Quantifying the Role of Government Support Policies for Circular Economy in Construction – Case of Recycled Concrete in Canada

Quantifying the Role of Government Support Policies for Circular Economy in Construction – Case of Recycled Concrete in Canada

2026

DOI: https://doi.org/10.60164/6xqa7qpwj

Authors: Mazdak Nik-Bakht, Azadeh Soofypour, Farid Sharifi

Citation:

Nik-Bakht, M., Soofypour, A., and Sharifi, F. (2026). Quantifying the Role of Government Support Policies for Circular Economy in Construction – Case of Recycled Concrete in Canada. Lean Construction Journal 2026 Special Issue CRC-CSCE pp 348-371 https://doi.org/10.60164/6xqa7qpwj (Submitted 04Mar2026; Accepted 25Sep2026) www.leanconstructionjournal.org

Abstract:

Question: Under what conditions can a recycled concrete aggregate (RCA)-based Circular Economy Business Model (CEBM) achieve financial viability and price-competitiveness against a linear virgin Aggregate supply chain, and which policy levers most effectively enhance its competitiveness?

Purpose: This paper quantifies the economic feasibility of shifting from a linear concrete supply chain to an RCA-based CEBM and assesses how targeted government interventions affect profitability.

Research Method: A simulation-based approach integrates (i) a System Dynamics model of physical material flows for linear and circular pathways, (ii) discounted cash flow analysis, and (iii) a structured factorial scenario design to evaluate policy conditions.

Findings: Performance of the recovery/recycling is a key driver of circular viability. At moderate rates, RCA-based circular models are only selectively attractive and lack robustness across policies; high tipping fees can even raise RCA costs due to unavoidable residual disposal. At high rates (≈95%), the circular configuration consistently achieves lower unit prices than the linear baseline for the same margin, with RCA becoming cost-competitive with virgin aggregate in multiple scenarios. Concessional financing reduces prices but does not change trends; carbon pricing primarily affects cement-related costs and offers only marginal relative benefits for circular concrete.

Limitations: The study is based on a hypothetical case study using parameterized costs and policy levels. While this approach allows for the isolation of key economic drivers, the results are sensitive to local market fluctuations, specific recovery performance, and varying contracting assumptions.

Implications: Policy packages should be performance-aligned: improving recovery and recycling capability is essential, while landfill pricing and financing tools should be designed to discourage avoidable disposal without unintentionally escalating costs for verified unrecoverable residuals. Relying on broad financial support alone is unlikely to deliver competitiveness.

Value for authors: This paper provides a transferable, decision-oriented modeling approach that connects material-flow dynamics to profitability and unit-price competitiveness, helping researchers and practitioners identify the operational thresholds and policy combinations needed to enable viable circular concrete business models.

Keywords: Circular Economy in Construction, Circular Economy Business Model, Recycled Concrete Aggregate, System Dynamics, Price on Carbon, Landfill Tipping Fee, Lean Disposal, Lean Salvage

Paper type: Full paper