How timber is reducing carbon footprints
The construction sector has one of the biggest carbon footprints in the world. It is responsible for almost 40% of global CO² emissions. The high emissions are not only based on fossil fuel-driven energy consumption, but also the reliance on concrete or steel as building materials has a very negative impact on the overall carbon footprint.A new report from Allianz Commercial, published on 15 February 2024, takes a closer look at a much more sustainable building material: mass timber. This material has the potential to be a critical building component for the cities of the near future. It is renewable and comes with lower costs and less CO² emissions. But, even if mass timber has so many advantages, there are still risks such as fire, floods, earthquakes or termites that need to be mitigated.
These are the key findings:
• Sustainable construction: The use of mass timber offers a short and medium-term solution for the construction industry to lower its massive carbon footprint. Mass timber emits significantly less CO² with around 50% less than concrete and more than 25% less than steel. Furthermore, it is more cost-efficient but as durable as concrete and steel.
• Growth potential: Although the global mass timber construction market is still a niche market, it has enormous growth potential. It generated U$857mn in 2021 and is forecast to hit U$1.5bn by 2031, with a CAGR of 6.0%
• Fire as the main risk for mass timber: Mass timber is still wood, and fire is the primary hazard concern. Fire is already the most expensive cause of all construction/engineering insurance losses, accounting for more than a quarter (27%) of the value of 22,000 claims analysed over five years, according to Allianz.
Significant opportunity
“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial.
“However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”
The need for mass timber
The building and construction sectors are among the largest contributors to CO² emissions, accounting for over 34% of energy demand and around 37% of energy and process related CO²emissions in 2021. Given emissions reduction is essential to meet climate change commitments around the world, the need for more sustainable solutions in the built environment has become increasingly important, driven by growing investor and consumer concerns, and legislation, regulation and reporting requirements evolving quickly in many jurisdictions around the world.
Mass timber is a relatively new type of engineered construction in which most products comprise multiple wood pieces joined together to form larger, stronger members, which can then be used for roofs, floors, and walls. It is often combined with traditional non-combustible structural materials to create a hybrid mass timber construction style, allowing high-rise timber structures to be built more sustainably – the height of the world’s tallest timber building has tripled in just 10 years, with 140 mass timber buildings around the world of eight stories or higher as of February 2022, with 70% of these in Europe.
Mass projects
Although mass timber currently only represents a tiny proportion of the overall number of buildings constructed worldwide each year – for example, just over 2 000 residential, commercial, or institutional mass timber projects were in progress or built in the US, as of December 2023, according to the Wood Products Council, nevertheless, from mixed use developments to hotels to schools, an emerging market is underway. The global mass timber construction market generated U$857mn in 2021 and is forecast to hit U$1.5bn by 2031, with a CAGR of 6.0%, according to Allied Market Research.
“In addition to being a renewable resource, the advantages of mass timber also include it being a lighter weight material than concrete or steel, while costs may be lower due to less construction traffic and a need for fewer workers,” explains Franck Fumat, a Regional Head of Property Risk Consulting at Allianz Commercial.
“Off-site manufacturing is typically used for mass timber projects, with elements such as columns, beams and panels being manufactured in factory environments and then erected on-site. This approach offers advantages, such as high levels of quality control and improved efficiency compared to conventional on-site construction.”