The global green building materials market size was valued at $213.10 billion in 2017, growing at a compound annual growth rate (CAGR) of 11.2% over the forecast period. The market is expected to register notable gains fueled by the rising environmental concerns in Europe and North America. In addition, the introduction of advanced products using sustainable and naturally sourced materials is expected to benefit the industry growth.

The industry is expected to facilitate the replacement of materials such as cement and aggregates, which require extensive mining operations for production. Rising usage of naturally available fibrous products such as bamboo and hemp is expected to propel the demand for such products leading to market growth.

Major market trends

Thermally modified wood is one of the major new products that is expected to gain traction over the next few years on account of superior properties. The material contains low oxygen content, which prevents it from burning at high temperatures. The product is manufactured using five major thermal modification processes such as retification, plato process, thermowood, les bois perdure and oil-heat treatment.

The use of the product in the manufacture of panels, decking and other residential and commercial furniture is expected to gain momentum primarily due to the superior fire protection and longer lifetime of the product.

Plywood veneers are used for decorative purposes and offer superior replacement of decorative papers in wood veneer high-pressure laminate. The use of the product in marquetry and for the production of doors, tops and panels for cabinets are expected to gain traction which is further likely to result in the growth in the demand for such panels.

Smart windows are advanced products with variable opacity. Consumers have the option of adjusting the degree of sunlight that is to be allowed to pass through the windows, which result in an optimum usage of electricity that reduces the need for air conditioning. Increased demand is expected for such products over the forecast period.

Self-healing concrete is currently under a test stage as a part of the project named as materials for life. In addition, advanced construction techniques—such as grasscrete, which calls for laying the concrete in a pattern that allows for patches of grass to grow through—is expected to emerge as the major market trend.

Introduction of advanced products such as AirFlow panels and modular graywater systems to reduce the overall carbon footprints of the buildings is likely to benefit the industry growth. The use of green products and constructions has been found to result in improving the overall interior environment while maintaining the aesthetic appeal.

North America Green Building Materials Market Size By Application, 2012 - 2022 (USD Billion)

Source: Grand View Research

Implementation of lucrative regulatory framework aimed at encouraging the usage of green building products is expected to drive the industry growth. In addition, use of materials such as recycled concrete and permeable pavements are expected to emerge as the major trends over the forecast period. Furthermore, increasing use of products such as rammed earth, hempcrete and recycled plastic is expected to result in a heightened demand for the products.

Major reasons responsible for the growth of the green building materials market can be summarized as:

• Increasing concerns regarding unsustainable constructions;
• Heightened consumer adoption;
• Favorable governmental support and regulatory framework; and
• Introduction of new and innovative products.

The growing use of composites and stone for the production of building roofs is expected to emerge as the major market trend over the forecast period. In addition, the market for green building materials for structural constructions accounted for a market revenue of 64.9% in 2017, according to Grand View Research, Inc. Abundant availability of the green materials required for the production of structural components emerged as the primary reason for the high segment share. The segment is also predicted to register fastest gains at a CAGR of 11.4% from 2015 to 2022 driven by increased adoption of such products in industrial and commercial constructions.

Global Green Building Materials Market Share, By Product, 2017 (%)

Source: Grand View Research

The use of such products for building interiors is expected to gain traction on account of superior aesthetic appeal. In addition, the use of the products for the production of abstract interiors is likely to drive industry growth over the forecast period.

The demand for green building materials for insulation in buildings realized revenue of 49.01 billion in 2017, according to analysts at Grand View Research, Inc. Rising use of naturally sourced insulations is expected to contribute to the industry growth over the forecast period.

The market in the Asia Pacific is expected to realize high gains over the forecast period on account of the burgeoning building and construction industry in the region coupled with rising awareness regarding the usage of such products. The growth of the market in Europe and North America is expected to be spurred primarily by the governmental efforts and efforts by the commercial and institutional establishments to gain LEED certification.

The industry exhibits a high level of forward integration with the raw material suppliers involved in the production of construction components, primarily due to limited integration cost and high profit margins. The market space is expected to turn highly competitive in the wake of notable adoption of such products, favorable governmental regulations and the presence of a limited number of companies.

The market entry of a number of players is expected to result in an increase in the trade volume of products that, in turn, is likely to result in a decreased dominance of the regional players. This is anticipated to result in a decline in the price of the products, further advancing the adoption of such materials.