The global market for green building materials is projected to increase at a CAGR of 9.5% during the forecast period of 2024 and 2032. In 2020 and the first half of 2021, the outbreak of COVID-19 had a significant impact on the global construction industry due to government-imposed bans and restrictions, thereby restraining the growth of the market for green building materials. Strict lockdown measures in major cities halted home registrations and slowed the distribution of home loans, which had the greatest impact on residential real estate. However, since these restrictions were lifted, the sector has been regaining strength rapidly. The market recovery over the past two years has been driven by an increase in home sales, the introduction of new projects, and an increase in demand for new offices and commercial spaces.
The medium-term growth of the studied market is primarily driven by the potential application of eco-friendly building materials in energy-efficient structures. In addition, there are favorable government policies that encourage green building construction and standardize industry-wide practices. These policies compel manufacturers of construction materials to incorporate more green material compositions/systems into their products. On the other hand, the high initial capital investments for green building construction relative to conventional buildings are anticipated to be the primary factor restraining the growth of the studied market during the forecast period. Notwithstanding, the increasing emphasis of various economies on achieving carbon neutrality, the declining operating costs of green buildings over time, and the rising trends in recycled construction are anticipated to generate lucrative growth opportunities in the global market in the near future. During the forecast period, it is anticipated that North America will dominate the market. This dominance is a result of the residential, commercial, industrial, and infrastructure markets' high demand for framing, roofing, insulation, and other applications.
Green building materials are non-toxic, eco-friendly, and sustainable materials that improve occupant health, reduce energy costs and conserve energy. Green buildings have lower operating costs than conventional buildings because they consume 63% less water and 55% less electricity. The green building materials market is segmented by application, end-user industry, and geography. The market is segmented by application into framing, insulation, roofing, exterior siding, and interior finishing. By end-user industry, the market is divided into the residential, commercial, industrial and institutional, and infrastructure segments. In addition, the report provides market size and forecasts for the market for green building materials in 15 countries across the world's most significant regions. On the basis of revenue, market size and forecasts for each segment have been determined (USD million).
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By product type, structural accounted for over 65% of the market share for sustainable construction materials in 2023. In addition to reducing the carbon footprint, structural products offer affordable exceptional durability. The expansion of the construction industry, especially in developing countries, will likely stimulate market growth. The increasing popularity and use of diverse cladding styles on residential buildings increase the demand for construction sustainable insulation materials that provide air and weatherproofing while accommodating any post-construction movement or stresses the buildings may be subjected to. Insulation materials improve the durability of repaired joints and offer a cost-effective method for enhancing the building's overall sustainability without requiring the replacement of existing building materials.
In 2023, insulation accounted for more than 28.0% of the market for sustainable building materials by application. It is essential for energy-efficient residential construction to insulate the roof, walls, attic, and foundations. Due to the ineffectiveness of glass as an insulator, the insulation of see-through windows, envelopes, and skylights significantly reduces heat loss or gain, thereby minimizing heat transfer and condensation. Consequently, insulation materials protect the building from humidity, freezing, mold, and deformation caused by corrosion in construction works.
In 2023, residential construction accounted for 45.0% of the construction industry's market share for sustainable materials. Both new construction and renovation projects are expanding as a result of the growing global population and urbanization rate. Government regulations mandating the reduction of environmental pollution and the enhancement of a building's energy efficiency are significant factors driving market demand.
Historically, the residential end-user segment has held a significant share of the global market for sustainable building materials. Due to the growing demand for energy-efficient residential buildings, sustainable building materials for residential settings such as apartments, villas, flats, housing complexes, communities, etc. have gained significant traction. In addition, the use of renewable power sources, appropriate insulation, recyclable materials for window panes, doors, and roofing, as well as sustainable coatings for water-proofing and preventing leakage, etc., has increased the global market for Sustainable Building Materials. In addition, the growing emphasis on promoting sustainability in residential building construction and the demand for energy certification of buildings have also contributed to market growth. In this regard, the Government of India has provided various incentive programs for buildings rated by the Indian Green Building Council (IGBC) in India in its various states. Therefore, it is anticipated that these initiatives will accelerate the growth of the global market for sustainable building materials from 2024 to 2032.
In 2023, the residential sector is the most important market for green building materials. Diverse green building materials are gaining popularity in residential construction due to the increased demand for energy-efficient, moisture-resistant, durable, and easy-to-maintain materials. The continued expansion of the residential use of green building materials is supported by factors including personal safety, a growing awareness of and affinity for green building materials, and government regulations.
Green building materials, such as fiber cement siding, thermally modified wood, bamboo, fly ash or ashcrete, hempcrete, and recycled plastic, are increasingly used in residential construction. Other natural materials used for insulation include cellulose, hemp, and cork. In a variety of residential applications, natural fibers such as cotton, jute, and wool, recycled materials such as terrazzo, and recycled concrete, stucco, stone, and rubber-based materials are also utilized. Numerous governments provide green housing incentives to encourage the creation of environmentally friendly residential developments. For instance, tax credits in the United States and Spain, the Green Mark incentive program in Singapore, and subsidies in New Zealand encourage the construction of green residential buildings in the country, which is likely to benefit the market under study.
Japan's impressive Leadership in Energy and Environmental Design (LEED) portfolio continues to grow. Japan has over 268 LEED-certified projects with a combined square footage of approximately 29 million square feet. In addition, the German KreditanstaltfürWiederaufbau (KfW) program offers low-interest loans and grants for construction and renovation projects with certification ratings exceeding code performance. China has the world's largest construction market. The Chinese government prioritized the Thirteenth Five-Year Plan, which includes green building initiatives. In accordance with the country's national climate commitment, 50 percent of all new buildings must be certified as environmentally friendly by 2020. Approximately 6,548 green building projects are registered in India. In June of 2021, the IIA and the CII-IGBC signed an agreement to promote green building practices in architectural design and planning. Due to the aforementioned factors, the utilization and demand of green building materials for residential construction applications are anticipated to increase during the forecast period.
In North America, the high consumption of green building materials across all types of construction is the primary factor driving the growth of the green building materials market. The LEED rating system is the most popular green building rating system in the United States. It provides a framework for healthy, efficient, carbon-saving, and cost-saving green buildings. LEED-certified buildings save money, improve efficiency, and reduce carbon emissions. According to the USGBC, there were approximately 20,125 Certified LEED projects, 21,068 Silver projects, 21,206 Gold projects, and 7,027 Platinum projects in the United States as of October 2023.
The residential and commercial sectors accounted for 28% of the nation's end-use energy consumption in 2021, consuming a total of 21 quadrillion Btu, according to the US Energy Information Administration. In response to the high energy demand for buildings, the US government has announced plans to invest USD 3.16 billion to transform approximately 450,000 low-income homes into energy-efficient structures and reduce the country's utility bills. To protect the environment and mitigate the effects of climate change, the Canadian government has pledged to reduce greenhouse gas emissions by 40-45 percent below 2005 levels by 2030, and to net zero by 2050. To achieve these goals, the Canada Green Buildings Strategy was allocated 150 million CAD in the national budget for 2023. This strategy will mobilize national action to transform markets and reduce costs in order to achieve this objective.
New institutional construction has the best performance for green buildings in Canada, according to the WGBC. This proportion is projected to increase substantially in the coming years. Environmental regulations and efforts to reduce energy consumption are driving the development of the green building industry in Canada. Mexico ranked tenth globally in terms of square feet (sq. ft.) of LEED certification in 2021, with 47 projects certifying a total of 10,285,729.57 sq. ft. Moreover, as of December 2021, two Mexican REITs, Fibra Macquarie and Fibra Shop, were pursuing green certification for their entire portfolios through a combination of retrofit investments and higher quality-on-entry standards. In addition, privately held Mexican businesses demonstrate a commitment to LEED and green building. All of the aforementioned factors are anticipated to stimulate the growth of the market for green building materials in North America over the forecast period.
The market for green building materials is fragmented on a global scale, with numerous players holding small market shares. Sika AG, Kingspan Group, Holcim, Saint-Gobain (CertainTeed), BASF SE, and others are among the major corporations. The leading players in the market for sustainable construction materials have cutting-edge production facilities and participate in numerous R&D projects.
