The Finnish building stock is growing shabby. The repair backlog exceeds EUR 100 billion at the national level, and renovating all buildings to meet today’s and tomorrow’s requirements is not even feasible. Buildings destined for demolition contain tons and tons of fully usable materials that are at risk of turning into waste.
Some of those buildings would be worth refurbishing for a new purpose. But for which purpose and how? And what is the best way to optimally use the treasure trove of resources in buildings to be demolished?
This challenge is not one of the easiest. This is why it is fitting that a solution to the problem is being sought in Lahti, a city that was the European Green Capital in 2021.
The cluster lends stronger support for local companies’ efforts for the circular economy
The search for solutions is being tackled by the Circular Economy Cluster in Construction (RAKI), which started operating in 2025. The cluster was launched together with the City of Lahti, Lahti Region Development LADEC Oy, companies, research institutes and higher education institutions.
Its goal is to help local enterprises develop new types of construction products and services for the market while increasing companies’ awareness of the potential offered by the circular economy.
“We have brought together actors from different sectors and identified value chains. Rather than the easiest value chains to begin with, we have chosen the ones with the highest impact. Developing the manufacture of building materials is highly important in construction. Using various demolition materials and side streams as recycled raw materials plays an important role in the Circular Economy Cluster, with concrete and bitumen as examples,” says Juha Kapanen, Project Manager from the City of Lahti.
“Climate-wise solutions are part of our traditions, and Lahti was the European Green Capital 2021. We wanted to continue this journey and be one of the pioneers in the circular economy of construction, alongside with the Helsinki Metropolitan Area and Tampere,” adds Kimmo Haapea, Business Development Manager at LADEC. He is also the Project Manager of the Circular Economy Cluster of Lahti.
Mirva Grann started in her role as a coordinator of the cluster in November. Grann has over 20 years of experience in management and development, both in the public and private sectors.
“Above all, I expect the RAKI cluster to create a new kind of network in the region, where change stems from a shared culture and appreciative encounters rather than individual actions. I see a need for this cluster, as an individual company cannot solve the bottlenecks of the circular economy alone or build new, sustainable value chains. The cluster lends support for this change,” Grann explains.
Circular economy to help save Salpausselkä eskers?
The target set by both the EU and Finland is that circular economy will be the dominant economic system as early as 2035. Advancement in companies has been rather slow, however. There are several reasons for this.
Construction cycles and technologies as well as regulation lead to situations where a building at the end of its life cycle becomes waste.
“In an era when less money was available in the world and in Finland, buildings were relocated from one site to another – especially log buildings. When a building is demolished today, its components and materials most often become waste and are taken for disposal. You then excavate more sand to build the next one,” says Haapea.
This practice is a threat to the sand and gravel in the iconic Salpausselkä eskers that define the heritage landscapes of Lahti. To preserve the eskers for future generations and to take care of the environment, we need to reduce such activities as gravel extraction. The circular economy offers solutions for this by reusing all possible materials from buildings to be demolished.
“The materials from demolished buildings should be salvaged. For example, it is not a good idea to burn timber in a furnace to produce energy, as wood is a poor choice for this purpose. And when materials are reused, we can keep our excavators off the eskers,” Kapanen says.
Sometimes a decommissioned building need not be demolished, and repurposing it is enough. Kapanen stresses that resource-wise solutions are the key when it comes to promoting more sustainable construction.
In addition to established practices, a lack of information is a significant obstacle to the circular economy. Commissioners of construction contracts tend to think that circular economy solutions are expensive, which is why they feel there is no point in even finding out about them. Kimmo Haapea challenges this view, however.
“They may be slightly more expensive than new components in the construction phase, but the costs will even out over the long term. And when we look at their impacts from the regional economy perspective, the end result may even be positive in financial terms. This also reduces emissions and saves valuable nature.”
There often also are human reasons for companies’ reluctance. Haapea can identify with an entrepreneur’s daily life, as he was one of them himself for years. When all you can think about are the daily worries of running a company, you may not have time to learn about and grasp new opportunities.
This is why the cluster’s aim is to reduce the entrepreneurs’ burden by offering them information and support for business development. In addition, the cluster serves as a platform for dialogue and encounters between companies and other actors in the region, making it easier to come up with new ideas.
“The circular economy of construction is a complex transformation that challenges both legislation and established operating models. The cluster brings companies, public actors and educational institutions around the same table to shape the transformation together – rather than being directed from top down, it takes place as a process that gradually emerges from practical work, dialogue and shared understanding,” Mirva Grann reflects.
Spare part banks, renovations, rentals – what could the circular economy of construction look like?
The circular economy will create a demand for innovations. When designing new buildings, for example, you should know which materials and components of the building would be available from where.
“Typically, certain building elements are almost identical to each other. Could we brainstorm a spare parts bank based on the Danish model which could, for example, hold certain construction products from a specific era?” Kapanen wonders.
Rather than new and revolutionary innovations, however, the circular economy could mean a new way of thinking and creativity in business. Leasing of construction machinery is a classic example of the circular economy. Everyone need not buy their own leveller, for instance, when you can rent the equipment.
In particular, Haapea calls on municipalities to take on a pioneering role because, as major contracting entities in construction contracts, they can require companies to offer circular economy solutions.
“The goal is that municipalities would, for example when demolishing schools or building day-care centres, take circular economy into consideration. This would also enable local companies to benefit from these opportunities.
Almost all roads lead to Lahti
The fact that the circular economy cluster of construction is emerging in Lahti of all places is not a coincidence, as the city’s geographic location is favourable.
“When you draw a circle with a 150-kilometre radius using Lahti as the centre point, that circle contains quite a large share of built-up areas in Finland,” Juha Kapanen explains.
Haapea and Kapanen have visions of new types of degree programmes, jobs, research and innovations emerging around the circular economy of construction in Lahti. In 2027, a Master of Science (Technology) programme in construction offered by LUT University will start in Lahti.
In the neighbouring municipality of Hollola, plans for an eco-industrial park focusing on the circular economy are afoot. The development of Nostava area is already underway, and if everything goes to plan, building will start in the 2030s.
Kapanen hopes that the cluster could make people and decision-makers in the area see how the circular economy is not just about sorting waste or second-hand shops. Once pilot building projects of the circular economy begin to emerge in the area, his hopes will take an increasingly concrete shape. Pilots and experiments have already been carried out in the civil engineering sector and construction product industry. By autumn 2027, pilot sites may also be seen in building construction.
“Lessons learned from the pilots developed by the cluster, market information and shared tools will be put on a new information platform for everyone to use,” Grann adds.
If the circular economy manages to reduce the material and long-term costs of construction, this may also be reflected in the pockets of an ordinary Lahti resident as lower taxes.
“The longer-term goal is that circular economy will be part of daily business, with Lahti as one of its pioneers,” Haapea describes his vision.
“Is it industrial revolution number five or six we are talking about here?” Kapanen laughs.
Lahti is one of the cities in the InnoCities network. The City’s spearheads of development are electric transport, food innovations, carbon-neutral circular economy in cities, and international sports business.
The article is part of the impact stories series of the Innovation Cities network.
Read more about Innovation Cities (innokaupungit.fi)