“75% of existing buildings will still be in operation in 2050. This is the largest construction site of the century.”
Only a couple of decades ago, architects designed buildings hunched over their drawing boards, using pen and paper. Then came an era of computer-assisted design, when they did essentially the same thing, except faster and more efficiently on a computer. Today, GROPYUS, a technology-based construction company based in Vienna, uses automation, industrialisation, digitalisation and artificial intelligence to design buildings customised to the requirements of specific clients and plots of land in a process that instantly plans out the manufacture of a building's component parts and considers the best, most efficient way to construct and operate it.
GROPYUS’s innovative approach and automated factory creates just the right prefabricated wooden wall and slab elements for buildings, and it ships them to the construction site, ready to be fitted together on arrival. All the components – light switches, cables and water pipes – are already installed before the walls are slotted into place.
It may seem an obvious solution now that you’ve read it, but it’s the kind of innovation that is transforming the way we build. And that’s crucial, because of the extent of the housing crisis and the vital need for scalable and fast solutions.
“In Germany alone, there is a shortage of hundreds of thousands of apartments,” says Markus Fuhrmann, GROPYUS’s founder and chief executive officer.
New ideas are even more important in a sector where innovation is relatively uncommon. According to the 2024 European Investment Bank (EIB) Investment Survey, 75% of construction companies in Europe do not innovate, compared with 67% in other industries. Only 55% of construction firms use advanced digital technologies, versus 76% elsewhere. This innovation gap limits the sector’s ability to address environmental and housing concerns.
Thankfully, pioneering companies are developing solutions and investing in innovations that could transform how buildings are conceptualised, designed, constructed, operated and retrofitted.
Pioneers like GROPYUS. And Heidelberg Materials, a leading cement manufacturer working to reduce its carbon footprint. Or a group of Belgian firms creating building blocks using captured carbon, among others. And a startup that has developed a technology to measure energy efficiency in existing buildings that are candidates for refurbishment.
Here’s a report on the journey these companies are taking and how they’ll change the buildings where you live and work.
Building faster and cleaner
GROPYUS’s Fuhrmann, who had previously co-founded the multinational online food ordering and delivery service Delivery Hero, joined forces with Philipp Erler, the former senior vice-president for technology of the online retailer Zalando, and Bernd Oswald, the former chief operating officer of the timber hybrid specialist CREE Buildings, to create GROPYUS in 2019.
Unlike previous attempts at prefabricated construction, which often focused on single-family homes, GROPYUS specialises in multi-story apartment buildings. Its approach combines the age-old renewable building material, wood, with cutting-edge digital technology and automation. And it addresses several critical challenges in the construction industry:
- Environmental impact By using wood as the primary building material, GROPYUS dramatically reduces the carbon footprint compared to traditional concrete construction
- Speed and predictability Factory assembly of prefabricated modules drastically increases construction speed on site and provides shorter and more reliable timelines
- Digitalisation From initial design to final assembly, digital tools streamline the entire process
- Integration By incorporating solutions from other industries – such as automotive-style electrical connectors and cruise ship bathroom modules – GROPYUS avoids reinventing the wheel.
The European Investment Bank signed a €40 million InvestEU-backed venture debt agreement with GROPYUS in December 2023 to support the company’s research and development work.
GROPYUS
“GROPYUS is attractive because their methods are faster than traditional construction and produce up to 90% fewer CO2 emissions in the construction and operation of a building,” says Philippe Hoett of the European Investment Bank’s venture debt team. “Instead of using solid wood, they use engineered wood and build everything in a factory with high levels of automation.”
Marc Tonteling, an engineer at the European Investment Bank, highlights how thoughtfully engineered these solutions are. “They have eliminated a lot of cabling by using wireless technology,” he says. “Many of their solutions exist individually, but GROPYUS has been excellent at putting different innovations and existing technologies together into an end-to-end system.”
GROPYUS can also easily change a building’s design to suit different regulations in different countries. This will enable the company to eventually adapt its construction beyond multifamily housing to kindergartens, schools, student housing, or living arrangements for the elderly.
Decarbonising building materials
Wood is one solution for lowering the carbon footprint of construction. But most buildings today are built using cement, the “glue” in concrete. And cement production has long been one of the most carbon-intensive industrial processes, accounting for about 8% of global carbon emissions.
Heidelberg Materials, a German multinational building material manufacturer, is tackling this challenge by innovating, digitalising and improving its processes.
The company says its goal is to achieve net zero by 2050. “We’re taking the entire value chain into account,” says Wolfgang Dienemann, vice president of global research and development and innovation. “From raw materials to reuse, including optimising the product mix, making process improvements and advancing circularity across our operations.”
The European Investment Bank is supporting the company’s research, development and innovation programme with a €100 million loan signed in December 2023.
Over a third of Heidelberg Material’s revenue is already generated through their carbon-reduced and circular products, and the company aims to increase this to 50% by 2030.
Digital initiatives are another key part of the company’s strategy. “We’re leveraging artificial intelligence to continuously improve the efficiency, safety and sustainability of our production processes,” says Dienemann. The company is using tools developed in-house to forecast energy prices and plan for the best time for cement production.
However, a considerable proportion of carbon emissions generated in the process of cement manufacturing is unavoidable and cannot be tackled using established techniques, Dienemann adds. Carbon capture, use and storage is therefore another key lever to achieving net-zero carbon emissions in construction.
“It's all linked with a future move to carbon capture, when it becomes available and affordable,” says Eoin Keane, a senior engineer at the European Investment Bank. “But it’s also about reducing the need to generate CO2 in the first place.”
Dienemann agrees. “One key indicator to track our progress is the reduction of specific net carbon emissions,” he says. “We succeeded in reducing our specific net carbon emissions by a further 1.3% to 527 kg per tonne of cementitious material in 2024 and aim to lower them to 400 kg per tonne by 2030.”
Balancing sustainability and affordability in construction
Heidelberg Materials’s approach includes several innovations:
- Improving energy efficiency across production processes
- developing alternative materials that require less clinker, the limestone and clay product that’s the most carbon-intensive component of cement
- establishing advanced recycling systems for waste concrete
- preparing facilities for future carbon capture technologies.
While these innovations represent significant progress, they also highlight the complex balance between sustainability and affordability.
“This innovation is great, but it’s not going to solve the housing crisis on its own,” Keane says. “Carbon capture will drive up costs initially, so we’re looking at the long-term transformation of the industry.”
The EU financing arm’s support focuses on ensuring these research, development and innovation programmes progress, measuring advances against internal climate-related targets, rather than imposing specific technological solutions.
Turning waste to building blocks
Heidelberg Materials is not the only company working on carbon-capture solutions. Four Belgian companies – Prefer, Lhoist, Fluxys and Orbix – got together to create a masonry block that captures and stores carbon dioxide. Their technology uses industrial waste materials – steel slag from steel production – and combines them with carbon dioxide to create building blocks with properties similar to conventional concrete.
The block, which they call CO2ncrEAT, requires no cement and no heating during production, which significantly reduces its carbon footprint, and it actively sequesters carbon dioxide, creating a construction material that functions as a permanent carbon sink.
The four companies benefited from a grant from the Innovation Fund, a European Commission funding programme for innovative, low-carbon technologies, and received support from experts on the European Investment Bank’s Innovation Fund team.
- Read more about the Belgium masonry block that eats carbon dioxide.
EIB Group support
The European Investment Bank Group’s involvement in these projects extends beyond traditional financing. For startups like GROPYUS and Cedrus, the Group also provides credibility, which helps attract additional investment.
“Obviously we give them money – that’s the key support,” says Hoett, who worked on the Bank's GROPYUS loan. “But on top of that, we help increase their visibility. Our thorough due diligence serves as a stamp of approval that also helps with future capital raising.”
For established companies like Heidelberg Materials, the European Investment Bank’s focus on decarbonisation creates strong incentives for innovation. “We don’t support traditional high-carbon industry,” Keane says. “We support low-carbon technologies and the transition towards carbon neutrality.”
In addition, the European Investment Bank Group is introducing an action plan for affordable and sustainable housing – which is key part of the Pan-European Platform for Affordable and Sustainable Housing being prepared by the European Commission – under which the EIB Group intends to increase lending for housing to €4.3 billion in 2025. That money, along with advisory support, will be used for innovation, renovation and new building.
Challenges on the path to transformation
Despite promising innovations, significant challenges remain in transforming the construction industry:
- Regulatory complexity Building codes vary not just between EU countries but even within regions of the same country, complicating the deployment of standardised solutions
- Technical limitations Safety requirements, particularly fire regulations, can restrict the use of materials like wood in taller buildings
- Scale economics The cost of new construction methods typically becomes competitive only at significant production volumes, creating a challenging chicken-and-egg problem for innovators
- Industry conservatism The risk-averse nature of the construction sector slows adoption of innovative approaches, even when the benefits are demonstrated.
The sector’s environmental impact makes innovation essential. The initiatives supported by the European Investment Bank demonstrate that progress is possible.
GROPYUS already completed its first nine-story building with 54 apartments near Koblenz, Germany in 2022, and is working on three other projects, including one in Immendingen, with 116 residential units, and two in Berlin, with another 185 residential units. It also has plans to help rebuild Ukraine, where founder Fuhrmann’s wife was born.
“Our factory can do up to 3 500 apartments per year,” Fuhrmann says. “And we could go to about four times that volume at the same facility, but even that is very little.”
“I grew up in a big affordable housing project in Vienna,” he adds. “My family were working-class people. GROPYUS’s ambition is to be a company that can really ease the problem of access to affordable and sustainable housing at scale. The more companies and the more parties involved in trying to accomplish that, the stronger European countries and the European Union will be.”
Read all of our ‘Invested in Housing’ series
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