How to Properly Value Materials

Materials have value. Whether it be the bricks that built your house or the aglets on your shoelaces (an aglet is that little piece of plastic you find on the ends of most of your shoelaces). They hold value not only in terms of the amount of money spent to produce and integrate said material into a finished product but also in terms of energetic value. If we were to look at the life-cycle of those bricks mentioned above we would see that many hours of work are needed to produce a singular brick. This work exists out of a long list of different processes at varying levels of the value chain.

“…uhh wait im pretty sure like it takes like a couple of seconds to produce a brick these days” I hear you thinking.

There’s another version of this image that replaces THUMP with TRUMP.

Sure, if you have the base ingredients the manufacturer can quite quickly make you a singular brick, perhaps even in seconds. However, in order to find out the true value you have to take into account the processes that had to happen to provide the manufacturer with those ingredients.

The most important thing to remember from all the words I typed above this point is that a lot of work goes into the simplest of things these days. Currently a material is given a financial value based on the hours or effort that goes into making it. The sand that goes into a brick is valued at X, the brick itself is valued based on X and Y and Z, Y being the value of the lime and Z being the value of the clay. I don’t think I need to go on. You get the picture.

When you think of it, a lot of these materials, including bricks, don’t hold onto their value once they have been used. Say a brick house is demolished, those bricks are considered waste once they hit the floor. All that time and energy that went into making these bricks is thrown away along with the brick.

If it was universally known just how much energy goes into making the materials that we use perhaps we would think twice before disposing or burning them so readily. After all, the most environmentally responsible way of making sure that the vast amount of energy embodied within a material is used is to use it for as long as possible. Perhaps once everyone knows the true value of these materials we can do something about the construction and demolition waste that makes of 33% of all waste produced in the EU. My thoughts are that a big chunk of that 33% isn’t waste at all.

By knowing this true full life-cycle value we can more easily go about placing a value on the recovery, recycling and re-use of these materials. A Material Passport aims to do this as well as other things. It aims to give a material an identity and make it an individual that acts to encourage a more circular economy.

Give this poor boy a passport so that he can go to Disney world.

The passport of a brick for example would store all information of the ingredients for this brick, the amount of energy that was needed to produce this brick and instructions for disassembly to name a few. Once this information is widely known one can more easily attach a financial value to these bricks after they have been used.

Say, that brick house that was demolished earlier in this article had a couple hundred bricks left over once it has been flattened. Somebody else can very easily use those bricks to build a 2nd house. These bricks will definitely have a particular financial value on the 2nd hand brick market. This is not only good for the environment, but also for John the contractor’s family holiday piggy bank. Resale baby. Resale.

And now a short message from our sponsor, Hawaii native and all-round wholesome tune-maker, Jack Johnson.

Advantages of the Material Passport.

Sub-headings are cool.

  • By having a material passport, one can anticipate on the deconstruction of the properties and ensure the highest possible usefulness of the materials after having the premises vacated . This is another way of being conscious about the footprint, and limiting our negative impact on the environment.
  • A more granular understanding of the construction of a building, might enable novel forms of financing that will support suppliers to provide a service rather than sell a product.
  • By reviewing how buildings are valued now, new financing products or financing policies (e.g. higher collateral value) can be developed that better reflect the (financial) value of buildings.
  • The recovery of collateral in case of a default might improve through the sale of the parts instead of the building as a whole.

Disadvantages of the Material passport.

The other side of the coin….which is most likely made of copper or nickel….. but what is copper made of?! 😵

  • A passport needs to be kept up to date and maintained throughout a building’s life. It is not yet known how work intensive this is, but for the building to remain relevant, all changes that happened after the passport was created, need to be logged. The value of this work will probably only be apparent at the end of the useful life of a building, which might be several decades away.
  • The market for second hand materials is still in its infancy, and currently not able to support the optimal re-use of the materials in a building. Also,a lot more standardization, at least at the level of components, will be needed to increase the re-use of the materials in a building.
  • There is no standardization for material passports yet. Passports might therefore prove to have limited usefulness when ultimately needed, due to evolving requirements, or require additional investments during the life of the building to keep them up to market standard.
  • Legislation needs to be put in place to support more sustainable building, enable the development of services instead of ownership, … and support a broad deployment of material passports.
  • The infrastructure, mainly IT, to support material passports still needs to be created.

From where I’m standing the majority of those disadvantages are more opportunities than problems. Yes, jobs will need be created in order to manage these databases or keep track of the materials but when has that ever been an issue? In fact, the circular economy could create as much as 200,000 new jobs by the year 2030 and economic growth could be given a hearty boost of 4% over the next 10 years.

These figures come from a great little document by 2 construction sector giants ARUP and BAM, which you can find here. Its an easy to digest document filled with some great statistics, snappy writing and is best paired with a 2015 Châteauneuf-du-Pape.

Where are we today?

There are quite a few projects going on at the moment trying to implement material passports at a European level. There are some smaller projects, that may be able to move faster, happening on a national scale but I do think this has be launched on a international level. I’m not sure which is best, I dont know enough about the regulatory landscape that these organisations have to navigate but I’m glad either way that there are people that think about these issues the same way we do.

The EPEA is an internationally active scientific research and consultancy institute that works with actors and companies from economy, politics and science. The EPEA supports them for the introduction of circular processes, using the cradle-to-cradle design approach. They’re product, the Circularity Passport, could look something like the image to the left.

On a grander scale there is the BAMB 2020 project or Buildings as Material Banks 2020. An EU funded project bringing together 15 European parties including universities, building, IT companies, consultants and policy makers. This initiative is setting up a number of projects around 6 topics within the circular economy; Material Passports, Reversible building design, data management (BIM), circular building business models and policies and standards.

The concept is still in its infancy and, as highlighted above, the results of adopting this concept will only become apparent several decades from now but still, baby steps.

Our Challenge

We are a very young company. Just over 3 years ago the wheels started turning on this vision we had about making affordable, environmentally friendly housing. It is almost 1 year to the day that we incorporated this project and turned it into a business. Though the product has changed quite the vision has stayed the same.

Rethink the way homes are built in order to create more affordable and sustainable housing solutions.

However the more we talked to players in the sector the more we started realizing that the “affordable” part was going to be the most important aspect. In the world of developing construction projects, the importance of shaving a couple of euros off of the cost of construction far outweighed the need for sustainable housing solutions.

I know that finding the balance between driving down costs and environmental impact will be one of our main struggles. It will often come down to using cheaper materials or cutting down on some features that may make our product less environmentally friendly.

One of the main reasons material passports interest us is that we can make sure that the materials we use can be re-used appropriately once our SAM modules have reached the end of their useful life. It doesn’t necessarily mean we have to use more expensive or more affordable materials. It just means that we can ensure that whichever material we do use will be used for as long as possible. It may not sound like much, but its something.