels of transportations and waste that are common in construction projects (Enshassi, Kochendoerfer, & Rizq, 2014). Accord- ing to Josefsson and Saukkoriipi (2005), the average level of waste in a construction project related to resources adds up to more than 10% of the total construction cost of the project. Additionally, according to a report by Boverket (2021), emissions of greenhouse gases from the construction industry during 2019 represented more than 20% of the total level of emissions in Sweden. Since 1 January 2022 the Swedish Par- liament has decided to introduce a requirement for a climate declaration which force actors in the construction industry to reduce the environmental impact from their operations (Boverket, 2022). It is possible to reduce this impact through the use of circular logistics, as this has the potential to reduce the level of “virgin materials” used (King, Burgess, Ijomah, & McMahon, 2006). This study will investigate how circular logistics could be used to lessen the environmental impact from construction projects. This chapter gives a brief description of the background, aim and delimitations for this project. In addition to this, the research questions will be derived from the project’s aim. These questions form the base, and the report aims to answer these questions. 1.1 Background As of today, the construction industry faces great challenges regarding environmen- tal sustainability. According to World Economic Forum (2016), the construction industry is the industry that globally uses the most virgin material. One way that has the potential to reduce the impact of the construction industry is the use of circular logistical flows. Today, there is a lack of existing flows and methods to fa- cilitate circular logistics and recycling within the construction sector; it is estimated that between 70-80% of the waste within the construction industry is not recycled (World Economic Forum, 2016). In those cases where circular flows exist, there is often a lack of coordination between different actors. Moreover, an increase in circularity would create new challenges on both new and existing actors (Adams, Osmani, Thorpe, & Thornback, 2017). Incorporating a higher level of circular pro- cesses could increase the ability for the industry to be more sustainable (Barthrope, Robbins, & Sullivan, 2010). World Economic Forum (2016) argues that even small changes throughout the industry could have big impact on global environmental sustainability, as a result of the size of the industry. The report will investigate what must be done from a logistical perspective in order to enable circularity in the construction industry. The report will map how circular logistical flows are designed today and look at what the client of a construction 1 Circularity in the Construction Industry project can do to enable these flows to be improved in order to reduce waste and improve sustainability. This mapping will be done with regards to the construction sector. 1.1.1 Circular Logistics and Construction Clients To be able to identify a holistic concept that is relevant for the study, the defini- tion of circular logistics has to be derived from various sources and closely related concepts. To start off, the broader term of circular economy must be characterized. According to Stahel and MacArthur (2019), circular economy is when a traditional linear economy is changed to create value from the products that are depleted in the view of the end-customer. These products can for instance be reused in the current state, refurbished or recycled. In addition to this, Kossila (2021) describes that a circular material flow is when the remaining value of a product, that has been used by a consumer, is captured in such a way that a new product assumes the value of the old one. Traditionally, supply chains were focused on delivering products downstream, from producers towards consumers. In recent years however, the characteristics of supply chains have changed (Fleischmann, Dekker, Inderfuth, & Wassenhove, 2004). Even though the main focus of supply chains is still to deliver to customers, supply chains have increased the focus on the reversed flow of goods, from the consumer back to the producer. Fleischmann et al. (2004) describe that in the practice of reverse logistics, the products that are returned to the producer still have sufficient value to be able to be used in a different supply chain. Based on the concepts that have been presented in this section, circular logistics will be defined as ”the logistical processes that enable value to be captured after a product has been used, in order to benefit new products”. The report will be rooted from the viewpoint of the construction client. Kamara, Anumba, and Evbuomwan (2002) describe that the construction client conceptual- izes a construction project, meaning that the client stipulates the characteristics of the project. As a result of the construction client having mandate and authority to affect construction projects, it is practical and reasonable to approach the issue of circular logistics from the perspective of the client. 1.2 Aim The aim with the report is to, from the perspective of a client within the construction sector, determine how circular logistics can be beneficial from an environmentally sustainable point of view. In addition to this, the report aims to determine which factors are essential for the client to enable a successful implementation of circular logistics. 2 Circularity in the Construction Industry 1.3 Research Questions As been described, there is a potential to increase environmental sustainability through the use of circular logistics. To get a better understanding how this can be done in the construction industry, three research questions have been formulated. These questions are formulated to investigate the issue from a client’s point of view. First of all, an understanding of the current situation is required (RQ1). Secondly, what is needed to accomplish a sustainable circular logistic flow will be identified and analyzed (RQ2). The last research question (RQ3) aims to investigate the driv- ing forces and hinders of using circular logistics in order to achieve a higher level of environmental sustainability from the client’s perspective. RQ1: What does the current state look like from the client’s point of view regarding circular logistics? RQ2: Which factors are needed to enable circular logistical flows in the construction industry? RQ3: What are the driving forces and hinders of circular logistics from the client’s point of view? The research questions are derived with the intent to develop an understanding about how to design a logistical network in order to allow for circularity in the construction industry. They have been designed with the intent to specify for a construction client how circular logistics should be used in order to increase envi- ronmental sustainability. 1.4 Delimitations In this section, a number of delimitations to the report are presented. The delim- itations are designed to both make sure that the report provides relevant results with regard to the aim, but also to fit the time constraints that are applied on the project. As a result of that, the report will focus on environmental sustainability as the main driver for circular logistics. This means that the study first and foremost concentrate on how circular logistics affects the environmental dimension of a con- struction project. Even so, economic and social aspects may still be factors that are important for the client of the project, meaning that these dimensions may also be considered in the report, albeit not to the same extent. The report is not discussing bulk-goods and very large goods like frames of buildings, as the logistical flows for these types of goods to some extent is different compared to other goods used for construction. These goods has not been discussed frequently in the interviews, and in cases where they have been discussed, it has been clear that the logistical operations in these cases have too little in common with other types of goods needed for the construction industry. 3 Circularity in the Construction Industry The aim with the report is not to develop new digital tools or solutions which could be used to simplify circular logistics for a client. Even so, development of current tools and solutions could be considered as an important factor to allow for better circular logistics and could therefore be a part of the solution. Finally, the report will take place in a Swedish context. This means that the aspects of the project and the actors that will take part in the study all operate within the Swedish market. This does not limit the involvement of international actors though, since the Swedish construction sector frequently consists of several actors from different countries. 1.5 Outline This master thesis consists of six chapters, with several subheadings (which also will be called sections throughout the report), with the following structure: The first chapter gives a broad overview and understanding of the challenges the construction industry faces from an environmental sustainability perspective. The second chapter, theoretical framework, present relevant literature that will be used as a support both when it comes to structure and plan the interviews but also to analyze the result and provide a good basis for the discussion. The third chapter, methodology, gives a deeper understanding of the working process and applied methods that have been chosen to reach insights that can further leads to answers and conclusions to the research questions. The fourth chapter will present the results, followed by a fifth chapter consisting of the discussion. Finally, the sixth and last chapter present the conclusions of the thesis. 4 Circularity in the Construction Industry 2 Theoretical Framework In this chapter, relevant theory will be presented with the aim to give a brief back- ground of the subject together with theory that later will support the discussion and contribute to relevant conclusions. The chapter will start with a section presenting where the construction industry is today, the different phases of the construction in- dustry and some important definitions. This will be followed by a section containing some framework grounded in sustainability that will contribute to a deeper discus- sion. The third section will explore the concept and definition of circular logistic and lastly, a section of network perspective will be presented. 2.1 The Construction Industry Fundamentally, the construction industry deals with designing, constructing, main- taining and repairing buildings and infrastructure (Behm, 2008). The construction industry differs somewhat across different countries. Since the report has a Swedish focus, this section will primarily consider the characteristics of the Swedish con- struction industry. Primarily, this section will focus on how the logistics around a construction project are designed. In this report, the construction client’s (sometimes just called client) perspective is the main focus. To make the report less unambiguous, the client as a concept will be defined. Since the report is set in a Swedish context, the Swedish concept of ”Byggherre” will be used as the definition of a client. The concept is translated by the Swedish industry organization ”Byggherrarna” to ”construction client” (Byg- gherrarna, 2019). According to Swedish law, a construction client is someone who for their own sake carries out, or lets someone else carry out, a construction project such as building, demolition or groundwork (Sveriges Riksdag, 2010). A client could either be a physical person or a juridical person, such as a company or a munici- pality. The client is responsible for that the processes that are carried out during the construction project follows the laws and regulations that are in place for the concerned area. One of the main features of the construction industry is its complexity. Brockmann and Kähkönen (2012) describe that the approach to a project can be vastly different in terms of what resources are needed depending on the projects level of complex- ity. This implies a high level of uniqueness regarding the selection of processes that are involved; Barthrope et al. (2010) describe that there is often an ad hoc- attitude within construction projects. Koskela (1999) compares the construction industry to a car manufacturer, and argues that a car manufacturer has a number of workstations, where each is dedicated and optimized for a single task, whereas in a construction project, all tasks must be carried out at a single site. 5 Circularity in the Construction Industry 2.1.1 Construction Phases Even though construction projects differ, and the sets of actors varies, there are a few stages and parts that will remain the same in the construction process. Generally, the construction process can be divided in four phases: the initiation phase, the design phase, the construction phase and lastly the closeout phase (Projektledning, 2018). This is visualized in figure 1. Figure 1: Construction Phases, modified from Projektledning (2018) The initiation phase contains estimations of which experts that are necessary to be able to highlight the different challenges and risks that may occur related to the project (Klinger & Susong, 2006). This phase is about gain insight of the project and map all possible challenges to foresee eventual problems that can contribute to delays and overheads. Through the experts, surveys and suggestions for measures can be made (Klinger & Susong, 2006; Projektledning, 2018). In the design phase, it is first of all necessary to select a project manager to be able to carry through the phases at the best possible way (Projektledning, 2021). In the initiation phase, all the needed data are gathered, and is subsequently in the design phase used as a basis for requesting quotations from external partners. In the design phase, drawings and documents about the project are developed (Klinger & Susong, 2006). The design phase gives both the property owner and the customer the infor- mation they need regarding the project in order to be able to further take decisions about the project design and implementation. During the design phase, several de- cisions are made based on the documents that have been produced. This may, for example, be about the construction design and technical standards (Projektledning, 6 Circularity in the Construction Industry 2021). The construction phase consists of several parts beyond the actual construction itself, as the administrative work around the project, inspections, financial parts, cost calculations and review of documents etc. When the construction has been carried out, the closeout phase remains. This phase consists of handing over documents, drawings and instructions of care and service (Projektledning, 2018). 2.1.2 Construction Logistics The construction industry place special demands on a logistical system. Janné (2020) describes that there is a continuous demand for construction projects with the increasing urbanization that currently is ongoing. Conversely, the increased urbanization also reduces the remaining available land in the city, meaning that a new construction project has to rely on ever smaller spaces for unloading trucks and storing material. In addition to this, environmental laws and noise pollution are factors which may limit the use of transportation to and from the construction site (Henke & de Serves, 2007; Lumdsen, 2007). Ying, Tookey, and Seadon (2018) describe that the construction industry is based on projects, which means that each construction project is at least to some ex- tent unique. The logistical system must as a result be adapted to fit the special conditions that each project requires. Therefore, there is also often an impromptu attitude to logistics; since most projects often differs and are not the same, the lo- gistical attributes are often tailor-made for that specific project. Barthrope et al. (2010) highlight the importance of planning and designing a plan for the execution of construction logistics for a specific project at a early stage; even though the material flows in a construction projects only are present during the construction phase, the success of these flows are usually decided by the calibre of the logistical planning during the phases prior to the construction phase. Traditionally, Just-In-Time deliveries have been a central part of construction logis- tics (Barthrope et al., 2010). Akintoye (1993) describes the complexity of Just-In- Time in the construction sector; a high number of components and parts are needed to complete a project. Some components are assembled in a factory to create prefab- ricated sections. Other components and parts are used with the intent to be used in a manufacturing process directly at the building site. Additionally, Akintoye argues that several other factors also affect the complexity of the Just-In-Time deliveries; ordered quantities, the supplier of materials and the distribution system of material are also important factors. Sundquist, Gadde, and Hulthén (2017) argue that the construction industry is lag- ging behind other industries from a logistical point of view. Sundquist et al. mean that the industry is lacking in productivity, and that the lack can partially be ex- plained with a low efficiency in material flows. Additionally, Adams et al. (2017) 7 Circularity in the Construction Industry argue that the uniqueness of projects is a factor that lowers the logistical efficiency within the industry. According to Sundquist et al. (2017), storing capacity at construction sites is an issue, as construction projects often take place in an environment with limited space. Furthermore, Sundquist et al. argue that sometimes, more material than necessary are ordered to cover for potential shortage of materials, which consequently leads to more space on the building site being used for storage, as well as a higher risk of damage of materials. Sundquist et al. (2017) describe that to solve these issues, the industry has to become even better at planning and be more efficient at material handling, as this could reduce the need for ordering too much material. In addition to this, Barthrope et al. (2010) argue that by using consolidation centers, the impact of some of the logistical problems can be reduced. Instead of delivering directly to the construction site, the trucks transport the goods to the consolidation centre. The centre does also operate as a storing facility for materials that are not yet needed at the construction site. Additionally, by using a consolidation center, the number of deliveries to a construction site are reduced, as materials from different sources are delivered together (Dreischerf & Buijs, 2021). This reduces the pressure on the unloading facilities of the construction site. Since the consolidation centre will be used for storing material, less materials need to be stored at the construction site, which frees up space and makes it less likely that goods are damaged at the construction site (Barthrope et al., 2010). Another subject that needs to be addressed is the issue regarding waste management. The waste can both origin in demolition work of older buildings and as residual ma- terial from the project (Liyin & Hongping, 2011). Overall, the construction industry generate high level of waste; Nowak, Steiner, and Wiegel (2009) describe that the construction industry produces between two and five times more waste than all Eu- ropean households combined. Barthrope et al. (2010) describe that in construction, there are often numerous types of wastes that are required to take care of. Some materials, like wood and paper, can be recycled, whereas other materials cannot. In addition, certain materials used are classified as hazardous, meaning that special care needs to be taken while handling these. The fact that different conditions apply for different materials means that a company that handles waste at a construction site has to be flexible and able to handle different materials. Since projects usually do not look exactly the same, the waste management of each construction project will be at least to some extent tailor-made to fit the materials and the layout of the construction site. 2.1.3 Legislations regarding Circularity In recent years, a number of changes in various laws have been made by the Swedish government within the area of construction logistics to promote environmental sus- tainability. After the year of 2020, it became mandatory to sort out and recycle 8 Circularity in the Construction Industry a minimum of six different fractions in a construction project (Sveriges Riksdag, 2020). These fractions are wood, minerals, metal, glas, plastics and plaster. It has also been stated that these materials have to be kept and transported in different containers, and that the sorted materials is not allowed to be incinerated. Addition- ally, in 2010 it was decided that when a demolition is carried out, the construction client is obliged to carry out an inventory of the materials of the building that is to be demolished (Sveriges Riksdag, 2010). The client is required to identify which materials in the building that is supposed to be demolished that can be reused. Furthermore, it must also be stated how these materials are supposed to be taken care of. As a mean to try and reduce the environmental impact of a number of manufac- tured goods, the Swedish government has stipulated a number of laws regarding the responsibility of the producer of these goods. The laws are different depend- ing on what type of material that is regarded, but it is common that they demand the producer of a product to be responsible for the collection of used products and for making sure that the products are taken care of in an environmentally correct manner (Kossila, 2021; Maja Larsson, 2006). As of today, the materials tradition- ally used for construction are not covered by any laws regarding responsibility of the producer, even though discussions on the subject have been proposed in the Swedish government (Naturv̊ardsverket, 2022; Riksdagen, 2018). 2.1.4 Building Permits In order to carry out the majority of larger construction and renovation projects in Sweden, a building permit is required. The application for a building permit is sent to the municipality in which the construction project is taking place and it is the building committee of the municipality which approves the application (Gustafsson, 2015); (Sveriges Riksdag, 2010). The committee takes a decision based on a number of factors, which includes how the building fits in the city and the environmental impact that the building has (Rasmusson, 2018). The application should contain information necessary for being able to make a decision regarding the application (Sveriges Riksdag, 2010). 2.2 Sustainable Development In the 1980s the Norwegian Prime Minister Gro Harlem Brundtland defined sus- tainable development as “Meeting the needs of the present without compromising the ability to future generations to meet their own needs.” This means that com- panies should always strive to operate in ways that secure economic performance in the long-term by avoiding short-term behavior that contribute to environmental waste and socially detrimental effects (Porter & Kramer, 2006). An important part of the sustainable development is Circular Economy, which partly 9 Circularity in the Construction Industry is seen as a solution to the different challenges to achieving a sustainable development (Geissdoerfer, Savaget, Bocken, & Hultink, 2017). A circular economy or economic system that strives to minimize the use of resources to reduce the amount of waste, emission and energy will result in a reduced environmental impact (Geissdoerfer et al., 2018). According to Geissdoerfer et al. (2018), an important aspect of the circular economy is to transfer and involve private business to a more sustainable system and create a network with extended value. One key for organizations to successfully accomplish these changes, transfer from private business to a network system, is with the help of a business model. According to the European Commission (2014) a circular economic system preserves the value in the product as long as feasible and tries to reduce waste. This results in that the resources is kept within the economy and can be reused even when the product has reached its life span. As mentioned earlier, this is achieved by minimise the consumption of resources which is done by recycling of materials and energy to avoid leakage out of the system. This is also highlighted in the butterfly diagram by Ellen Mcarthur Foundation (2013) which will be presented further in the following section, section 2.2.1. 2.2.1 The Butterfly Diagram Ellen Mcarthur Foundation (2013) discusses the circular principles which describes how to reduce unnecessary exploitation of resources and maintain the value within the raw materials and resources used. The different ways of keeping the value and extend the resources lifetime is by Ellen Mcarthur Foundation symbolized in a but- terfly diagram, figure 2. The purpose with the diagram is to minimize the ”leak” that occurs, since the leakage represents a loss of value that was previously con- tained in the system. As a result, this lost value will have to be replaced by new raw materials. The central part of the butterfly diagram, figure 2, is in essence a traditional linear economy; raw materials enter the system at the top, from where they are used to manufacture parts and components. These parts and components are then used to create products, which are delivered to customers through service providers. Each of these steps requires energy and resources in order to add value to the product (Kossila, 2021). This means that the closer the product is in regard to the consumer, the higher is the value that can be attributed to the product, and a lower level of energy is required to transform it from its current state to a finished state (King et al., 2006). In a traditional linear economy, it is not uncommon for the products to be deposed after being used by the consumer. In a circular economy however, the product is in one way or another reused to capture its remaining value. Ellen Mcarthur Foundation (2013) expresses that the two ”butterfly wings” in figure 2 represents the two ways that material can be reused in a circular system. Since energy is needed to add value, it is more preferable to use a smaller cycle where 10 Circularity in the Construction Industry materials do not need to go through more value-adding steps in order to be able to be used by a consumer again (King et al., 2006). Figure 2: The Butterfly Diagram, Modified from Ellen Mcarthur Foundation (2013) The left side of the model describes the cycle of biodegradable materials. This section of the diagram will not be used in this report and is therefore transparent in figure 2. The right part of the diagram describes the technical cycle, which contains of materials that are not biodegradable, such as different types of metals and plastics (Ellen Mcarthur Foundation, 2013). These materials can be reused in several different ways. In the diagram, it is more beneficial to follow a smaller circle, as this is more energy-conservative as a smaller number of value-adding operations need to be carried out (King et al., 2006). On the right-hand side of the diagram, the smallest loop represents operations that aim to prolong and repair products during within the scope of a single owner. Following this, reusing a product creates the second smallest loop, as no value-adding operations are necessary between two different users of a product; the product is used in the same state by both users and the only operation that needs to be carried out is the transportation and reselling of the product. The next way to reuse non-biodegradable materials is through re-manufacturing (Ellen Mcarthur Foundation, 2013). Compared to repairing and prolonging actions that creates the smallest loop in the diagram, the process of re-manufacturing re- quires more energy and resources, meaning that it is preferable to do maintenance in a preventive cause to avoid re-manufacturing in as large extent as possible (King et al., 2006). With this said, a re-manufactured product requires way less energy than a new one; Southern Waste Region (2021) argues that, for construction products, roughly 50-80% less energy is needed to re-manufacture a product compared to the 11 Circularity in the Construction Industry energy required to make a similar new product. The final loop on the right-hand side of the Butterfly Diagram, figure 2, is the recycle-loop. Out of all the methods available for regenerating non-biodegradable materials, recycling is the one where the material has the lowest value when it re- enters the system, and therefore requires the most energy to make it utilizable in a new product for a consumer (King et al., 2006 & Ellen Mcarthur Foundation, 2013). To summarize, the butterfly diagram is used to display and categorize the various ways that materials and products could be circulated (Ellen Mcarthur Foundation, 2013). The diagram describes how value is kept within a system. Through the usage of the diagram, it is possible to distinguish how the life of resources should be extended, and how leakage in a system is minimized. 2.2.2 Circular Business Models A business model takes its starting point from the core of the company and how it creates value for its customers. It describes how the company is structured and how it should create revenue, produce a product and be able to deliver to the customers (Kossila, 2021). The development from a traditional business model to a sustainable business model includes a more long-term perspective from a sustainable point of view. Here, a sustainable point of view means that the company starts to identify the value it creates for its environment and its step towards a circular business model. In a circular business model, the company start acting in the sense of securing that the products contribute to the reduction of the use of resources (Kossila, 2021). How the different states of business models relate to each other are visualized in figure 3 by Geissdoerfer et al. (2018) and is later used in the literature by Kossila (2021). In this framework, figure 3, the development to reform a business model towards a sustainable business model is categorized by three elements, sustainable value creation, more proactive management of a more comprehensive set of stakeholders and a long-term perspective (Geissdoerfer et al., 2018). Sustainable value creation starts by reviewing the sustainability in the business and its activities. It could for example be to search for an opportunity to decrease the number of transports with the aim to reduce emissions. The other two elements aim to increase the awareness of how the business and activities influence the environment and what value it creates for the society in which it operates. Nevertheless, the two latter elements are done on a more long-term perspective and a proactive approach is applied in consideration to more stakeholders (Kossila, 2021). Geissdoerfer et al. (2018) describe how the concept of circular business models came from the combination of challenges with implementing circular economy into the real world and the practice-oriented strategy of business model innovation. Circular business models are often used to describe business models that are in line with the circular economy by incorporating elements that narrows, slows, and closes resource 12 Circularity in the Construction Industry loops, which is visualized in figure 3. This means that the company makes sure that the used material continues to circulate through resource loops to extend its life span. A circular business model is built on resource loops that maintain the value of materials and resources (Kossila, 2021). Closing loops comprises measures aimed at enabling recycling, while narrowing loops represents measures taken to increase efficiency. Additionally, slowing the loops is equal to extension of phases in a circular economy. These loops refer to the biological and technical cycles of the circular economy by Ellen Mcarthur Foundation (2013) & Geissdoerfer et al. (2018). It is important to develop a value network with stakeholders that are driven and have the motivation to contribute to environmental benefits, economic viability and social concerns to be able to have a successful circular business model characterized by value creation (Geissdoerfer et al., 2018). Figure 3: Business Models, modified from Geissdoerfer et al. (2018) The driving forces to move from a traditional business model towards a more circular business models where the company adopts circularity differs. According to Kossila (2021), an early adoption to a circular business model could be a driving force for the company to become a role model at the market. It could also be about open up new business opportunities, economic benefits, requirements from customers or the ability to secure the assets to valuable raw materials. As illustrated in figure 3, a circular business model can be defined as a sustainable business model which also aims at establishing solutions for sustainable develop- ment by creating monetary and non-monetary value. This is done by pro-active management consisting of several stakeholders and incorporating a long-term per- spective that strives for circular economical solutions through circular value chains 13 Circularity in the Construction Industry (Geissdoerfer et al., 2018). 2.2.3 Circularity in the Construction Industry Andersson, Moberg, Gerhardsson, and Lindholm (2021) argue that, even though the construction industry has started to look at and discuss issues regarding circularity, there is still a lot to be done; only about a third of the potential of circularity in the construction industry is actually exploited today. Admittedly, Andersson et al. (2021) argue that the potential for circularity is very high; by incorporating circularity in the construction industry, companies are not only able to decrease their level of waste and greenhouse gases, but also have a positive impact on the brand of the company. However, the authors argue that there is plenty still to be done to increase circularity and that actors in the industry need to be educated in order for them to realize the full potential of the benefits of circularity. Andersson et al. (2021) argue that there are a number of practical issues that must be addressed when working with circularity in the construction industry. Firstly, Andersson et al. argue that it is important to have a clear structure on the construc- tion site and that the material flows are clear for everyone. Additionally, the authors argues that the division of responsibility between different actors at a construction site is key and that it should be very clear who has the responsibility for certain processes or materials. Connected to this is also the question of material handling; the materials should be handled with a methodology that is aimed at not destroying or damaging materials within the circular processes and that all concerned actors, both in terms of dismantlers but also transporters and other actors, are synchronized in order to reduce the risk of damaging materials. Finally, actors should be aware of the time aspect of circularity and that there might be a substantial time until there is demand for a specific material. This puts special demands on actors that keep materials in storage. Ajayi et al. (2015) present a number of actions to take in order to be able to decrease the waste within the construction industry, which can be seen in figure 4. Firstly, Ajayi et al. (2015) argue that it is important to take the entirety of a building into consideration when planning for waste reduction. They argue that buildings should be designed in order to allow for being able to be dismantled, in order to reuse the material from the building and in such way reduce the waste at the end of the life of a construction project. This can be contrasted by the argumentation by Munaro, Tavares, and Bragança (2020), who argues that, as of today, there is a lack of incentives to design buildings in order for them to be able to be dismantled at a later stage. Following this, Ajayi et al. (2015) describe that BIM-models could be used to decrease the levels of waste in a construction project. BIM, or Building Information Model, is a model used to represent and visualize objects within a construction project (Jongeling, 2008). Ajayi et al. (2015) argue that the construction industry is shifting ever more towards BIM-models, and that waste management solutions 14 Circularity in the Construction Industry therefore must be more compatible and integrated with BIM-models. Another way to reduce the need of waste is through legislative measures; Ajayi et al. (2015) describe that a frequently used measurement by governments around the world is to make companies liable for their waste by introducing fees that corresponds to the level of waste that a specific company produces. Additionally, law makers could design a system where waste reduction as a concept must be incorporated in the design phase of a project, which according to Ajayi et al. is a stage where a lot can be done regarding reduction of waste. Munaro et al. (2020) agree that lawmakers has a great responsibility and argue that law incentives are crucial when moving towards circularity. Additionally, Ajayi et al. (2015) argue that waste can in many cases be erased during the planning phase of a construction project. For instance, standardisations of buildings and processes could be used in order to reduce the ability of having material that are not optimized for specific construction projects, and therefore reducing the risk of waste in the form of off-cuts. In addition to this, Ajayi et al. (2015) also argue that researchers have a vital role in the reduction of waste; there has to be more R&D carried out into strategies regarding waste management. Subsequently, the knowledge of these strategies needs to be communicated to actors in the industry, meaning that there is a need to increase the education within the industry. Finally, Ajayi et al. (2015) describe that it is important for the usage of circularity to be economically viable, meaning that the economic benefits that reducing waste provides should be greater than the additional cost that comes with waste minimizing. Practically, this means that actors in the industry would strive towards waste reduction, as they would see economic benefits from reducing waste. Sezer and Bosch-Sijtsema (2020) mentioned a number of issues that may occur in the process of refurbishment in the construction industry. One issue mentioned by the authors were the limitations of space that is common at construction sites, espe- cially in densely populated areas. This lack of space hinders the easiness of sorting recycling, as the containers and equipment may not be available to the extent needed as they require space. Additionally, Sezer and Bosch-Sijtsema argue that there is a lack of standardised approaches to refurbishment, as the differences in refurbish- ment processes may vary to a great extent. The lack of knowledge of construction clients could be a factor that limits the refurbishment process in the construction industry. Lack of knowledge meant that clients did not make specific demands for refurbishment to a great extent, which makes it hard to gain an understanding of the requirements of the client in terms of refurbishment (Sezer & Bosch-Sijtsema, 2020). 15 Circularity in the Construction Industry Figure 4: Actions to reduce waste, modified from Ajayi et al. (2015) Kovacic, Honic, and Sreckovic (2020) argue that digitalisation can have a positive impact on circularity in the construction industry from various perspectives, which includes BIM-models, material passports containing specific information about a material and data from inventories. Furthermore, Benachio, do Carmo Duarte Fre- itas, and Tavares (2020) argues that it is beneficial to store data about material in specific passports, where it is stated how a material has previously been used, which could help to incorporate the material in future projects. In addition, Konietzko, Bocken, and Hultink (2019) describe that, in order to increase circularity, it would be beneficial to introduce a digital platform where supply and demand from buyers and sellers could be met. This would slow down the speed of resource loops, resulting in reduced need for virgin material. 2.3 Circular Logistics In section 1.1.1, circular logistics has been defined as ”the logistical processes that enable value to be captured after a product has been used, in order to benefit new products”. This section will first present some of the concepts related to circular logistics that exists today and the difference between them. The last part of the section will focus on the logistical processes behind the definition of circular logistics and how they enable circularity. 16 Circularity in the Construction Industry A common building block of circularity in logistics is the concept of reverse logistics. Bernon and Cullen (2007) describe that the importance of reverse logistics was highlighted as online retailing grew bigger. Additionally, shorter product life cycles and changes in return policies are also factors that increased the usage of reverse logistics. Bernon, Tjahjono, and Ripanti (2018) argue that reverse logistics may also be used as an enabler for circularity. To allow for this, it is important to involve values and ideas of circularity in the reverse logistic process; actions that permits circularity, such as processes aiming at refurbishing and reusing products, can be incorporated directly in the reverse logistics-flow (Ripanti & Cullen, 2019). As of today, two frequently used terms are Supply Chain Management (SCM) and Circular Supply Chain Management (CSCM). Supply chain management is depen- dent on the organization’s network since the resources and skills are spread out on several actors in the network. From a sustainable perspective, a strong collaboration network tends to be crucial when it comes to improve the sustainability performance. Therefore, it is an important part of the organizations business model and are crucial in the transformation towards a circular economy (Geissdoerfer et al., 2018). Geissdoerfer et al. (2018) define the concept circular supply chain management as the term that contains configuration and coordination of the supply chain to close, slow, narrow and dematerialize the resource loops. Both supply chain management (SCM) and circular supply chain management (CSCM) aim to achieve operative effectiveness and efficiency and strives for the competitive advantages. Circular supply chain management, unlike supply chain management, also aims to minimising the input in form of material and energy meanwhile waste and emission leakage are reduced. (Geissdoerfer et al., 2018). 2.3.1 Gap Exploiter’s Role in Circularity As circularity involves more than one user to have a sequential possession of a product, or for a refurbishment in the middle of a person’s ownership of a product, there is a need for an actor to take the intermediator-role (Kossila, 2021). A Gap- Exploiter allows for the remaining value of a product to be increased or transferred to a new user (Harjula, 2016). This means that a product which was discarded by a user can be circulated and used by another user, instead of being disposed. In section 2.2.2, the various ways that a product could be reused were presented. The Gap-Exploiter is usually specialized at one of these roles; the Gap-Exploiter may for instance refurbish a specific type of product, or provide a platform for reselling products (Kossila, 2021). The purpose with these operations is to increase the value of a used product to a level where it could be reused by the next product owner. However, no matter if a product can be resold or if it has to be repaired, someone has to intermediate between the previous and following user. In figure 5, the role of the Gap-Exploiter is presented (the Gap-Exploiter’s role is here represented by the 17 Circularity in the Construction Industry dashed square). 18 Circularity in the Construction Industry Gap Exploiter New Product User Waste Used ProductCirculated Product Refurbish Repair Renovate Figure 5: The role of the Gap-Exploiter, modified from Kossila (2021) 2.4 Network Perspective To be able to systematically analyse the logistical characteristics of the construction industry, a network perspective is used. More specifically, the network perspective will be used for analyzing how the logistical network should be created in order to enable circularity in the construction industry on a larger scale. The aim of an industrial network approach is to analyze how the different elements are connected. Networks consists of several relationships which are connected to each other in different ways and the intermediation between them are acknowledged as crucial for the interrelations among the elements (Sundqvist, 2014). Gadde and H̊akansson (1993) argue that a change in one relationship could also affect other relationships that are not connected to the changed relationship directly. This means that a single relationship can have a great impact on many actors. On the other hand, Gadde and H̊akansson describes that the complexity of networks gives different actors multiple ways to impact and affect other actors, as there often are more than one way that two actors are connected. 2.4.1 Characteristics of a Business Network Sundqvist (2014) highlights today’s business reality where all firms are at least to some extent intermediary, as all companies have a high number of connections to business partners and their respectively resources and activities. This means that all companies in the network are supplier to some actors, while they simultaneously are customers to others. Every actor have several connections to other actors which in turn have their own connections to further actors. 19 Circularity in the Construction Industry H̊akansson (1987) describes that the design of a network may actually hinder the development of new solutions and offers. H̊akansson expresses that the relationships create dependencies between actors. A change in the offering towards a customer from an actor may require that specific actor to get access to new resources, which may demand other resources than what can be acquired in the current network. Therefore, the network might have to be changed. H̊akansson (1987) describes that changes in relationships always comes at a cost. Consequently, actors could be reluctant to do changes which have too much of a costly impact. The same type of cost could for instance also emerge if changes in interlinked activities occurs, since a high level of linkage in activities can create an interdependence. 2.4.2 The ARA-model and Network Analysis According to Gadde and H̊akansson (1993), the industrial network approach is used to describe the characteristics and design of an industrial network. One method used to map a network is the ARA-model. This model provides three components that a business network consists of, namely activities, resources and actors. A business relation is created when these components are interlinked, which can be seen in figure 6. In this report, the model will be used to create a mapping of how a logistical network would be designed to promote circularity in the construction industry. Resources Activities Actors Network Figure 6: The ARA-model, modified from H̊akansson (1987) Firstly, the model consists of activities. An activity is carried by actors, either individually or in collaboration with other actors (Gadde & H̊akansson, 1993). In 20 Circularity in the Construction Industry production, numerous activities are generally interlinked to create a chain used to add values to specific resources. Resources are also used as an instrument to carry out activities. The resources in the model are controlled by actors. Resources can be of many differ- ent versions; Axelsson and H̊akansson (1979) present five types of resources, namely technical resources, input goods, personnel, marketing resources and capital. These resources are combined to create more values to certain resources. Resources can either be controlled internally or controlled by another actor, in which case a linkage is required to that actor in order to gain control of the specific resource (Gadde & H̊akansson, 1993). With time, the structure of what resources are favorable to control within the company, and what resources are best to get from other actors, changes. This means that companies must be able to change their industrial network when other resources are required. Resources are also classified as heterogeneous; the value of a resource may vary depending on how it is used and which actor that is using it. The final component of the ARA-model are actors. As been previously described, actors are in control of resources (Gadde & H̊akansson, 1993). Resources can either be controlled by a single actor, or jointly between numerous actors. The actors uses these resources in order to carry out activities and the different actors are specialized at carrying out different activities. With these three layers (activities, resources and actors) it is possible to map and analyze the function of a logistical network. To conclude, the ARA-model is a way to map a business network and its attributes (Gadde & H̊akansson, 1993). In this repoer, it will be used to display how the logisti- cal network could be designed in order to facilitate for circularity in the construction industry. 21 Circularity in the Construction Industry 3 Methodology For this report, a study has been carried out which has been classified as qualita- tive. A qualitative methodology is generally used in non-numerical studies where a handful of cases which contains a high number of variables are studied (Wilson & Sharples, 2015). Bell, Bryman, and Harley (2019) describe that within qualitative research, it is more common to accentuate words rather than numbers in the data used in the study. A qualitative methodology allows for a study where reasoning of respondents are in focus, meaning that the way that the respondents expresses themselves regarding the asked questions is a central part of the results. In addition, the research carried out in this study has been classified as exploratory. Exploratory research is primarily used to gain fundamental knowledge regarding topics where there are limited previous studies made (Wallén, 1993). This means that exploratory research is used to gain an understanding of the main building blocks of the subject that is researched. According to Wallén, it is common practice to use an inductive method when carrying out exploratory research. When doing an inductive study, general conclusions and findings are derived from the collected data (Bell et al., 2019). Thus, theories can be built from performed research. An inductive study can be contrasted to the deductive study, where a hypothesis is formed from the current knowledge. An inductive methodology is sometimes criticized though; Bell et al. argue that the conclusions and findings presented are strictly based on the empirical data that is collected, and that the collection of data can limit the result of the study. 3.1 Collection of Data The data used to answer the research questions is in the shape of interviews, which were carried out with interviewees that are considered to have relevant experience for the study. In this section, it will be explained how the data collection was carried out. The data collection process can be seen in figure 7. Figure 7: The Data Collection Process Firstly, to complement the collected data from the interviews, and to create a base for discussion, a theoretical framework was created. The literature that was presented in the theoretical framework was derived from the research questions of the report 22 Circularity in the Construction Industry to make sure that the selected literature is adequate for answering the research questions. As the study was of a exploratory nature, some literature was also added after the completion of the interviews, as it was hard to estimate exactly which areas the respondents would consider to be important. Subsequently, the second part of the data collection is a semi-structured interview study. According to Bell et al. (2019), a semi-structured interview study uses a set of questions that are used as a framework in the interviews with all of the interviewees. It should be stated though that there is a level of flexibility to the interview process, as the questions that are used for the interviews are primarily a guide. This means that the interviewer has the possibility to ask other questions that may arise as a result of the answers that the interviewee gives. Nonetheless, even though different interviewees may receive dissimilar additional questions, the main questions are the same. This assures that the answers from the interviewees are sufficiently related to be comparable and analysable; Bell et al. (2019) describe that there has to be some level of structure to guarantee a comparability between different cases. When analysing the process of collecting data for each of the research questions, it can be seen that the first research question (RQ1) aims to get an understanding of the current state of circular logistic from the client’s perspective. The main tool for answering this question will be interviews with experts within areas suitable for answering the question. In addition to this, the literature study will be used to complement the results from the interviews. With the current state in mind, the second question (RQ2) aims to identify the different factors needed to contribute to a sustainable circular logistical flow. Similar to the case with the first research question, interviews with different actors were determined to be important. The interviews were used to further identify the different activities and resources that affect the circular logistical flows in a sustainable way. Parallel with the identification of activities and resources needed for circularity, the driving forces and hinders to work with circularity will also be identified, which refers to the third research question (RQ3). 3.1.1 Interview Process The interview guide used for this study started of with a selection of questions that intended to illustrate the previous experiences and the expert areas of the interviewee. Following this, the main section of questions asked were structured with regard to what research question or questions they aimed to answer. Finally, there were some additional questions for a specific selection of interviewees. These additional questions relates to a specific case or a specific experience that some interviewees have and which were perceived to be beneficial in order to get a deeper understanding for some of the research questions. The primary interview guide can be seen in appendix A. 23 Circularity in the Construction Industry All interviews were carried out with both team members present. One of the team member acted as the the main questioner, while the other one took extensive notes. The one taking notes was not limited to only note though; both team members were able to add questions during the interview in case they had relevant input. Bechhofer, Elliott, and McCrone (1984) claims that, with the use of more than one questioner, it is possible to get a broader discussion, where not only one person is trying to come up with suitable follow-up questions. In addition to this, having more than one questioner helps with creating an atmosphere which opens up for a discussion, meaning that it may allow the interviewee to feel more like having a conversation than being interviewed. As one of the team members took extensive notes during the entire interview, the main ideas and aspects presented by the interviewees were picked up already at this state. In addition, the interviews were recorded, meaning that a verbal transcription of the interviews were created. The reason for not doing a real transcript was that the authors considered that the time this process would take would cannibalize on time dedicated to other parts of the study, as the time frame of the project creates demand for certain compromises in the work process. The interviewees selected for the study are persons that are considered to be able to add useful insights to the report; some interviewees have taken part in projects which have attempted to incorporate circularity, while others have a more holistic view of the subject. The interviewees have different roles, presented in table 1, which will contribute to a broad view and enable for covering different perspectives on the research questions and the different challenges. The different roles are divided into three categories: project oriented, company oriented and sustainability oriented in- terviewees. The aim with this categorization is to understand the perspective the respondents answering from. This means that a project leader and manager are an- swering from their perspective from a specific project, while interviewees within the company-oriented category answer from a more holistic and extended perspective, meaning that they are not discussing the issue from the perspective of a specific project, but rather from a more central view within the company. Finally, the different roles within the sustainability category are respondents who are mainly operating within the interface between sustainability and the construction industry. Table 1: Role List Role List Project Oriented: Company Oriented: Sustainability Oriented: Project Leader CEO Environmental Strategist Project Manager Growth Manager Environmental Specialist Business Developer Coordinator of Sustainability Logistic Developer Business Area Manager Head of Sales Unit Manager Sales Manager Lecturer and Professors 24 Circularity in the Construction Industry Table 2, shows the different companies and institutes that the interviewees represent. The interviewees have been sorted into categories depending on what type of actor they are and market they operates in. The interviews carried out with LogiPlan and Logeco, as well as the interviews carried out with Linköping University, were carried out in groups. This created a possibility for the interviewees to complement each other and opened up a platform for discussion. The duration of the interviews were between 45 and 90 minutes. Table 2: Interview List Interviewee Company Date Type Category: Public Construction Clients: A1 Norra Djurg̊ardsstaden 2022-04-21 Teams A2 Municipality of Gothenburg 2022-03-24 Teams A3 Municipality of Ume̊a 2022-04-04 Teams A4 Municipality of Helsingborg 2022-04-06 Teams A5 Akademiska Hus 2022-03-28 Visit Private Construction Clients: B1 JM 2022-03-24 Teams B2 Platzer 2022-03-25 Teams B3 Vasakronan 2022-03-28 Teams Digital Tool-providers: C1 Myloc 2022-03-21 Teams C2 LogiPlan & Logeco 2022-04-01 Teams C2 LogiPlan & Logeco 2022-04-01 Teams Research Institutes: D1 IVL Svenska Miljöinstitutet 2022-03-11 Teams D2 RISE 2022-03-23 Visit D3 Linköping University 2022-03-18 Teams D3 Linköping University 2022-03-18 Teams D3 Linköping University 2022-03-18 Teams Gap Exploiters: E1 Återbruket Mölndal 2022-03-30 Visit E2 Återbruket Göteborg 2022-03-21 Visit Construction Companies: F1 PEAB 2022-03-10 Teams F2 Derome 2022-03-22 Teams The first category are actors in the public sector that act as construction clients. These actors represents public entities, which in this case includes municipalities and companies owned by municipalities. The actors have been chosen on the basis 25 Circularity in the Construction Industry that they have at least to some extent worked with or been involved in construction projects that has incorporated circularity. In addition to the interviews carried out with actors in the public sector, interviews were also carried out with construction clients located in the private sector. These actors were, just like the actors from the public sector, selected for being involved in projects that have incorporated circularity. The next group of interviewees are actors that provides digital tools designed to plan, handle and increase the efficiency of the logistical processes in construction companies. These companies were selected for their extensive knowledge about the processes and limitations of digitalisation within the construction industry. In addition to this, these actors have been working in close co-operation with companies that carries out logistical activities within the construction industry, which means that they have accumulated knowledge in this area. Additionally, representatives for research institutes that have done studies within circularity and construction logistics have been interviewed. These institutes were selected based on the research that they had made within the subject area; all of the selected institutes have explored the combination of the construction sector, logistics and circularity to at least some extent. The final category of interviewees, Gap-Exploiters, contains companies that dis- tributes reused products and materials. The companies that were interviewed here were created and driven by municipalities. The purpose for having these inter- views were to gather deeper knowledge on how the market for reused materials look. Finally, interviews were also carried out with companies within the construction in- dustry. These companies were chosen on behalf of their experience of sustainability and circularity work in the construction projects that they have carried out. 3.2 Analysis of Data After the collection of data was completed, the data has been analyzed in line with the presented research questions (the data analysis-process can be seen in figure 8). The outcome of the data analysis created the basis of the result and analysis chapter, the analysis was done with a thematic analysis. The interviews were recorded, and extensive notes have been taken throughout the interviews. The recordings, in combination with the notes, created the foundation for a code-based summary for each of the interviews. The coding has been made into different categories, based on the subject that were discussed. Bell et al. (2019) describe that, when the data is collected, the codes will emerge with regard to the information and the collector’s interpretation of the information. The codes used can for instance be based on a set of concepts or categories that are discussed in the interviews. Furthermore, codes do often have underlying sub-codes beneath, which can start to get clearer when the main code are set. This process is carried out until there is a saturation in the 26 Circularity in the Construction Industry number of codes, meaning that there are no further concepts or categories left to code. Figure 8: The Data Analysis Process When the coding for all interviews had been carried out, the different subjects that the codes represent were turned into the foundation for the result section. The codes were categorized into different subject areas, depending on what field it covered. The opinions of each interviewee have been compared for each subject area and viewpoints have been mapped in order to create a holistic representation of the regarded issues. In addition to this, relevant quotations have been collected from the recordings. These quotations were selected to represent the general attitude and outlook of the interviewees, or to highlight a specific opportunity or hinder. Since the interviews were carried out in Swedish, the quotations have been translated into English by the authors and subsequently been approved by the interviewees. Based on the result and analysis chapter have subsequently some of the most fre- quently discussed topics from the interviews been brought up for a deeper discussion by the authors in the discussion chapter. Admittedly, it was not possible to discuss all the subjects from the interviews that have been presented in the result and analysis chapter which meant that the authors needed to be selective with the sub- jects in the discussion chapter. The discussion was also supported by the literature presented in the second chapter, theoretical framework, to create credibility in the discussion and reasoning in order to later be able to draw realistic conclusions. 3.3 Ethical aspects of Methodology One issue regarding ethics in an interview study is whether the interviewees are to have anonymity or not (Bell et al., 2019). It can be hard to tell the opinions and statements of companies and people while keeping the identity hidden. Furthermore, it is not uncommon with a divergence in what level interviewees wants to be public with their identities; some may argue that it could be advantageous to be public with their opinions in certain situations. In other cases, it could potentially be harmful to not be anonymous. With this in mind, the identities of the specific interviewee have not been displayed in this report. The name of the organization, as well as the role of the interviewee, is however not anonymous unless it was asked for. 27 Circularity in the Construction Industry In addition, the interviewees were able to decline to be recorded. This was done in order to assure the privacy of the respondents in the study. In a case where the interviewee were to decline, the notes taken would be used as the sole source of information. Moreover, in order to make sure that the respondents were not misquoted and that their opinions were presented correctly, all direct citations used in the report were sent to the interviewees for approval. Hence, the respondents were able to change their quotes, if they felt like the quotes should be altered. 3.4 Trustworthiness Lincoln and Guba (1985) describe that trustworthiness should be in focus when evaluating validations of a qualitative study. From a trustworthiness point of view, there are four important factors to cover. The first factor is the credibility of the study, which is the legitimisation of the results from the respondents’ point of view. In this study, the credibility were verified through having the quotations used being double-checked by the interviewees. In addition to this, information that were per- ceived as unclear were discussed again at a later point with a respondent, as a mean to assure that the interviewers have a correct understanding. Secondly, Lincoln and Guba (1985) argue that in a qualitative study, the results need to be transferable to contexts other than the one in which the study took place. Nowell, Norris, White, and Moules (2017) argues that the researcher is unable to know which areas someone is seeking to transfer the results to. In order to enable this transfer though, the researcher should provide as much of a description of the results as possible. The third part of trustworthiness regards dependability (Lincoln & Guba, 1985). Nowell et al. (2017) describes that a high level of dependability is achieved when the study is logical and traceable for a third-party reader. In addition to this, Nowell et al. argues that audits can be used in order to achieve dependability. For this report, the result provided from interviews were discussed in close cooperation with the supervisors of the project to assure that the results were clear and logical. The final aspect of trustworthiness according to Lincoln and Guba (1985) is con- firmability. This aspect describes how the interpretations and analysis of the data has been derived by the authors of the report. Bell et al. (2019) describes that confirmability is achieved by making sure that personal values and opinions are left out through the report, meaning that only ideas and thoughts that can be derived from the collected data is included, even though it is impossible to achieve com- plete objectivity when carrying out qualitative research. In this report, to limit the impact of personal values both authors were allowed to independently analyse the interviews. Lincoln and Guba (1985) describes that, in addition to the four presented aspects which together creates trustworthiness, authenticity is also an important factor when 28 Circularity in the Construction Industry validating a qualitative study. When analyzing authenticity, Bell et al. (2019) de- scribes that one important factor to contemplate is the fairness of the representation of opinions that are brought forward in the study: does the selection of respondents represent different views regarding the discussed subject area? To achieve a high level of fairness in this study, the respondents that have been interviewed were se- lected from a varying background with the intention that they together can deliver a holistic picture of the subject area. In cases where it was needed, the supervisors of the study helped to suggest which interviewees to include in the study with the aim to capture a high number of perspectives. In addition to the issue of fairness, it is also important to allow for respondents to draw deeper conclusions and to re- ceive knowledge from each other (Bell et al., 2019). To enable this, the results and conclusions that are drawn in this report were presented for all respondents who wished to take part of the results. The sharing of results took place in the form of a seminar, where the listeners were allowed to discuss the results with the authors. 29 Circularity in the Construction Industry 4 Result and Analysis In this chapter, the result from the interviews is summarized and presented together with some analysis. The interviewees represent a broad front of different roles and organizations in the construction industry presented in table 1 and table 2. The interviews are analyzed with the aim to see patterns that represent the challenges and important insights within circularity in the construction industry. This chapter will also provide answers for the three research questions (RQ1-3) from different perspective due to the variance of interviewees. The chapter starts with the challenges and obstacles, identified from the interviews, that the construction industry faces today. This is followed by a section with the prerequisites for enable circular material flows containing the producer’s role in circu- larity. Subsequently, the different actors and their role within construction logistics, and how they contribute to increase and enable circularity, will be presented based on the interviews. Next section covers the level of digitalisation in the construc- tion industry and how this affects construction logistics, especially focusing on the process to transfer from linear to circular flows. This section will be followed by the different driving forces that have been identified when it comes to circularity in the construction industry. The chapter ends with a section covered by a network perspective presenting the different actors and the different flows between them. 4.1 Challenges within the Construction Industry The construction industry differs from other industries and is characterized by sev- eral challenges, which will be presented in the following sections. These charac- teristics sets the conditions for the requirements and opportunities to work with circularity in the construction industry. One common area that was discussed and highlighted in all the interviews was the differences between the construction industry and other industries, such as automo- tive production. Some of the things that characterises the construction industry, and the challenges that are connected to it, are the generally small spaces of a construction projects where several actors, material flows and transports need to interact, coordinate and cooperate. These interactions generally take place in a changeable environment where weather conditions like rain, wind and snow can affect the working conditions. This has a major impact on the working situation in the construction industry since, compared to production in a factory, it is work that is predominantly performed outside and by humans, meaning that there is generally less involvement of machines. This means that more factors will affect the progress of the project, which according to a company-oriented respondent can affect differ- ent parameters while at the same time result in that it is harder to determine fixed measurement parameters compared to when the work is performed by machines. 30 Circularity in the Construction Industry According to a digital tool-provider, one of the major challenges that the construc- tion industry needs to work with is to develop more fixed parameters, even though the industry operates within a changeable environment. The interviewees represent- ing the digital tool-providers do not see this as an impossible challenge since their view of the construction industry is that every project is not as unique as most of the industry according to them want to claim. After several interviews with actors that have different perspective of the challenges, it was clear that there are divided opinions when it comes to the question regarding the uniqueness of each project. Another area which was frequently discussed during the interviews was the low level of digitalisation within the construction industry; a number of respondents argue that it is far behind other industries. This affects the information flow between different actors which may result in logistical challenges. The issue of digitalisation will further be discussed in section 4.4. 4.1.1 Logistical Challenges in the Construction Industry Regardless the level of uniqueness in each project, the construction industry has to depend on functional logistical systems in order to be effective. Several interviewees pointed out the issue of distributing enough time on the planning phase in order to make sure to have adequate logistical solutions. The overall perception from the interviewees was also that today, the industry does not spend enough time on the planning phase and that logistics sometimes is falling through the cracks between different actors and those responsible. A company-oriented respondent talked about the importance of someone owning the logistical questions, meaning that the logistical responsibility cannot be divided between different actors and persons which are also responsible for other areas. This was expressed among several of the interviewees: there is no framework for the logistical solutions and that the actors do not collaborate to a sufficient extent. This summarizes the overall view of today’s challenges regarding the logistical issues; as of today, there are many temporary solutions and sets of actors for each project. The logistics are also often outsourced, which some interviewees saw as a way for organizations to escape responsibility. 4.1.2 The Human Factor in Construction As been presented earlier in section 4.1, the construction industry is characterized by the fact that the work is mostly performed by humans. This does for example affect the conditions to develop fixed measurement parameters, which in turn makes it harder to measure development. The human factor means that elements like losses of key persons, sickness and human error may affect projects to a relatively high degree. Furthermore, since a lot of the work in the construction industry take place outdoors, external factors like weather conditions can also play a vital role in this case. Unforeseen events caused by the human factor can contribute to 31 Circularity in the Construction Industry complex challenges in the logistical chain which places relatively high demands on the flexibility. Between the respondents, there were different opinions to which extent the issue of flexibility affects the construction industry; some respondents argued that the construction industry is good to adapt to fast changes that could be present in a changing environment as in the construction industry. This perception came from the respondents with a logistical perspective, working with logistical questions and its challenges. On the other hand, respondents with a more research- oriented perspective had an opposing view, that the construction industry are not able to handle the changes within logistics successfully. As of today, it is inevitable to notice different trends that influence the way humans think and act. A majority of the interviewees agreed that, even though trends come and go, the interest for more sustainable alternatives and solutions have increased in the last years. The consumers put more pressure on manufactures, property owners, carriers and other actors, which drives the work with sustainability forward and forces the market to change and act in a different way, compared to how it acts today. Following this, a sustainability-oriented respondent also discussed the internal con- flict that can arise due to trends regarding the perception of old and new goods in general. This could be perceived as a priority issue depending on whether the trend at the moment is to preserve old objects or not. For example, the people placed in a building which utilizes recovered material and which is decorated with old furniture may perceive the reason that they are placed here as something related to hierarchy or social class. This could also be a question regarding generation and culture, an elder generation could for example value things different from the new generations with a more sustainable thinking and eco-friendly perspective. Related to trends and how it can affect humans’ behavior comes the need of satis- faction after a choice. One project-oriented interviewee put it as: ”People want to feel that the choices they made are good” − Interviewee B3 In the discussion, the interviewee quoted above was asked why the company the interviewee represents prioritized more environmentally sustainable choices in their projects even though the process was more expensive. According to the intervie- wee, it has been profitable since their customers value these choices; the company perceives that sustainability sells. 4.1.2.1 Lack of Knowledge and Competence One thing that was high- lighted in several interviews was the lack of knowledge regarding circularity and recycling, which is in line with the fact that most of the interviewees described them- selves as in the beginning of their work with sustainability and especially circularity. 32 Circularity in the Construction Industry However, this was not the only knowledge gap that was discussed, a sustainability oriented respondent expressed it like: ”There is a general lack of logical knowledge regardless the kind of flow” − Interviewee D3 With this, it was meant that the challenge is not limited to the transition to circular flows. Instead, the challenge lies in the flows in general and that the logistical aspects often are missed in discussion about circularity. Their opinion is that the root cause is not reached when circularity is discussed: this only scratches the surface, which in the end will not lead to any major changes. A sustainability-oriented respondent gave opinions from an educational perspective where the respondent wanted to highlight the importance of increasing the education and knowledge on a broader front. Architects need to be educated on how to make use of existing materials and not only learn to design productions with new material. Likewise, there is also a need for example craftsmen, electricians and plumbers to get education on how to preserve and renovate existing products and materials and not only how to install new ones. In line with this topic, most of the interviewees have brought up the importance of dismantling instead of tearing down and throwing away material. This issue is not only a matter of time and costs, but also a question about knowledge. 4.2 Prerequisites for Circular Material flow Throughout the interviews, the issue regarding wrapping and packaging of ma- terial was frequently discussed. Material that has been used in previous projects, or material that has been ordered but not used, must be packaged sufficiently in order to not be damaged during transportation or storing. Additionally, it was argued that the material needs to be transported on standardized load carriers in order for material flows to be optimized. A Gap Exploiter argues that without proper packaging, the material is harder to sell: ”Without a proper way to package the reused materials, it is very hard for us to sell it. There has to be guidelines for how to package reused materials properly. Additionally, there has to be guidelines on how material is transported and stored, as materials today can arrive in various shapes and forms.” − Interviewee E1 Furthermore, the return flow of packaging and loading material after being used for reused products is today an issue. Some respondents argues that there are more or less hardly any existing flows dedicated for returning this material to where it is needed. This makes it hard to return this type of material on a large scale. In addition, load carriers are usually not designed for the return flow and are sometimes made to be used just once. 33 Circularity in the Construction Industry A commonly discussed subject from both construction clients and research institutes during the interviews has been the issue of inventories of material that is currently used in buildings that are ought to be demolished. The purpose with an inven- tory is for the client that owns the material to get a perception of which materials and which quantities of that material that could be reused in other construction projects. After an inventory has been carried out, the client that owns the mate- rial can decide upon what material to keep for future projects, and what material could be sold to other actors. When the inventory has been carried out, the next issue regards how to dismantle material that has been used in previous buildings, rather than just demolish the material. Throughout the interviews, there have been different opinions regarding to what extent it is possible to dismantle materials. Some respondents argue that dismantling at an industrial scale is not possible as of today; they mean that this is a process that mainly is feasible for do-it-yourself enthusiasts. Furthermore, some respondents see the costs connected to dismantling as an issue, and when weighing these costs against buying new material, there is no guarantee that the reused material will lead to a lower total cost. Instead, it has by some respondents been argued that it is generally more expensive incorporate reused materials in construction projects compared to the cost of only having new materials. On the contrary, not all respondents agree that dismantling is that much of an issue. Some respondents argue that, even though the total cost may be higher when dismantling and reusing material, the environmental savings made weigh up for a potential increased economic cost. It has also been argued that there is a lack of knowledge in the industry about dismantling. Additionally, some interviewed companies have started to try this approach in their construction projects. One private construction client that has come rather far in this process has developed their own methodology for how to dismantle material: ”When dismantling materials, we had to hire craftsmen in the same way we hire consultants. We had a demolitioner employed who we had to convince to try methods for removing plaster boards without breaking them. The entire industry said that you can’t dismantle plaster boards, but we have managed to do it. Following this, we employed a plumper, a ventilation assembler and an electrician with the same approach”. − Interviewee B3 Additionally, it has by some respondents been argued for that standardisation in building materials and methods could be a good approach for enabling an increase in circularity. When standardising, different projects are more similar in terms of what material is being used. Following this, materials are interchangeable at a higher level when standardising, which means that reused material have a higher possibility to be reused. 34 Circularity in the Construction Industry Even though standardisation is a facilitator for circularity, some respondents argue that it is not possible to standardise at a too high level. There are differences in requirements and desires between customers, as construction projects are not mass produced on an assembly line. Moreover, a logistics developer also mentioned that standardisation should not be seen as a limiting factor even though customers have different requirements. Instead, architects should try to achieve attractive and customized buildings with a high level of standardisation. Throughout the interviews, it was stated that storage of reused material is a big problem in today’s logistical system. There is no guarantee that supply and demand of reused material will match, meaning that material may be available at a time when there is no demand for it, or that there is demand for a reused material even though it is not available on the market. As of today, there is a lack of actors who can store material. Furthermore, material which are kept in storage does not contribute to environmental sustainability; the material must be used in another project for it to render an effect. This creates a balance act for the material owner: should the material be distributed to someone who needs it, or should it be kept until it is needed in one of the owner’s own projects? The issue of storing reused material will be further discussed in section 4.3.1. 4.3 Actors in Circularity One of the characteristics in the construction industry is that it often involves several actors, which requires a lot from the logistical perspective. In most of the interviews, the importance of putting pressure and make demands on the actors emerged. If no demands are made, there will not be any changes at the market and in the way actors act and make decisions today. Most of the interviewees were united in the belief that the requests and demands regarding sustainability and circularity need to come from the construction client who orders the project. Since the sustainable options not rarely are more expensive, this is a decision that need to be anchored with the construction client. A project leader at a public construction client is one of the interviewees which has begun to request and apply circularity in pilot-projects. Besides requiring climate- neutral transportations, they have also started to work with circularity in several pilot-projects where they aim for a higher percentage of recycled and reused mate- rials. The pilot-projects are a good start, and it helps them to identify the existing challenges and what they need to do to increase the circularity. One common ex- pression from the public construction clients was: ”We need more experience to be able to set clearer and more concrete goals” − Interviewee A2 This was a general impression, that few construction clients had any concrete goals 35 Circularity in the Construction Industry or results since they have just started working on these issues and challenges. They were also generally united in the opinion that they must test to gather experience and insights and that there is no point trying to figure out reasonable goals when they have n