The Environmental and Economic Benefits of Using Solid Wood in Building Construction – RBC Insights

2023-12-15 21:05:21

The Synergia building, in Saint-Hyacinthe, has an exposed structure that highlights different species of spruce, pine and fir wood. (Photo: Robin Group)

The widespread adoption of wood, particularly solid wood (or large timber, for structural and load-bearing elements), to replace or coexist with concrete and steel, could reduce emissions by up to 25%. greenhouse gas (GHG) emissions from buildings, says RBC bank.

In a note published on November 1 (Lumber structure: what is the contribution of wood to ecological construction in Canada?), Myha Truong-Regan, head of research at the RBC Climate Action Institute, points out that producing mass timber emits far fewer GHGs than producing concrete and steel.

The production of concrete and steel requires very high heat – between 1400 and 1600 degrees Celsius – to transform the raw material in blast furnaces or ovens. On the other hand, such heat is not necessary to make solid wood.

For example, according to the International Energy Agency (IEA), the energy to power blast furnaces – of fossil origin, such as coke/coal – to make steel represents 87% of emissions generated in the production process of this input.

The Intergovernmental Panel on Climate Change (IPCC, an organization overseen by the United Nations) also recommends the use of wood in construction.

According to the IPCC, wood products can replace more fossil fuel-intensive building materials, such as concrete, steel, aluminum (made from fossil fuels) and plastic, which can lead to significant reductions in GHG emissions.

In 2022, the building sector was the third largest carbon emitter in Canada. Its emissions reached 92 million tonnes (Mt) of CO2 equivalent, or 13% of total emissions, all sectors combined.

Construction is outpaced by oil and natural gas production as well as the transportation sector.

The RBC note highlights that it was in 2007 that mass timber was first used as a complement or alternative to concrete and steel in Canada – if we exclude buildings constructed at the end of the 19th century with heavy timber.

Solid wood little used in North America

In 2022, there were 661 projects carried out using solid wood in Canada, including 30% in Quebec, which ranks second after British Columbia (42%). Ontario – by far the most populous province – is home to 15% of the projects carried out in the country.

In a building, for example, wood can be used to construct floors, walls and windows, as well as insulation and roofing.

That said, solid wood is still used very little in North America today, as we can see in this table.

Solid wood represents barely 1% of the construction materials used, while concrete and steel total 81%. (Source: RBC)

The increased use of wood would also have economic benefits in Canada, notes Myha Truong-Regan.

“In addition to emissions reductions, increased use of mass timber in building construction could, by a conservative estimate, grow the mass timber market by $1 billion by 2030,” she writes in the 12-page note.

In his eyes, there are also business opportunities elsewhere in the world.

In 2022, the global solid wood market generated sales of $1.6 billion (CA). This year, it is expected to reach $1.9 billion, more than doubling to $4.9 billion by 2030.

At the end of the decade, Canada’s share of the world market would therefore be 20% – as is the case in 2023.

Constraints to growth in the sector

Although the growth potential of the solid wood industry is significant, there remain two major obstacles to the development of this sector in Canada, according to the RBC.

On the one hand, insurance premiums linked to building construction with mass timber “can be up to 10 times higher than those associated with a similar building designed in steel and concrete,” notes Myha Truong-Regan.

It goes without saying that this increases project costs, making them less competitive compared to buildings made solely of concrete and steel.

On the other hand, barriers to entry into the industry are very high due to initial capital costs. “The high cost of manufacturing equipment also prevents new players from entering the solid wood sector,” underlines Myha Truong-Regan.

For example, to start a business, the cost of manufacturing equipment is $200 million, for a 50,000 square meter (or 538,195 square foot) factory.

In this context, RBC believes that regulators and governments must do two things: standardize insurance underwriting to lower costs and continue to fund capital grants to help emerging entrepreneurs.

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