This chapter offers a comprehensive analysis of the intersection between digitalisation and the circular economy (CE) within the construction sector. It underscores the transformative potential of integrating digital tools to advance circularity objectives across managerial, environmental, economic, and social dimensions. The chapter discusses fourteen digital tools and technologies, which play a pivotal role in CE by streamlining data integration and visualisation, enhancing the accuracy of Life Cycle Costing (LCC) and Life Cycle Analysis (LCA) assessments, and supporting the adoption of CE strategies. Moreover, it explores how digital tools can facilitate collaboration among stakeholders, fostering knowledge sharing and effective communication throughout the project lifecycle. Nevertheless, challenges such as the absence of standardised methods, data interoperability issues, and the need for well-defined system boundaries remain. The chapter highlights the critical role of digitalisation in advancing the transition towards CE in the construction sector, emphasising the necessity of overcoming technical and systemic obstacles to fully harness the potential of digital tools in implementing CE. This transition aligns with the broader ambitions of the European Green Deal and the EU Digital Strategy, aiming to create a more sustainable, efficient, and resilient construction industry. By addressing these challenges and leveraging digitalisation, the construction sector can make a significant contribution to a sustainable and circular economy, ultimately benefiting both the environment and society.

Construction is one of the critical sectors in the transition to a Circular Economy due to its contribution to resource depletion, waste, and emissions. Despite its acknowledged limitations (e.g., low productivity), the construction sector has been the focus of policies and regulations to improve its sustainability and circular economy capabilities. This study focuses on circular economy policies and regulations related to the construction sector in the European Union and Portugal, identifying political and regulatory barriers and opportunities. The analysis identified a growing number of publications since 2019 and divided the policies and regulations for the Circular Economy into four areas: Resource and Waste Management, Sustainable Development Goals, Green Public Procurement, and Circular Economy. Four main barriers were identified: policies and regulations harmonization, digital innovation (within the twin transition), support to the transition (e.g. financial and educational), and clear and focused governance models. It then discusses the documents and barriers, analyzes the Portuguese strategy (Portuguese Action Plan for Circularity in the Construction Sector), and proposes a strategy to be followed by other countries. The findings provide a holistic understanding of why policies and regulations fail to support Circular Economy day-to-day practices and provide insights on how to trigger the transition.

This document serves as the opening chapter of a book that addresses the critical issue of resource depletion in the built environment, illustrating the unsustainable trends in current construction and demolition practices that extensively rely on new raw materials. It highlights the significant impact of the building sector on global resource consumption, energy utilization, and waste generation, with alarming statistics such as buildings accounting for 40% of the world’s extracted materials and a significant source of waste and greenhouse gas emissions. Advocating for a transformative shift towards a circular economy in the built environment, the text emphasizes sustainable and regenerative economic practices that minimize waste and maximize resource efficiency. This approach necessitates the redesign of systems to ensure the durability, reparability, and recyclability of construction materials, thereby promoting a model where waste is systematically eliminated and materials are continually repurposed. The document also discusses the 10R strategy, which centres on minimizing waste and enhancing resource efficiency, and explores various circular practices within the construction sector. It includes examples from case studies and best practices to demonstrate the viability and advantages of adopting circular economy principles. The challenges and success factors in implementing such practices are thoroughly examined, emphasizing the urgent need for increased awareness, supportive policies, and robust stakeholder collaboration to foster a more sustainable and resource-efficient built environment. The first chapter sets the stage for a detailed exploration of these themes throughout the book’s subsequent sections.

The concepts of “modularity” and “prefabrication” require a deeper understanding being crucial to investigate their relation with the circular economy. Prefabrication involves pre-manufacturing building elements off-site and their transport to the construction site and assembly. Prefabrication can be divided into different categories: Component, Non-volumetric, Volumetric, Modular construction, Hybrid structures, or Whole building prefabrication; and can be based on linear (e.g., columns or pillars), bidimensional (e.g., walls or floor panels), or tri-dimensional elements (e.g., modules or whole prefabricated houses). The most commonly used materials are steel, wood, and concrete, although plastic, composite, and nature-based materials are increasingly being explored. While comparing the prefabricated materials, steel has high embodied impacts but recycle and reuse potential, timber has biogenic content and high reuse potential, and concrete poses transport and assembly challenges. The refurbishment of prefabricated buildings and the use of prefabricated elements in refurbishment are also discussed. The main benefits of adopting prefabrication are impact, cost, material, waste, and time reduction, with quality increase; and the challenges are cultural, technical, and market aspects with some investment required. A bibliometric analysis explores the relationship between modularity, prefabrication, and circular construction and concludes that the link between the three concepts seems fragile and unclear.