ECONOMIC EFFICIENCY OF GREEN CONSTRUCTION IN EUROPE BASED ON CIRCULAR ECONOMY PRINCIPLES
Abstract
The purpose of the article is to examine contemporary eco-building practices in the European Union within the framework of the European Green Deal and the transition to a circular economy. The relevance of the study is driven by the urgent need to structurally transform the construction sector, which accounts for roughly 40% of energy consumption and 36% of greenhouse gas emissions in Europe. Methodology of research. This paper provides a comprehensive economic and regulatory analysis of green construction, focusing on the updated Energy Performance of Buildings Directive (EPBD) and the "Renovation Wave" strategy. Through an empirical analysis of statistical data from various EU member states, the research evaluates the capital expenditures (CAPEX), operational expenses (OPEX), and overall life-cycle costing (LCC) of sustainable buildings compared to traditional ones. The financial mechanisms, including green bonds, subventions, and tax incentives that stimulate eco-investment, are thoroughly explored. The study models the economic impact of scaling the Passive House standard and adopting bio-based materials like Cross-Laminated Timber (CLT) and low-carbon cement. Findings. The empirical findings indicate that while initial investment costs (CAPEX) for green buildings are 5% to 12% higher due to advanced materials and digital smart technologies, these assets achieve an operational cost reduction of up to 45% through high energy self-sufficiency and low maintenance. Consequently, this yields shorter payback periods and substantially higher long-term asset capitalization on the European real estate market. Furthermore, integrating the building-as-a-material-bank philosophy significantly mitigates the risks of raw material price volatility. The paper outlines strategic recommendations for policymakers and financial institutions to further optimize the green transition in construction, emphasizing that eco-building is no longer merely an ecological choice but a key imperative for ensuring regional macroeconomic resilience, corporate competitiveness, and sustainable long-term economic growth. Additionally, the study investigates the macroeconomic spillover effects of green construction on employment rates within the renewable energy and manufacturing sectors, illustrating that every million euros invested in eco-renovations generates approximately 12 to 18 local green jobs. Practical value. This holistic economic evaluation underlines how systemic integration of green building principles serves as a structural catalyst for regional competitiveness, resource independence, and financial sustainability across European asset markets.
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