Research Reports

This research paper analyzes the EU Commission’s 'Construction Industry Policy for Green and Digital Transformation and Enhancing Resilience' as communicated in the Commission Staff Working Document, “Scenarios for a transition pathway for a resilient, greener and more digital construction ecosystem”. Regarding industrial policy, the EU Commission only has the authority to support or supplement member states’ initiatives, so industrial strategies related to the construction industry ecosystem are secondary to environmental and digital transformation policies and in which the EU can play a leading role. Taking this fact into account, we will look at the process leading to the formation of the construction industry policy, from the European Green Deal to industrial and trade policies resulting from it, and their contents. The European Green Deal is a policy package and growth strategy to achieve climate neutrality by 2050. The Green Deal is announced in the form of a communication, as soon as Commission President Ursula von der Leyen took office in December 2019. In an effort to concretize the Green Deal, the European Commission published 'A New Industrial Strategy for Europe', also in the form of a communication in March 2020, which aims at revitalizing global competitiveness and boosting digital and green transformations of EU industries. However, ten days later, the COVID-19 pandemic occurred, and not only the EU's new industrial but also new trade policies could not help but reflect the experience of the COVID-19 pandemic. Effectively, declared in February 2021, the New Strategy for EU Trade Policy advocates open strategic autonomy. And issued in May 2021, ‘Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery’ emphasizes the resilience of the industrial ecosystem that embodies the 'open strategic autonomy' expressed in the new trade policy at the industrial level. The update of the new industrial strategy encompasses 14 industrial ecosystems, including the construction industry ecosystem, as targets of industrial strategy. As a sequel to the updated New Industrial Policy, the European Commission publicized the Commission Staff Working Document, “Scenarios for a transition pathway for a resilient, greener and more digital construction ecosystem”. Established under the framework of the revised new industrial policy, EU’s Construction Industry Policy for Green and Digital Transformation and Enhancing Resilience was formed in a bottom-up manner. To identify and co-design pathways for the digital and green transformation of the construction industry ecosystem, the European Commission proposed a collaborative process with various stakeholders including member states’ governments, industrial representatives, social partners, and academia and the proposition was realized in the form of the High Level Construction Forum (HLCF) and thematic cluster group meetings on digital, green and resilience. Furthermore, EU's construction industry policy was introduced from the perspective of the construction industry ecosystem, which consists of the construction industry in a narrow sense related to on-site construction, the manufacturing industry that produces construction products and major materials, and the sector responsible for maintenance, management, and repair of the built environment. EU’s construction industry policy consists of parts focusing respectively enhancing resilience and competitiveness, supporting green transition, supporting digitalization, supporting transition using government procurement, financing for transition support, and research & innovation policy to support transition. The green and digital transformation key performance indicators of the construction industry ecosystem can be divided into general indicators, green transformation indicators of construction activities, green transformation indicators of existing houses, digitalization indicators of the construction sector, and other indicators. The Korean government also aligned with the Paris Agreement (2015) and recognized the seriousness of the climate crisis, announcing the Green New Deal policy in July 2020 and declaring in October of the same year the vision to achieve carbon neutrality by 2050. In addition, the “Framework Act on Carbon Neutrality and Green Growth to Respond to the Climate Crisis,” was enacted in 2022 to provide integrated considerations for the promotion of green growth and the necessary legal basis for it, the reduction of greenhouse gas emissions to transition to a carbon-neutral society, the adaption to the climate crisis, the minimization of job loss or damage to the local economy or vulnerable groups that may occur during the transition to a carbon-neutral society, the harmonization of the economy and the environment. In accordance with this framework act, the '2050 Carbon Neutral Green Growth Committee' deliberated in April 2023 on the 1st National Carbon Neutral Green Growth Basic Plan, which is the highest statutory plan containing the current government's will and policy direction for carbon neutral green growth. The bottom-up approach, discerned in the EU's construction industry policy establishment process is equally recognized in the establishment of Korea's first national carbon neutral green growth basic plan. In addition, the approach was also set to be applied to the inspection system of the basic plan’s implementation, by means of which future generations are supposed to participate in the implementation of the basic plan. Further, a comprehensive evaluation system of building energy performance will be applied to improve building energy efficiency. Furthermore, a follow-up management plan for zero energy buildings was also specified in the existing zero energy building certification system. Through the first national carbon neutral green growth basic plan, it was decided to establish a legal and institutional foundation to revitalize the timber construction field which uses wood as a building material that can absorb and store greenhouse gases. In contrast to the EU's policies that target at improving energy efficiency and reducing greenhouse gas emissions in existing buildings, manifested in the Renovation Wave, the Korean policies above-mentioned focus on new buildings. This difference is related to a situation where EU policies, due to the limitations of the EU Commission's position on industrial policy, are forced to reflect the perspective of environmental or energy policy goals rather than the perspective of the construction industry. In the same context, unlike the EU, the Korean government, which does not have institutional restrictions related to industrial policy, is able to establish and implement carbon neutrality and green growth policies from an industrial perspective, which present the Carbon Capture, Utilization, Storage (CCUS) industry as a means of reduction of greenhouse gas emissions. The EU's construction industry policy aimed at green and digital transformation and resilience need to be monitored with continued interest. This is because the emissions trading system, the carbon border adjustment mechanism, and the EU's trade and industry strategy of pursuing open strategic autonomy can reorganize the global supply chain and have a significant impact both on the global trade environment and on Korea's construction industry ecosystem.