Construction is bad for the planet. This startup's solution is to assemble buildings like they're flatpack furniture.

• Spanish startup 011h is betting on timber as a humble hero to ease the climate and housing crises.
• It's making materials in a factory and then assembling buildings on-site — like Ikea furniture.
• The key challenge will be making the model economically viable.

When Gillis Lundgren, a furniture designer and founding employee of Ikea, couldn't fit a table he needed into his car, he had a stroke of genius: take the legs off. That moment went on to define IKEA's furniture strategy and, subsequently, modern living. Lundgren didn't invent flat-pack furniture, but his company helped take it mainstream.

Now, a Spanish construction company is hoping to spearhead the adoption of flat-pack buildings.

The company, 011h, uses timber and established sustainable-design techniques to reduce the carbon emissions of new buildings, increase their energy efficiency, and reduce the time it takes before tenants can move in.

Like Lundgren, Lucas Carné, a cofounder and the CEO of the Barcelona-based startup, didn't invent this way to build, but he's betting on his technology skills to bring it to scale.

The building sector is not on track to reach 2050 net-zero goals and was responsible for 37% of energy and operational carbon emissions in 2021. Activity is unlikely to slow down as the global population approaches 10 billion and demands a commensurate rise in housing stock. There is already a global housing shortage; the World Bank expects it to affect 1.6 billion people by 2025.

"If we want to fight climate change and shortage of affordable living, it's like doing these three things at a time: building net zero with reliable capacity and competitive economics," Carné said.

Founded in 2020, 011h uses a combination of sustainable materials, passive-design principles, and digital workflows to solve building challenges including scale, scheduling, and tight margins, with the end goal of helping solve societal challenges.

"People thinking about low-energy design have been around since the 1970s, and particularly the oil shock of '73, but it's been given real relevance by climate change," John Brennan, a sustainable-architecture professor at the University of Edinburgh, told Insider.

Deploying sustainable design and materials

Passive design involves throttling energy consumption to as close to zero as possible instead of offsetting it with solar energy and heat pumps.

That means creating airtight, well-insulated buildings with highly controlled internal environments that are efficient and comfortable regardless of heating-and-cooling systems. It's like calorie counting, but for every kilowatt going in and out of the building, Brennan said.

As increasingly tight building regulations squeeze consumption, the sector has turned its attention to the emissions from materials and construction of the buildings themselves, known as embodied carbon. It also concerns the ends of the buildings' lives and how builders reuse or recycle the materials, Brennan said.

011h builds with both of these in mind. The startup uses sustainable-design principles with sustainable-building materials, including certified timber, to bring down embodied-carbon rates.

When a tree grows, it sucks up carbon dioxide. When it is cut down for timber, carbon remains stored in the wood until it burns or decays. However, engineers must source timber sustainably. Sustainability is about reducing the carbon footprint, Carné said, but it's also about preserving the environment, resources, and biodiversity.

The company tracks its timber's lifecycle to ensure the traceability of its past and its future "circularity," or reusability, and embeds this carbon footprint into designs.

It doesn't own its materials but works with industry partners to manufacture and assemble them. The timber is prefabricated, meaning manufacturers combine layers of material into thick monolithic sheets and cut them to shape.

The components then ship to be assembled on-site in the exact timeline they will be needed. Once assembled, piping, wiring, and painting are done normally. This brought down overall build time from 13 months to eight in 011h's only finished project, Carné said. Cue flat-pack buildings.

A tech-driven approach to construction

At the center of 011h's efforts is its end-to-end platform where engineers can design projects, manage them, and track them. It's pre-loaded with vetted materials, design principles, and suppliers, with the idea being that engineers can plan only environmentally friendly buildings.

It creates 3D representations of components and lists features such as structural resistance, thermal isolation, emissions data, and costs. The company plans to eventually license out the software to other architects to scale.

Construction projects can also be fully automated and tracked; 011h takes advantage of technology like image recognition and even QR codes to know exactly when components have left a factory and when they have been assembled.

The startup has completed one project so far. It needs to be occupied for a year — during each season — before the company can extract reliable insights on its operational sustainability, Carné said. But the building so far has a top energy rating. 011h committed to an 81% reduction of whole-lifecycle embodied carbon — deriving from materials, construction, and end-of-life — compared with conventional builds, but that figure will depend on whether engineers reuse the materials.

Builders need to tackle sustainability in new builds to raise the bar of construction, but they are a small fraction of housing stock, Becky Lane, a cofounder and the CEO of the retrofit startup Furbnow, said.

"Retrofitting existing homes is the larger opportunity to focus on reducing embodied CO2 in the materials used — finding suitable materials that suit the existing building can often mean less sustainable materials are used," she said.

Bringing down the green premium

The company faces one major challenge: cost.

011h currently subsidizes its builds, covering the difference in cost between a mainstream build and a sustainable one. This green premium is a symptom of a nascent industry, Carné said. The startup has raised $36 million in venture capital, according to PitchBook. Its backers include European firms Blossom Capital, Breega, Seaya, and A/O PropTech.

"Every time we do more prefab faucets, prefab closings, prefab backboards, prefab kitchen kits, then this industry will develop, grow, will have more capacity, more automation, and the price will go down," Carné said. Regulation will also play a big role as countries move to achieve net zero, he added.

For Brennan, cost remains a big "but" — even if sustainable buildings are a no-brainer. "For the most part, the housing market — certainly in the UK — is not performance-driven, it's cost-driven."

The "missing link" is how developers can sell low-embodied carbon to buyers, he said.

Carné also dreams of fully circular materials where buildings are seen as a "bank" — once a building comes to the end of its life, workers could disassemble it for its materials to be used elsewhere. He said 011h is working on a project in Rotterdam, in the Netherlands, to demonstrate this. About 35% of global waste comes from construction.

IKEA credits flat-pack furniture as a reason it was able to offer low prices. 011h, too, is focused on not just closing the green-premium gap, but making it cheaper to build greener.

"Sustainability is about the environment, social, and economic. It needs to be affordable. If it's not affordable, if people cannot pay for it, then it's not sustainable," Carné said.

In case you missed it, watch a replay of Insider's One Planet virtual event with activist and artist Elijah McKenzie-Jackson.