Modern methods of construction – building a circular economy for the Irish construction industry?

The circular economy has become a significant public policy consideration due to an increase in societal awareness of both the environmental concerns and resource scarcity on a global basis. Adhering to a circular economy rationale aims to slow down the use of natural resources that are required to produce new materials, thus reducing landscape and habitat disruption and helping to limit biodiversity loss. In addition, it also aims to reduce greenhouse gas emissions and encourages the manufacture of better designed products which can be re-used, repaired and remade.

The construction industry has been identified at both the European Union (EU) and national level as an industry which ought to shift to a circular economy model. This is unsurprising given that the built environment accounts for around 50% of all extracted material, and the construction industry is responsible for over 35% of the EU’s total waste generation. While several actions have been taken to introduce a more circular economy to the construction industry at EU level, this article focuses on actions being taken at a national level. 

The Irish Government has long signalled its intention to introduce circular economy initiatives into the domestic construction industry. Under Section 7 of the Circular Economy and Miscellaneous Provision Act 2022 (the Act), construction is listed specifically as a sector that the Government’s ‘Circular Economy Strategy’ must set out targets for. These targets, as per s 7(6)(b) of the Act, may include reductions in material resource consumption and the use of non-recyclable materials, require increases in the use of re-usable products and materials, require increased levels of repair and re-use of products and materials and lastly, require improved maintenance and optimised use of goods, products and materials.

While Section 7 of the Act is yet to be enacted, Annex 4 of the ‘Whole of Government Circular Economy Strategy 2022 – 2023’ published in December 2021 set out the potential actions that could be taken in the construction sector to move to a more circular economy, namely;

1. increased use of offsite design and manufacture
2. modular building design
3. refurbishment and retrofitting of existing stock
4. tackling dereliction and bringing stock back into occupancy
5. increase use of construction and demolition waste as a secondary construction material

The Department of Further and Higher Education, Research, Innovation and Science has recently taken steps in relation to (i) and (ii) above with the launch of their Modern Methods of Construction (MMC) Action Plan in June of this year. The plan identifies a critical need for the adoption of MMC for reasons such as accelerating housing supply, encouraging innovation and technology, and for increasing sustainability in the construction sector.

What is MMC?

MMC is a term used to describe a range of construction processes and approaches, including offsite manufacturing processes and onsite techniques that provide alternatives to traditional construction methods. Common uses of MMC include volumetric housing units, panelised components such as timber frame and precast concrete panels, pre-manufacturing assemblies such as partition wall systems and innovative site processes and approaches such as building information modelling (BIM).

MMC has many advantages from an environmental perspective:

• Waste is minimised through mass production and repeat processes in off-site factory settings. 
• Modular units can be disassembled and re-used which reduces the demand for raw materials and promotes recycling.
• Off-site manufacturing minimises pollution and disruption on site and fewer trips to the site may be required with materials.
• Products can also be tested and improved more regularly which significantly increases product improvements including sustainability and energy efficiency – an example of this is air tightness in residential developments. Air tightness improves the energy performance of homes and promotes a higher building energy rating (BER) rating.
• Labour is generally located in close proximity to the relevant manufacturing site / factory in which offsite components are manufactured, thus minimising the need to commute to work reducing traffic and carbon footprint.
• MMC often incorporates sustainable materials and practices, such as timber frames. Timber is a naturally occurring resource that absorbs CO2 from the atmosphere and its greater use in construction can reduce the embodied carbon emitted by the sector. In contrast concrete has a very high embodied carbon content.

The above listed advantages, such as minimising waste, promoting the re-use of materials and incorporating sustainable materials into the manufacturing process are all actions that contribute to a more circular economy.

Construction benefits

MMC paves the way for the construction of buildings with increased levels of efficiency and helps to deliver housing in a new, adaptive and sustainable way. Adoption of MMC will contribute towards encouraging Ireland into adopting a more circular economy. The MMC Action Plan aims to promote the adoption of MMC across the country, as not only does it offer the environmental advantages listed above, but it also offers the use of prefabricated components which could help accelerate housing supply and allow for the faster delivery of construction projects.

The Action Plan identifies 58 recommendations across eight core themes, namely senior management training, information sharing, new roles and labour retention, the use of digital and AI tools, certification, early learning engagement, policy levers and training provision. In relation to training, the recommendations include the use of roadshow training, MMC traineeships and micro-credentials, tackling computer literacy and encouraging the use of MMC in construction course content. In order to ensure the recommendations of the Action Plan are delivered, an implementation group will be established to oversee and co-ordinate the delivery of the plan. Furthermore, the 2025 Programme for Government includes the setting up of a MMC Innovation Fund, via the Ireland Strategic Investment Fund (ISIF), to invest in companies to develop MMC, mainly in the form of directly funding new housing factories, and the expansion of existing factories.

Challenges for circular construction

However, there are a number of barriers to the widespread adoption of MMC in Ireland. Many construction firms in the country are small to medium sized and could need significant governmental support to move to MMC. Furthermore, there are several additional contractual considerations that would need to be addressed before including MMC in a project, such as the ownership of off-site materials, insurance and transit risk, the insolvency risk of suppliers, the liability for defects in modular units and challenges around component reuse such as quality, demand, consumer preferences and compliance with building regulations amongst others.

Conclusion

While some barriers remain to the increased use of MMC in Ireland, the Government’s Action Plan signals a positive step forward towards encouraging its wider adoption in the Irish construction industry. Core elements of MMC, such as reducing the levels of construction waste, encouraging the use of sustainable materials and designing for energy efficiency align with the main goal of the circular economy to minimise environmental impact and extend the lifecycle of materials. The adoption of MMC will contribute to a more sustainable Irish construction industry, and in turn a more circular Irish economy.

For further information on this topic, please contact Jamie Rattigan or Andrew Heffernan, or any member of ALG’s Construction & Engineering group.

With thanks to Eibhlín Clinton and Srishti Kumar for their assistance in the preparation of this article.

Date published: 7 October 2025