The Research Review on Life Cycle Carbon Emissions in the Operational Process of Modular Buildings

Abstract

Climate change has intensified scrutiny of the building sector, a major source of global greenhouse gas emissions. Modular construction, recognized for its environmental, economic, and social benefits, is increasingly regarded as a key strategy to achieve sustainability goals. This study systematically reviews literature from 2005 to 2025 on life cycle carbon emissions (CEs) during the operational phase of modular buildings, using the PRISMA model. A comprehensive search of Scopus, ScienceDirect, Web of Science (WoS), and relevant institutional databases yielded 1131 records, from which 34 studies were selected based on defined inclusion criteria. These studies span residential, commercial, and public buildings across Asia, North America, Europe, and Australia. Findings reveal that while carbon impacts during the construction phase of modular buildings are well documented, research on the operational phase remains limited due to data scarcity and methodological complexity. Since operational emissions typically exceed 60% of total life cycle emissions, and modular buildings offer advantages in airtightness, precision, and passive design integration, they hold significant potential for reducing emissions. This study calls for enhanced integration of technological innovation and policy incentives to support operational decarbonization and contribute to global carbon neutrality efforts.

1. Introduction

Climate change is the world’s most dangerous problem of the 21st century. As a result of the accelerated process of global industrialization and the consumption of non-renewable energy resources, vast amounts of greenhouse gases have been released, which have warmed the Earth’s temperature, causing enormous losses to the living environment of humans. It includes loss of species, loss of diversity, droughts, flooding, wildland fires, acidification of the oceans, melting of the glacial cover of the Arctic and Antarctic (NSPG), and rising sea levels [1,2,3]. These impacts pose substantial risks to global economic stability, resource availability, ecological systems, and food security, thereby threatening human survival [4,5]. In recent decades, the world’s attention has shifted toward global warming with the aim of addressing the core issue of the current model of growth in economy and searching for the realization of the low-carbon and eco-friendly model [6]. On 12 December 2015, the Paris Agreement (PA), adopted at COP21, laid the foundation for global climate action beyond 2020. The long-term carbon emission (CE) goals of the PA aim to keep the global temperature rise well below 2 °C, with an aspiration to limit the rise to 1.5 °C [7].

In this context, more and more nations have been implementing carbon neutrality policies and other measures to address climate change. China has been the world’s largest carbon emitter since 2006, with carbon dioxide (CO₂) emissions at 10.67 × 10⁹ tons in 2020, representing 30.65% of the world’s emissions [8]. In September 2020, China committed to peaking its CEs by 2030 and becoming carbon neutral by 2060, taking on the role of international climate governance and low-carbon innovation leader. This “double carbon” target has received extensive attention from scholars and policymakers around the world [9]. China’s pledge marks the beginning of an economically transformed climate, shaped by widespread changes in energy systems, industrial structure, and infrastructure. Given China’s status as the world’s largest energy consumer and GHG emitter, its building sector, especially operation-phase energy regulation and CE control, is key to reaching its climate objectives.

The construction industry accounts for a substantial portion of global greenhouse gas emissions [10], consuming approximately 35% of global energy and producing 29% of global CO₂ emissions throughout construction and operational phases [11]. In January 2025, the China Association of Building Energy Efficiency, in collaboration with Chongqing University, published the 2024 Report on CE in China’s Urban and Rural Construction Sector. Using the latest national data, this report estimated CEs from China’s construction industry at approximately 5.13 billion tons CO₂ in 2022, corresponding to 48.3% of the country’s total energy-related emissions [12]. This high proportion highlights the intensity of ongoing urbanization and development. Recent analyses by Chen et al. indicate that China’s construction sector will reach peak emissions around 2035, five years behind the national target of 2030. This delay results from structural inertia within the industry, prolonged investment cycles, and slow replacement rates of existing buildings, especially in rapidly expanding urban areas [13]. Consequently, effectively reducing CE in this sector is critically important.

To assess the environmental impact of buildings as well as their materials, parts, and systems and identify ways to reduce these impacts, numerous efforts have been undertaken. In general, life cycle studies can be broken down into three broad categories according to the scale of the examination of the environmental impact of buildings. The first is life cycle assessment (LCA), which is geared toward defining the overall environmental impact of a building through its entire life cycle. More specifically, LCA is a methodical approach to evaluating the environmental impact of a product or process by assessing its energy and material consumption, associated emissions, and potential environmental improvements. The analysis covers the life cycle of a product, process, or activity from material extraction and processing to use, reuse, maintenance, recycling, final disposal, transportation, and distribution, as well as manufacturing. The International Organization for Standardization (ISO) has developed a series of LCA standards addressing the technical and organizational issues of LCA. The second is life cycle energy assessment (LCEA), which quantifies primarily the energy use of a building during its entire life cycle as a supply input. The third is life cycle CE assessment (LCCO₂A), which quantifies the emission of a building during its entire life cycle.

Life cycle CE represents the total carbon footprint from initial design through end-of-life (EoL) disposal. Major emission sources include manufacturing energy-intensive construction materials (e.g., cement, steel), energy consumption during construction processes (machinery use, transportation), operational energy use (air conditioning, heating, lighting), and emissions from building demolition and waste management.

From a life cycle perspective, the operational phase typically accounts for more than 60% of a building’s total CEs, spanning the stages from conceptual design, construction, and operation, to maintenance and eventual demolition [14,15,16,17]. As a result, much of the existing research on building CEs has focused either on the entire life cycle [18,19,20,21,22,23] or on the emissions specifically during the operational phase [24,25,26,27]. With the implementation of energy-saving regulations, CEs during building operation have notably decreased. In contrast, emissions during construction have gradually risen in proportion, although they remain lower than operational emissions [28]. Notably, modular construction has garnered significant attention within the industry due to its numerous advantages over traditional methods, including faster and safer construction, better time predictability, higher construction quality, fewer on-site workers, reduced resource waste, and smaller environmental impacts [29,30,31,32,33,34]. Moreover, the existing research on life cycle CEs in modular buildings may differ considerably from that of conventional building projects.

The primary advantage of modular construction lies in its high level of standardization and factory-based production. By preassembling most building components—including structures, walls, floors, roofs, and interior fittings—in controlled factory environments, modules can be efficiently transported to construction sites for rapid assembly. Compared to traditional methods, modular construction significantly shortens construction time, enhances productivity, and minimizes environmental impact. This method is widely applied in various repetitive-unit building types, such as apartments, hotels, schools, hospitals, offices, and dormitories. Though not a novel concept, modular construction is advanced in countries like the United States, Japan, Sweden, and the United Kingdom, and is rapidly gaining traction in Australia, Germany, the Netherlands, China, and Hong Kong [33,35,36,37]. For instance, the UK’s housing sector began adopting prefabricated modular systems in 2004, targeting at least 25% modular construction for new social housing schemes [29], significantly stimulating the expansion and adoption of modular construction.

There is strong evidence demonstrating that modular construction is more effective than conventional methods in addressing global demand [38,39]. In China, due to increased housing demand and a powerful manufacturing foundation, modular construction has become one of the important technologies for addressing housing demand with its speed and efficiency [40]. One of the primary objectives of contemporary architecture is to enhance sustainability, which encompasses minimizing the adverse effects of the building sector on the economy, environment, and society. Waste generation during the construction process is one of the major environmental issues. Statistics reveal that the construction sector accounts for 32% of worldwide energy consumption, 30% of CO₂ emissions, and 30–40% of waste production [41]. Construction waste generally comprises materials like gypsum, concrete, rubber, bricks, asphalt, and chemicals, which correspond to approximately 10% to 30% of all landfill waste [42]. However, the waste from the construction sector is unevenly distributed across the world; 60% in Chicago, USA, 50% in the UK, and 37% in Hong Kong [43]. To mitigate this issue, many governments have introduced landfill fees, incentivizing factory-prefabricated construction as a sustainable waste-reduction method [44].

Several studies have estimated the capabilities of modular construction in mitigating the impact on the environment. A study conducted by Lawson et al. estimates that modular building systems can save landfill waste by at least 70%, decrease transportation vehicle visits by as much as 70%, decrease disturbance and noise by 30–50%, and decrease reportable accidents by more than 80%, compared with traditional ways of constructing buildings [45]. Although modular construction mitigates the impact on the environment considerably, its biggest benefit is still the quick process of constructing buildings. It is indicated in reports that the nine-story apartment complex, One9, in Melbourne, Australia, took only 5 days to install, whereas another eight-story modular structure took 8 days to assemble and fully complete. In China, the world’s first stainless steel low-carbon building, “Living Tower,” was opened on 16 July 2021. Constructed with the use of a modular structure, the 11th floor of the building took only 28 h. It is reported that the modularity of the Living Tower enhanced transportation along with logistics, reducing the overall cost by 20% to 40%, with five times the energy efficiency in comparison to conventional buildings. Zenga and Javor reported that a 14-month conventional process can be achieved in 4 months through modular assembly. A number of studies have reported that the application of modular construction can reduce the building cycle by 50–60% in comparison to conventional processes [29,32,45,46]. Saved construction time not only saves the overall cost of the building but also significantly saves the additional cost related to the delay because conventional on-site processes are time-consuming as well as labor-intensive.

Numerous policy initiatives—such as China’s national “dual carbon” strategy—have promoted emission reductions, yet construction sector efforts predominantly focus on material innovation and carbon management during the construction phase. However, the operational phase, characterized by energy consumption for lighting, heating, cooling, and equipment use, accounts for the largest share of CE throughout the building life cycle. Modular construction, featuring off-site prefabrication, energy efficiency, and environmental sustainability, aligns closely with national and global agendas for green buildings and low-carbon development. Driven by research and policy support, it is increasingly recognized as an effective tool for achieving built-environment sustainability [47,48]. Beyond improving construction efficiency and reducing emissions, modular construction minimizes resource consumption and waste generation. Nevertheless, systematic studies specifically addressing operational-phase emissions in modular buildings remain scarce. This study addresses this gap by evaluating how modular construction contributes to China’s carbon neutrality objectives through operational energy improvements. Systematic reviews provide essential guidance for developing policies, management practices, and future research by synthesizing existing knowledge. The current review adopts a rigorous, transparent, and reproducible methodology, providing robust, evidence-based support for the widespread adoption of modular construction in sustainable development.

According to the current literature, existing studies have primarily focused on CE and economic benefits during the construction phase of modular buildings, while in-depth discussions on CE during the operational phase remain relatively scarce. Therefore, this study aims to fill this gap by establishing a comprehensive framework that integrates research on life cycle CE of modular buildings over the past two decades (2005–2025) to provide an in-depth analysis of the CE impacts during the operational phase.

The specific aims of this study are as follows: (a) to systematically review the literature from the past two decades, providing the most up-to-date and comprehensive analysis of life cycle CE during the operational phase of modular buildings; (b) to present a systematic framework that can support future optimization and decision-making regarding CE in the design, operation, and management of modular buildings; (c) to offer clear guidance for policymakers, industry professionals, and scholars in advancing the widespread adoption of modular construction technology to achieve low-carbon building objectives. We anticipate that this study will contribute theoretical support to the further application of modular construction technology, inform policy development, and guide industry practices, ultimately helping the construction sector move toward low-carbon and sustainable development goals.

2. Methods

2.1. Search Strategy

This systematic review adhered to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines [49,50]. The PRISMA process is a 27-item checklist for the selection, appraisal, literature screening, and synthesis of literature as a standardized approach for the conduct of systematic reviews [50]. It commenced with literature searches from multiple databases for the selection of the relevant studies, exclusion of the duplicate studies, screening of the titles and the abstracts, and assessment of the eligibility of the full-text as per pre-determined inclusion criteria [50]. Relevant publications concerning life cycle CE during the operational phase of modular buildings were identified from major academic databases (Scopus, ScienceDirect, WoS), Google Scholar, and specialized institutional repositories.

The literature search included publications from the past 20 years (4 February 2005, through 13 February 2025) to ensure the retrieval of the latest developments in the field. The literature selected should be in the English language with the following publication types: Article, Review, Conference Paper, Book Chapter, Book, and Conference Review.

The following search string was applied to the title, abstract, and keywords sections of all databases to ensure consistent search terminology, facilitating future replication of the search:

• ((“Modular construction” OR “Modular buildings” OR “Prefabricated building” OR “Off-site construction”) AND (“operation phase” OR “building performance” OR “building operation” OR “post-construction”) AND (“life cycle CE” OR “LCA” OR “life cycle” OR “life cycle performance” OR “carbon footprint” OR “carbon reduction” OR “CE” OR “carbon management” OR “sustainability” OR “environmental impact assessment”))

The search covers research areas including: Engineering, Environmental Science, Energy, Materials Science, Social Sciences, Business, Management and Accounting, Earth and Planetary Sciences, Economics, Econometrics and Finance, and Multidisciplinary fields.

2.2. Eligibility Criteria

The inclusion criteria for the current research are based on research area and language. Specifically, selected literature needed to address life cycle CE during the operational phase of modular buildings, emphasizing emission control, measurement, or optimization. Detailed inclusion criteria are as follows (

Table 1. Summary of the criteria used in the systematic literature review.

Criteria	Details
Literature sources	Databases, search, engine, specialized websites
Fields	Engineering, environmental science, energy, materials science, social sciences, multidisciplinary
Research Methods	Quantitative research (LCA, life cycle carbon emissions assessment), qualitative research (case studies, policy analysis, etc.), technical application research.
Study period	2005–2025
Language	English
Document types	Article, review, conference paper, book chapter, book, and conference review
Keywords	(“Modular construction” OR “Modular buildings” OR “Prefabricated building” OR “Off-site construction”) AND (“operation phase” OR “building performance” OR “building operation” OR “post-construction”) AND (“life cycle carbon emissions” OR “life cycle assessment” OR “life cycle” OR “life cycle performance” OR “carbon footprint” OR “carbon reduction” OR “carbon emission” OR “carbon management” OR “sustainability” OR “environmental impact assessment”)

):

• Examination of the CE from the operating stage of modular buildings, energy use, equipment use, and maintenance.
• CE assessments using LCA methods, covering all stages from production, transportation, installation, operation, maintenance to demolition.
• Exploration of carbon reduction measures and management technologies such as energy-saving measures, use of renewable energy, and use of smart building technologies.
• Comprehensive optimization of CE management in modular buildings from social, economic, and ecological perspectives.

Additionally, the literature should discuss CE strategies and policies within the life cycle of modular buildings and evaluate the effectiveness and applicability of different management measures.

Excluded research areas include, but are not limited to:

• Research unrelated to the operational phase or life cycle management of modular buildings.
• Research that focuses solely on individual factors such as building materials, structures, or equipment (e.g., CE analysis of high-efficiency materials or individual building equipment) without addressing overall CE management.
• Studies on non-modular building types (e.g., traditional or non-modular buildings’ CE).
• Research unrelated to energy management or CE (e.g., studies on building comfort, market analysis, climate change predictions, etc.).

This study also does not cover literature without carbon reduction as the main area of research but with non-priority research areas like the environment or climatic changes.

Moreover, the review considered only peer-reviewed English-language literature, ensuring broad scholarly accessibility and international relevance. Although excluding non-English sources may introduce regional bias—especially from regions with significant modular construction activities, such as Japan and Germany—this approach aligns with standard systematic review protocols and international academic practices. Future studies could consider multilingual sources to enhance comprehensiveness through translation or cross-validation methods.

2.3. Selection Process

The first search produced 1131 results. After the exclusion of 138 duplicate results, 993 results proceeded to the screening stage. Two researchers screened each article individually for compliance with the pre-agreed inclusion criteria. Screening occurred in phases: the title screening, the screening of the abstract, and the assessment of the full text. At each stage, research that did not meet the pre-agreed criteria was progressively excluded until the last literature relevant was selected.

In the screening at the title level, the titles of all the articles were screened separately by two reviewers. In the screening process, the title should specifically address the operating stage of the modular buildings as well as the management, assessment, and optimization of the life cycle CE. If the title is not specifically about the operating stage of the modular buildings or the management, assessment, and optimization of the life cycle CE, or the research is conducted about other buildings (like traditional buildings, low-energy buildings), the article was eliminated.

For example, the research paper “Review on CE of commercial buildings” [51], despite being as relevant as can be to the field of CE research, dealt with the problem of commercial buildings versus modular buildings, and thus was excluded since it did not meet the subject criteria. After the screening of the titles, 476 articles were excluded as non-topical, leaving 517 articles for the screening of the abstract.

During the abstract screening stage, the reviewers also assessed the articles against the inclusion criteria based on their abstracts. The abstract screening criteria were more precise, requiring the abstract to explicitly address the life cycle CE management or carbon reduction strategies of modular buildings with a focus on the operational phase of modular buildings. Abstracts referring to LCA processes or CE optimization strategies for modular buildings were excluded.

For example, the article “Energy use in the life cycle of conventional and low-energy buildings: A review article” [52], even with the use of the word “building life cycle” in the title, essentially dealt with the energy efficiency of low-energy buildings compared with traditional buildings, and the abstract also did not deal with modular buildings or CE control; thus, it was excluded as well. After screening the abstracts, 287 articles were excluded, and 230 articles proceeded to the assessment of the full text.

In the stage of the full-text assessment, the remaining articles were closely read by the reviewers to ascertain their compliance with all the inclusion criteria. Full-text assessment criteria demanded the articles present a detailed discussion of life cycle CE management of modular buildings with or without the use of empirical evidence or concrete case studies, with emphasis given to CE assessment, optimization, and reduction measures at the operating stage of the modular buildings. Other life cycle phases like the design stage or the construction stage alone or articles with no relevance to CE in the modular buildings were excluded. Excluded also were articles written in languages other than the required.

For example, the article “Greenhouse gas emissions during the construction phase of a building: A case study in China” [53], despite dealing with the issue of the emissions of greenhouse gases, considered only the stage of the buildings under construction without considering the emissions of carbon at the operating stage of the modular buildings, and therefore came under exclusion.

One of the included articles after full-text screening is “Operational Energy Saving and Carbon Reduction Benefits of Concrete MiC Building’s Envelope” [54]. This study is focused on energy efficiency and carbon reduction during the operational stage of concrete modular integrated construction (MiC) buildings, with the purpose of examining the energy-saving enhancement and CE by the optimum design of the building envelope. This article was included in the final list as it met all the eligibility criteria. Out of the 230 articles sought for retrieval, 53 articles were excluded due to being not retrieved. Following the full-text screening, 143 articles were excluded, while 34 articles were found eligible based on all the inclusion criteria and thus were successfully included in the current systematic review.

2.4. Data Items

Two researchers independently performed data extraction and subsequently compiled the collected information into a structured database using Microsoft Excel. The extracted information included the article title, authors, publication date, geographic region of the study, research methodology, main findings, discussions, and funding sources.

2.5. Synthesis Methods

Statistical analyses were conducted using Microsoft Excel (version 2019, NY, USA). Results from the literature review were summarized and presented through tables, charts, and geographical distribution maps created using QGIS software (version 3.40.0, Hannover, Germany).

To clearly delineate the life cycle stages and align with prominent research domains identified in reviewed studies, this research adopts a five-stage life cycle framework for modular buildings, based on the phase-based categorization methodology proposed by Sharma and Tavares [55,56]. Specifically, the life cycle stages include:

• Design and construction phase: Encompasses early design decisions and construction planning.
• Production, transportation, and on-site installation phases: Covers off-site prefabrication, logistics, and modular assembly.
• Operational phase: Includes energy consumption and maintenance during the building’s use.
• Dismantling and disposal phase: Considers the EoL management of modular components, including transportation, waste handling, and disposal.
• Lifecycle phase: Applies to studies addressing the entire life cycle (cradle-to-grave) impacts without isolating specific phases.

2.6. Bias and Certainty Assessment

To ensure transparency and reliability, a structured qualitative approach was applied to assess potential biases in the reviewed literature. Building upon established methods from modular construction LCA research, bias was categorized into four dimensions:

Methodological bias: Identified if studies solely relied on simulations without empirical validation, lacked sensitivity analysis, or used unclear LCA boundaries.

Geographic bias: Noted when studies derived findings exclusively from one region or climate zone without sufficient justification or acknowledgment of limitations.

Life cycle bias: Occurred when studies neglected one or more significant life cycle stages (such as operational or EoL phases) yet generalized their conclusions.

Financial or institutional bias: Defined by cases where funding sources or policy agendas potentially influenced research framing or interpretation.

Each reviewed study was evaluated against these dimensions and categorized into low, moderate, or high bias levels. Studies demonstrating clear methodologies, cross-regional applicability, and comprehensive life cycle coverage were considered low risk. Moderate bias was assigned to studies acknowledging one or two moderate limitations. High bias applied to studies exhibiting significant methodological omissions or narrow assumptions lacking sufficient analysis. This bias classification informed the interpretation and reliability of results, further detailed in Section 3.3.

3. Results

3.1. Study Selection

The initial search yielded 1131 articles (991 from databases and 140 from specialist websites). After removing 138 duplicates, 993 articles remained for screening. During title and abstract screening, 816 irrelevant articles were excluded, leaving 177 articles for full-text evaluation. Following full-text review, 143 articles failed to meet inclusion criteria. Ultimately, 34 studies were included in this systematic review. The selection process is illustrated in Figure 1.

3.2. Study Characteristics

The geographical distribution of included studies (Figure 2) reveals significant regional variation. Of the 34 studies, 20 were conducted in Asia (18 from China, 1 from Japan, and 1 from Pakistan). Four studies originated from North America (all from the United States), four from Europe, and one from Oceania (Australia). Additionally, five studies involved multiple countries without clear geographic affinity.

This uneven geographical representation indicates that research on life cycle CEs in modular buildings is particularly concentrated in Asia, notably China, with fewer contributions from regions like North America and Europe. Such regional imbalance does not necessarily imply a lack of modular construction activities elsewhere. Instead, two factors might explain this skew: firstly, regions with mature modular industries, such as Japan or Germany, often publish relevant research in local languages, excluding them from our English-language review criteria and global databases. Secondly, research priorities differ regionally; European studies frequently focus on circularity and material recovery at EoL, whereas North American studies tend to emphasize net-zero operational energy performance. These thematic differences likely contribute to the observed geographic gaps.

Reviewed studies displayed considerable methodological variation in LCA, particularly regarding system boundaries, functional units, and data sources. System boundaries ranged from cradle-to-gate analyses (excluding operational or EoL phases) to comprehensive cradle-to-grave assessments, impacting comparability across studies. Most studies employed a normalized functional unit of 1 m² gross floor area, though some evaluated emissions at a whole-building scale. Additionally, transportation emissions associated with module delivery and on-site assembly were inconsistently reported, especially in cradle-to-gate studies. Regarding operational data, most research relied on energy simulations (e.g., EnergyPlus, eQuest), whereas only a few, such as Hou et al., attempted validation through short-term empirical measurements, including thermal performance monitoring and blower-door tests [54,57]. These studies revealed minor discrepancies between simulated and empirical data (±1.2 °C for temperature and ±16 lx for illuminance), indicating acceptable accuracy of simulation models. Nevertheless, the reliance on simulation highlights a significant gap concerning long-term validated energy performance data in modular building research, especially under diverse climatic conditions. These methodological disparities require cautious interpretation of LCA comparisons and highlight the need for standardized system boundaries and more consistent hybrid LCA approaches in future research (

Table 2. Summary of energy data types applied in operational carbon emission analyses of modular buildings.

Study	Data Type	Description	Tool/Method	Remarks
Hou et al., 2024 [54]	Simulated + Measured	EnergyPlus + real-time thermal and airflow tests; deviation: ±1.2 °C, ±16 lx	EnergyPlus + sensors	High credibility due to field verification
Zhu et al., 2018 [58]	Simulated Only	DesignBuilder simulation of multiple operational scenarios, no field validation	DesignBuilder	No real-world calibration
Ji et al., 2018 [59]	Simulated Only	Pure simulation using EnergyPlus, no measured data	EnergyPlus	Lacks empirical support, potential bias
Faludi et al., 2012 [60]	Simulated Only	Scenario-based modeling with PV integration, no empirical validation	LCA + PV scenario model	Innovative scenario but not validated

).

A prominent 2022 Chinese paper [61] calculated the China’s prefab buildings’ CEs by employing Building Information Modeling (BIM) and presenting a novel means of assessment. It concluded that China’s prefabs’ CEs in operating and keeping it running phases were much higher than that of material manufacturing’s stage at approximately 91% of the total it covers. They provided China’s construction industry’s green growth theory as well as design experience of green building that is applicable to other parts of Asia. Moreover, Yue Teng et al. systematically summarized 27 prefabrication building case studies, demonstrating the emission-reducing potential of prefabrication buildings. From the study’s findings, it was revealed that although there is decreased CEs of prefabrication buildings in general, the decline is highly disparate. Building densification, materials inside of building structure, and prefabricating percentage in specific regions may exert significant effects on reducing CEs. This study is of significant reference value to international application and popularization of prefabrication buildings in future [62]. Additionally, Vasishta et al. conducted a comparative LCA and Life Cycle Cost Analysis (LCCA) of prefabricated versus cast-in situ buildings in the U.S. market. Results demonstrated that prefabricated buildings produce lower CEs, particularly during operational and demolition phases, highlighting significant emission reduction benefits through wider adoption in the United States [63].

In terms of the literature references (

Table 3. Details of the articles selected for this review (n = 34).

No.	Research Stage	Key Findings	Research Emphasis	Research Method	Study Area	Reference
1	Life Cycle	Research highlights that the operational phase, especially energy use, dominates a building’s life cycle, while the construction phase, particularly material production and transport, also significantly impacts the environment. The article reviews LCA findings for residential and commercial buildings, underscoring the importance of integrating LCA into design to minimize environmental impact.	LCA	Review	Multiple countries	Sharma et al., 2011 [55]
2	Life Cycle	The study finds that prefabricated buildings have significant advantages in reducing raw material use and waste, but they have higher embedded energy. Steel-structured buildings, with their reuse potential, can greatly reduce environmental impact. Although prefabricated buildings have higher embedded emissions, their overall greenhouse gas emissions over the lifecycle are still lower than traditional buildings, especially when considering future material reuse.	Assessment of greenhouse gas emission	LCA	Australia	Aye et al., 2012 [64]
3	Operational phase	The study finds that for highly energy-efficient modular buildings, minimizing energy impact during the operational phase is crucial, as it has the greatest environmental impact across the building’s lifecycle. As buildings approach net-zero energy standards, manufacturing-related CEs and resource consumption become more significant, while transportation and waste management impacts are less important. Energy efficiency and clean energy generation are key design considerations for high-performance buildings.	LCA	LCA	USA	Faludi et al., 2012 [60]
4	Production, transportation, and on-site installation phases	The semi-precast method reduces greenhouse gas emissions by about 3.2% compared to conventional construction methods. The largest source of emissions is embedded greenhouse gas emissions from building materials, which account for more than 85% of total emissions. The negative impact of transporting prefabricated parts offsets some of the emission reductions.	Assessment of greenhouse gas emission	The process-based quantitative model	China	Mao et al., 2013 [65]
5	Life Cycle	Modular buildings have advantages over traditional construction methods in multiple sustainability dimensions (environmental, economic, and social), particularly in energy efficiency and CEs.	LCA	Review and LCA	Multiple countries	Kamali & Hewage, 2016 [46]
6	Life Cycle	The study finds that the precast in situ construction method reduces GHG emissions by approximately 3.1% compared to conventional methods. The primary source of GHG emissions is the embodied GHG in building materials, with additional emissions from material transportation and operational energy consumption. The precast method reduces emissions by minimizing the use of construction materials, especially concrete and bricks.	Assessment of greenhouse gas emission	Quantitative model	China	Ji et al., 2018 [59]
7	Life Cycle	The study compares the lifecycle costs of prefabricated composite buildings versus traditional masonry buildings in different locations (Los Angeles, San Francisco, and El Paso). It is concluded that while prefabricated buildings may be economical to construct initially, their total life cycle costs are higher in the long run due to higher operating and maintenance costs. At the same time, location and climate factors have a significant impact on the lifecycle cost of buildings.	Environmental and cost performance	Life cycle cost analysis (LCCA)	USA	Samani et al., 2018 [66]
8	Production, transportation, and on-site installation phases	The study shows that although most prefabricated buildings show advantages in reducing CEs, some cases have increased emissions due to factors like the lack of material reuse. Especially in the use of steel and wood structures, the recycling potential of materials affects the final carbon emission performance.	Life cycle CE assessment	Systematic Literature Review (PRISMA)	Multiple countries	Teng et al., 2018 [62]
9	Life Cycle	Prefabricated buildings exhibit environmental benefits during the operational phase due to enhanced thermal performance, although the energy reduction potential is lower during the embodiment phase.	Energy saving and carbon reduction	LCA	China	Zhu et al., 2018 [58]
10	Life Cycle	The study shows that prefabricated buildings can significantly reduce construction time, save costs, and perform excellently in terms of environmental impact. However, despite their advantages in reducing resource waste and improving efficiency, the widespread adoption of prefabricated buildings still faces challenges in design, labor, transportation, and initial capital.	Performance evaluation	Review	Multiple countries	Ferdous et al., 2019 [67]
11	Production, transportation, and on-site installation phases	The study shows that although the CEs of fully prefabricated buildings are lower than those of traditional buildings, excessive prefabrication increases CEs in the production and transportation phases. The most effective emission reduction strategy is partial prefabrication (such as prefabricated floor slabs and stairs), rather than fully prefabricating all components.	life cycle CE assessment	LCA	China	Du et al., 2019 [68]
12	Life Cycle	Prefabricated buildings show lower energy consumption and CEs at all stages, especially during the operational phase, where improved thermal insulation significantly reduces air conditioning energy use and CEs. Additionally, prefabricated buildings outperform traditional buildings in resource use efficiency and waste reduction. The study also shows that an optimal assembly rate (around 60%) plays an important role in optimizing CEs and costs.	Environmental and cost performance	LCA	Japan	Wang et al., 2020 [57]
13	Life Cycle	Net zero energy design has the lowest life cycle impact. The life cycle impact of off-grid design is significantly higher than that of net zero energy design. Reuse of container structures significantly reduces life cycle impacts. Climate change is less sensitive to life cycle effects.	Energy saving and carbon reduction	LCA	China	Satola et al., 2020 [69]
14	Life Cycle	Prefabrication can reduce the environmental impact of buildings at the end of their useful life, with the potential to reduce overall construction costs and increase productivity in the construction industry. Global warming potential and non-renewable energy use are significantly reduced when prefabricated methods are adopted.	Environmental and cost performance	LCA	EU-27	Tavares et al., 2021 [56]
15	Life Cycle	Through life cycle analysis and thermal performance assessment, the study shows that prefabricated walls can significantly improve building energy efficiency and reduce greenhouse gas emissions, especially during building renovation and updates.	Thermal and environmental performance	LCA and Thermal Performance Assessment	China	Yu et al., 2021 [70]
16	Construction Phase	This paper quantitatively assesses the GHG emissions of modular and traditional buildings, demonstrating the advantages of modular buildings in reducing greenhouse gas emissions. Particularly in the production and transportation of building materials, modular buildings significantly reduce GHG emissions by minimizing material waste and using low-density materials.	Assessment of greenhouse gas emission	Quantification of GHG Emissions	Pakistan	Pervez et al., 2021 [71]
17	Production, transportation, and on-site installation phases	The study shows that in the production, transportation, and on-site installation phases, the main source of CEs in prefabricated buildings is the production phase, particularly the production of concrete and rebar.	Life cycle CE assessment	LCA	China	Zhou, 2021 [72]
18	Life Cycle	This paper analyzes five representative residential prefabricated building projects, using LCA and BIM technologies to assess CEs and compare them with traditional buildings. The study shows that prefabricated buildings have lower CEs at multiple stages, especially in the production of building materials and the construction phase, demonstrating significant carbon reduction potential.	Life cycle CE assessment	BIM and LAC	China	Li et al., 2022 [61]
19	Production, transportation, and on-site installation phases	This paper compares the environmental performance of prefabricated and traditional buildings in China using LCA, covering the stages of material production, transportation, and on-site construction. The study shows that prefabricated buildings perform better on several environmental impact indicators, particularly in energy consumption and greenhouse gas emissions.	Energy saving and carbon reduction	(LCA	China	Tian & Spatari, 2022 [73]
20	Life Cycle	The environmental performance of prefabricated buildings mainly focuses on reducing CEs, improving energy efficiency, reducing material consumption, and lowering air and noise pollution. The production and construction phases of the life cycle contribute the most to environmental impact and cost, while research on the use phase and end-of-life stage is relatively limited.	Environmental and cost performance	LCA	Multiple countries	Aghasizadeh et al., 2022 [74]
21	Life Cycle	Prefabricated buildings are superior in life cycle environmental performance over poured in site (CIP) systems, with a 21% lower total life cycle cost and greater economic efficiency.	Environmental and cost performance	LCA	USA	Vasishta et al., 2023 [63]
22	Production, transportation, and on-site installation phases	Prefabricated buildings have higher initial CEs than conventional buildings. Despite their higher CEs, prefabricated buildings outperform conventional and green material buildings on the sustainability index. The study suggests that prefabricated buildings are more conducive to reducing environmental load and promoting carbon emission reduction.	Life cycle CE assessment	Carbon Emission Emergy Factor mode	China	Zhao et al., 2023 [75]
23	Production, transportation, and on-site installation phases	This paper uses LCA to analyze the differences in greenhouse gas emissions between modular housing built in California factories and traditional construction methods. The study finds that modular buildings can reduce GHG emissions while meeting housing demand, with higher emission reduction potential in certain areas of California due to the location of factories and transportation factors.	Assessment of greenhouse gas emission	LCA	USA	Greer & Horvath, 2023 [76]
24	Life Cycle	The study emphasizes the comparison of CEs between prefabricated light-steel buildings and traditional cast-in-place buildings, promoting prefabrication technology as a better solution for reducing GHG emissions in the building sector	Life cycle CE assessment	LCA	China	Cai et al., 2023 [77]
25	Life Cycle	This study develops a life cycle carbon emission calculation system to quantify emissions from prefabricated buildings at each stage. An empirical analysis of a Nantong prefabricated building project reveals that the operational phase contributes the most to CEs, followed by the production and processing phases. The study suggests strategies to reduce emissions, including increasing assembly rates, adopting low-energy construction methods, and utilizing renewable energy sources such as solar panels.	Life cycle CE assessment	LCA	China	Chen & Peng Mao, 2023 [78]
26	Production, transportation, and on-site installation phases	The study finds that although prefabricated structures have higher CEs during production and transportation, CEs can be effectively reduced by increasing the assembly rate, particularly by reducing on-site labor and machinery energy consumption.	Life cycle CE assessment	Carbon Emission Estimation	China	Huang & Wang, 2023 [79]
27	Life Cycle	Modular timber structures have strong carbon storage capacity, and replacing concrete with wood can significantly reduce CEs. The wood in a single module stores an average of approximately 13.42 tons of CO2.	Life cycle CE assessment	Review	Europe	J. Li et al., 2023 [80]
28	Life Cycle	The study analyzes a prefabricated high-rise residential building in London, finding that modular construction achieved approximately 10% lower life-cycle CEs than traditional cast-in-place methods. The study underscores the potential of modular strategies to meet low-carbon benchmarks while identifying limitations in current industry datasets on embodied and operational emissions.	Energy saving and carbon reduction	LCA	United Kingdom	Arslan et al., 2023 [81]
29	Life Cycle	The study compares seismic-resistant modular structural systems through cradle-to-grave LCA, finding that steel volumetric modules with dry connections performed best in life cycle carbon and sustainability. Operational energy was standardized across systems, highlighting the role of structural design in carbon outcomes.	Life cycle CE assessment	LCA	Spain	Guaygua Quillupangui et al., 2024 [82]
30	Developed design stage	Standardization does not always reduce embodied CEs; the combination of standardization and customization can effectively reduce the carbon emission of prefabricated parts. Improving the adaptability of templates is more effective in reducing carbon than standardizing elements.	Life cycle CE assessment	Genetic algorithm	China	Xiang et al., 2024 [83]
31	Production, transportation, and on-site installation phases	Concrete modular buildings have lower CEs during the construction phase, but the CEs in the initial phase are more complex compared to traditional construction methods, influenced by building layout and height. Optimizing module design, particularly addressing the “double-panel issue,” can significantly reduce CEs and provide practical recommendations for future carbon emission assessment and reduction in modular buildings.	Life cycle CE assessment	LCA	China	Zhang et al., 2024 [84]
32	Life Cycle	Prefabricated buildings have lower CEs over their life cycle compared to cast-in-place buildings, with the main sources of CEs being building materials in the construction phase and energy consumption in the operational phase.	Life cycle CE assessment	Carbon emission factor method	China	Jiang & Bai, 2024 [85]
33	Operational phase	Concrete prefabricated buildings (MiC) can significantly reduce energy consumption and CEs compared to traditional buildings during the operation phase, especially through optimizing the design of the building envelope, improving thermal insulation performance, and rational selection of building materials. These measures help the building achieve greater energy efficiency	Energy saving and carbon reduction	Combination of Real-time Testing and Simulation	China	Hou et al., 2024 [54]
34	Dismantling, transportation, waste handling and waste disposal stages	In the end-of-life (EoL) phase, steel-framed modular buildings have significant carbon reduction potential. By achieving a higher module reuse rate, CEs can be significantly reduced, especially for steel modular buildings, where module reuse plays a crucial role.	Life cycle CE assessment	LCA	China	Wen et al., 2024 [86]

), 19 articles are from ScienceDirect, 11 are from Scopus, and 2 are from Springer Link. A single article each is from ASCE and Edpsciences. Most of the articles addressed in the present review are research studies. More than three quarters (26 articles) are research articles, with the remaining being 5 review articles and 3 conference articles. The primary research focuses of these selected studies encompass seven categories: Life Cycle CE Assessment, Environmental and Cost Performance, Greenhouse Gas Emissions Assessment, Energy Saving and Carbon Reduction, LCA, Performance Evaluation, and Thermal and Environmental Performance. Among these, Life Cycle CE Assessment represents the predominant research area, featuring 14 articles and indicating increasing scholarly attention toward holistic life cycle decarbonization in modular construction. Additional themes, including energy efficiency, economic-environmental trade-offs, and environmental impact assessment, collectively offer a comprehensive exploration of sustainability topics, closely aligning with the objectives of this review (Figure 3).

Concerning research distribution across life cycle stages (Figure 4), most studies (20 out of 34; 58.8%) examine the full life cycle, highlighting the prevalent academic emphasis on comprehensive carbon emission analyses spanning all project phases. Studies specifically focused on production, transportation, and on-site installation collectively account for nine articles (26.5%), underscoring the substantial role of embodied carbon during prefabrication and assembly. In contrast, only two studies (5.9%) explicitly address the operational phase, indicating a clear research gap despite the operational stage’s substantial contribution to total life cycle emissions. Research explicitly targeting design and construction, as well as dismantling and disposal phases, remains scarce, with only two (5.9%) and one (2.9%) studies, respectively. These observations suggest that, although modular building research frequently adopts a life cycle approach, increased scholarly attention should be directed toward operational emissions and end-of-life impacts.

Among the 34 reviewed articles, the vast majority (30 studies) were published in the second half of the selected review period (2015–2025). The year 2023 had the highest number of publications (eight articles), while the years 2011, 2013, and 2016 had the fewest, with only one article each (

Table 4. Number of articles based on the study years.

No.	Year	Number of Articles (n = 34)
1	2011	1
2	2012	2
3	2013	1
4	2016	1
6	2018	4
7	2019	2
8	2020	2
9	2021	4
10	2022	3
11	2023	8
12	2024	6

). This trend demonstrates a significant increase in research attention to modular buildings and life cycle CE assessment, especially after 2016. Such growth likely reflects heightened global awareness regarding CEs in the construction sector, continuous advancements in energy-saving technologies, and stronger policy support. It is anticipated that, as sustainable construction practices and green building technologies mature, the volume of relevant research will further increase, producing more actionable and empirical findings.

3.3. Risk of Bias in Studies

Of the 34 reviewed studies, 9 were classified as high risk, 12 as moderate risk, and 13 as low risk. Methodological bias was most common, identified in 15 studies that primarily relied on simulation without sufficient calibration or empirical validation. Geographic bias occurred in six studies that generalized findings based on limited regional contexts or single-city case studies. Life cycle bias appeared in seven studies, where comprehensive cradle-to-grave analysis was lacking.

Certain studies, such as those by Ji et al. and Ferdous et al., derived conclusions from highly specific simulations without addressing broader climatic variations or policy contexts, thus limiting their external validity [59,67]. In contrast, studies by Wang et al. and Kamali and Hewage demonstrated comprehensive analysis and methodological transparency, earning a low-risk rating [46,57]. Notably, only four studies explicitly acknowledged their methodological limitations.

Bias classifications are summarized in

Table 5. Summary classification of risk of bias in reviewed studies.

Study	Country	Bias Type(s)	Bias Level	Author Acknowledged?	Impact Summary
Ji et al. 2018 [59]	China	Methodological, Scope	High	No	Simulation only, lacks validation and operational data
Hou et al. 2024 [54]	China	Methodological	Moderate	No	Empirical envelope data, but lacks scenario sensitivity
Zhu et al. 2018 [58]	China	Geographic, Scope	Moderate	Yes	Limited to North China, no longitudinal validation
Wang et al. 2020 [57]	China	Low	Low	Yes	Balanced LCA with hybrid data model
Tavares et al. 2022 [56]	EU	Geographic	Moderate	Yes	EU stock-level projection; no global generalization
Kamali & Hewage, 2016 [46]	Canada	Low	Low	Yes	Methodologically robust review across dimensions
Ferdous et al. 2019 [67]	Australia	Geographic	Moderate	No	Focused on Melbourne; limited global transferability
Li et al. 2023 [80]	Denmark	Financial, Geographic	High	Partially	Case-based review of government-funded projects
Aye et al. 2012 [64]	Australia	Methodological	Moderate	Partially	Lacks calibration for reuse scenarios
Sharma et al. 2011 [55]	India	Low	Low	Yes	Transparent LCA across full building life cycle

. This categorization facilitates assessment of the systematic review’s validity and highlights areas for improving methodological consistency and broader contextual applicability in future research.

4. Discussion

4.1. Research Strategies for Different Stages of the Life Cycle and the Necessity of Individual Studies

In life cycle research, there is a differentiation in research approach at different phases (Figure 5). This is because the CEs and energy efficiency at each stage varies, as does the optimization process for each. As can be seen from the analysis of the selected research works (Table 3), research involving the entire life cycle favors systemic comparison and a systemic approach. These research works incorporate the environmental impact of the entire life cycle (such as the production, transportation, construction, use, and dismantling) in the decision-making process. These studies commonly employ methods such as LCA or Life Cycle Cost Analysis (LCCA) to evaluate and compare building systems, aiming for overall sustainability and CE optimization [63,66,67].

In contrast, single-stage research mostly employs LCA models in the measurement of the CEs of different modes of construction. For example, these research works calculate the CEs of pre-fabricated buildings versus traditional buildings (such as cast-in-place buildings). Few research works apply more complex modes of measurement.

Research strategies for the operating stage usually merge LCA models with actual operating data to model building energy use and CE trends throughout the life cycle of the building. For instance, Miaomiao Hou et al. utilized a combination of actual measurement through experiments and simulation procedures to assess the energy use and heat performances of buildings [54]. For the transportation, production, and on-site installation phases, CEs and the use of resources usually receive attention. Some research also makes use of parameter sensitivity analysis, which includes changing the parameters of the designs (such as the percentage of the use of prefab parts, transportation distances, and the use of materials) to assess their CE impact [68,76]. Some research also makes use of the subproject quota method as well as the PKPM-PC computer program in calculating CEs, specifically for the use of different parts of the buildings (such as concrete, steel, etc.) [79]. At the developed design phase, Yiming Xiang et al. employed a genetic algorithm to create a number of design variants and optimize the design via structural analysis [83]. During the construction stage, papers used GHG emission quantification to measure emissions from diverse sources during construction, such as inherent emissions from materials, material transport, and on-site fuel and electricity usage [71].

The rationale for stage-specific research is clear. Each life cycle stage has unique emission characteristics and optimization opportunities. Consequently, targeted research methods enable precise CE assessments and facilitate more effective emission reduction strategies at each stage. Although full life cycle studies provide essential comparative insights for overall emission optimization, targeted stage-specific studies enhance precision and effectiveness of emission reduction measures throughout a building’s entire life cycle.

4.2. Research Characteristics and Regional Differences at Each Life Cycle Stage

4.2.1. Stage-Specific Characteristics of CE Research

CE studies at various life cycle phases have distinct research directions and approaches. During design, research is centered on reducing embodied carbon by evaluating and optimizing design options. Parametric modeling methods are often used for that reason, methodically varying parameters like building shape and structure materials to analyze life cycle carbon effects. The main aim at this initial phase is to reduce emissions by making informed, optimized design choices, thereby establishing a sustainable platform for future life cycle phases [58,67,83].

The study in the installation, transportation, and production phases is concerned with the CEs of the installation, transportation, and on-site installation of building material. The study in this phase is concerned about reducing CEs by using materials of lower carbon content, optimizing material processing, and enhancing transportation paths. LCA models are extensively applied in this phase to analyze the CEs created in materials processing and transportation and to contrast the CEs of various construction methods (on-site casting vs. prefabrication). Researchers are able to define the critical phases that heavily impact CEs. Sensitivity analysis (parameter sensitivity analysis) is also regularly utilized to consider how design parameters, like material choice and distance of transportation, impact CEs [62,67,68].

The research at the operating stage is also focused on energy consumption and CEs when the building is being utilized, the energy efficiency of the building, as well as the carbon abatement potential. By analyzing the energy consumption when the building is being utilized (e.g., heat, air conditioning, electricity), the sustainability of the building can be assessed. At this stage, researchers tend to combine the simulations of the energy use of the building with the LCA in terms of the CEs when the building is being utilized. They use actual operating data as well as predictive models to assess the role of varied building technologies (e.g., low-carbon solutions, energy-efficient materials, optimization of the building envelope) in mitigating emissions [58,60,85].

In the EoL stage and recycling and deconstruction stage, carbon savings and CEs are the focus. LCA is applied by researchers to identify the system boundaries of the EoL stage first, then develop an EoL carbon estimation model through literature reviews and objectives. Field surveys, literature reviews, and data collection are applied in gathering carbon source data and emissions factors. Case studies and sensitivity analyses are then used to validate these models and assess how factors like transportation distances and module reuse rates influence CEs, guiding practical measures for improved sustainability [86].

4.2.2. Comparative Analysis of Operational Carbon Efficiency

Relative to traditional cast-in-place construction, modular buildings generally have better performance in terms of reducing operational CEs, most importantly owing to higher-quality building envelopes, superior airtightness, and reduced thermal bridging arising from off-site manufacturing. Hou et al. identified an 8–11% operational CEs cut in MiC buildings in southern China [54]. Wang et al. also recorded significant HVAC energy savings in Japanese modular buildings, while Faludi et al. showed in simulation-based LCAs that modular houses have lower life cycle CEs in various usage scenarios [57,60]. These findings underscore the operational carbon reduction potential of modular construction.

CE properties differ based on various modular construction methods. Volumetric modular construction (VMC) using fully enclosed three-dimensional (3D) factory-built modules generally has better thermal performance and air-tightness due to factory environments. Such an advantage is most significant in colder climates, where thermal loads for heating command high demands on operational energy consumption [54,60]. Additionally, VMC’s standard interfaces allow for simpler integration of passive design measures and renewable energy systems, like rooftop-mounted photovoltaic (PV) arrays and hybrid ventilation systems. Panelized modular construction (PMC) by contrast, based on flat elements assembled on-site, is more efficient to deliver and more flexible to design but demands careful joint detailing for preserving thermal continuity. Without careful detail, panelized systems can suffer from higher thermal bridging and air leakage, slightly reducing energy efficiency, according to Aye et al. and Ferdous et al. [64,67]. Recent innovations using volumetric cores and panelized infill illustrate hybrid modular systems’ potential to achieve maximum structural efficiency as well as operational energy efficiency, especially for residential buildings of mid-rise scale [57]. An awareness of these typological variations is critical when comparing operational CEs of modular buildings in different contexts.

4.2.3. Regional Differences in Modular Building Carbon Research and Mitigation Strategies

Research on life cycle CEs in modular buildings demonstrates substantial regional differences globally, particularly regarding research methodologies, policy frameworks, technical priorities, and life cycle stage emphases (

Table 6. Summary of regional carbon reduction strategies in modular construction.

Region	Primary Strategy	Key Focus	Typical Methods
China	Policy-driven promotion of prefabrication and modular construction	Construction-phase emission control, envelope insulation, MiC system optimization	Energy simulation + short-term empirical validation; LCA; hybrid modeling
Europe (e.g., Denmark, Sweden)	Circular economy integration and EoL recovery	Material reuse, design for disassembly, full life cycle closure	Hybrid LCA; disassembly scenario modeling
North America	Operational energy optimization and passive design	HVAC systems, building envelope, renewable integration	Simulation-based LCA; occupant behavior modeling
Australia	Life cycle cost–carbon trade-offs	Balancing embodied and operational carbon; economic analysis	Simulation + cost-benefit LCA modeling
Japan	Precision industrialized timber systems	Timber modular prefabrication; thermal insulation; compact forms	Envelope modeling; material-specific analysis

). In Asia, carbon reduction strategies for modular buildings are driven predominantly by policy directives and industrialization efforts, with distinct patterns evident across Mainland China, Hong Kong, and Japan. A common regional emphasis is the widespread use of prefabrication to reduce embodied carbon and enhance construction efficiency. Mainland China’s policies on carbon peaking and green building standards have significantly influenced research toward industrialized concrete modular systems, improved building envelope insulation, and standardized construction processes [54,58]. Complementing these efforts, Hong Kong introduced streamlined procedures promoting MiC, reducing both construction timelines and on-site emissions [86]. Japan similarly excels in modular construction, emphasizing precise timber prefabrication and stringent thermal performance regulations, but faces limitations in English-language publications evaluating life cycle CEs, restricting global comparisons and dissemination of results. Despite advancements, Asia still encounters challenges, including high initial costs, complex logistics, and limited EoL research [86].

Hybrid LCA, combining Process-based Life Cycle Assessment (PLCA) and Input–Output Analysis (IOA), enhances the completeness and precision of environmental impact evaluations. While PLCA offers detailed material-level inventories, IOA captures broader economy-wide emissions often excluded in traditional PLCA frameworks. By integrating both methods, hybrid LCA provides a comprehensive assessment of indirect emissions from supply chains, transportation, and assembly processes common in modular construction [87,88]. For instance, Zhu et al. applied hybrid LCA to quantify energy and carbon implications of prefabricated buildings in China, incorporating detailed construction data and national economic indicators [58]. Wang et al. employed a similar approach in Japan, evaluating environmental and economic performance, including upstream emissions and material reuse [57].

In Europe, particularly Scandinavian countries such as Denmark and Sweden, hybrid LCA methods are increasingly aligned with circular economy strategies. Modular timber buildings in these regions are intentionally designed for disassembly, reuse, and end-of-life (EoL) recovery, enabling measurement of carbon reductions that surpass traditional life cycle boundaries [56,80]. The widespread availability of comprehensive LCA databases and favorable policy environments across Europe further supports these developments. Similar trends are observed in recent studies conducted elsewhere in Europe. For example, Arslan et al. performed a life cycle carbon assessment of a modular high-rise residential structure in the UK, demonstrating approximately 10% lower emissions than conventional construction methods, highlighting prefabrication’s potential to achieve low-carbon targets [81]. In another European case, Guaygua Quillupangui et al. analyzed seismic-resistant modular systems in Spain through a cradle-to-grave LCA approach, concluding that steel volumetric modules employing dry connection techniques offered the most sustainable solution [82]. Collectively, these studies broaden the geographical context of modular construction research in Europe, reflecting a growing emphasis on aligning modular approaches with decarbonization and circular economy goals.

In North America, particularly the United States, research predominantly emphasizes operational energy efficiency through passive design, HVAC optimization, and improved building envelope systems. LCA methodologies frequently support the design of net-zero energy buildings and evaluate the performance of advanced materials. For instance, Faludi et al. and Aye et al. modeled various energy scenarios incorporating rooftop PV systems and occupant behavior patterns, providing valuable insights into life cycle energy use and associated CEs [60,64]. However, research on long-term material recycling and EoL recovery remains limited compared to European studies focusing on circular economy practices.

In Australia, strategies primarily address the balance between embodied and operational CEs, often highlighting life cycle cost–carbon trade-offs. Empirical, case-based simulations, such as those conducted by Ferdous et al., commonly evaluate these relationships. Additionally, studies by Aye et al. emphasize optimizing environmental performance through material selection and reuse strategies, notably involving steel, timber, and concrete, aiming to foster more sustainable construction practices.

Research in developing regions and the Middle East (e.g., Pakistan) mainly addresses cooling optimization due to the warm climate. Initial LCA studies in these regions indicate that modular buildings can achieve emission reductions of approximately 47%; however, overall research activity remains limited, relying heavily on international emission factor databases with significant uncertainties (±30%) and constrained by weaker policy frameworks and infrastructure support [71,89].

Climate conditions critically influence regional energy demand and CE profiles. In colder regions such as Scandinavia and northern China, heating loads significantly elevate operational CEs unless mitigated by advanced insulation and efficient HVAC systems. In contrast, in warmer climates such as southern China and Australia, cooling loads dominate energy consumption, emphasizing the need for passive cooling strategies to reduce operational emissions effectively.

Modular construction is widely recognized as an effective carbon-reduction strategy globally, yet regional pathways vary considerably. In Europe, particularly in Denmark and Sweden, research emphasizes circular economy principles, focusing on timber-based modular systems. Studies often incorporate EoL phases, design-for-disassembly strategies, material recovery practices, and hybrid LCA methods to comprehensively quantify life cycle carbon savings. In Asia, modular construction research is predominantly policy-driven, concentrating on reducing construction-phase emissions and enhancing industrialized building systems. Mainland China prioritizes modular concrete systems, thermal envelope retrofitting, and standardized green building policies. Hong Kong accelerates MiC adoption through streamlined administrative processes, reducing project durations and site emissions. Japan emphasizes high-precision modular timber systems, prioritizing thermal performance and material efficiency. North American research primarily addresses operational CEs, employing LCA tools to support energy-efficient designs, net-zero energy targets, HVAC optimization, and occupant behavior analysis. However, comparatively less attention is paid to material circularity and EoL management. Australian studies often balance embodied and operational carbon, frequently employing empirical simulations to explore life cycle cost–carbon trade-offs and material reuse opportunities. In the Middle East and South Asia, modular construction addresses rapid building requirements under hot climate conditions. Although initial studies show potential emission reductions, research remains constrained by incomplete life cycle datasets, dependency on international emission factors, and limited institutional backing.

Future studies should address gaps by improving demolition-phase data collection and waste management tracking in Asia, broadening cradle-to-grave LCA coverage in developing regions, and advancing renewable energy integration and energy storage within modular construction research in Europe and North America.

4.3. Deficiencies and Challenges in Research on the Operational Phase

Among the 34 articles under review, there are exactly two dealing with CEs at the operating stage of buildings. Ten years ago, Jeremy Faludi and his colleagues targeted the use of the LCA tool in the modular buildings’ design decision-making process in the pursuit of sustainability. In their research, they considered a pre-assembled modular office building in San Francisco, USA and established that the operating stage accounted for the majority of the environmental impact of the building, with energy use being the biggest contributor. The researchers concluded that, unless the building is energy-efficient, the impact of the design stage and the manufacturing stage is quite minimal. They concluded that the LCA tool is essential in the process of sustainable material and energy-efficiency selection for buildings to be more sustainable and energy-efficient through their life cycle [60].

More recently, Hou et al. conducted a comparative LCA analysis of MiC buildings versus traditional prefabricated methods, using a real MiC project in Shenzhen, China. Their findings indicated that MiC buildings achieved approximately 8% lower CE during operation through envelope optimization, contributing to a 6% overall life cycle emission reduction compared to traditional approaches. This illustrates the potential of envelope optimization in reducing operational energy use and associated emissions [54].

Both studies affirm modular construction’s advantages in operational carbon reduction. Yet, despite these promising results, limited research has explored integrating renewable energy technologies with modular construction. Faludi et al. simulated PV integration scenarios, showing substantial reductions in operational emissions [60]. However, renewable energy sources such as geothermal or wind energy remain largely overlooked in current modular building research. Addressing this research gap presents an important future direction, highlighting the need to explore deeper synergies between modular construction and decentralized renewable energy solutions.

Modular construction offers substantial environmental advantages during the construction phase, including accelerated project timelines, reduced on-site labor requirements, and minimized material waste. Although the operational phase contributes a larger share of total life cycle CEs—primarily through energy consumption—research has traditionally focused more heavily on emissions during construction. This emphasis arises partly from the relative ease of quantifying emissions related to material production and assembly, and the clear link between these emissions and material choices. Consequently, both academic research and industry practice have historically underestimated operational carbon impacts in modular buildings [60]. Several challenges contribute to this imbalance:

• Data Scarcity and Simulation Uncertainty: Among the 34 studies reviewed, none provided a comprehensive longitudinal analysis involving continuous, multi-year measurement of actual operational energy performance. Instead, most research relied on simulation approaches using software tools like EnergyPlus, eQUEST, or BIM-integrated LCA platforms. Only a limited number of studies, such as Hou et al., have combined simulations with short-term empirical data, including thermal monitoring and blower-door testing [54]. This reliance on simulated or assumed data underscores the shortage of long-term empirical evidence, especially in regions with variable climates, resulting in considerable uncertainties in operational energy predictions. The scarcity of comprehensive operational data is not merely due to practical constraints—such as data accessibility and the high costs associated with extended monitoring—but also reflects a historical research orientation that has inadequately addressed long-term operational performance in modular construction.
• Complexity and Variability of Operational Phase: The operational stage involves complexities beyond simple energy consumption, including equipment maintenance, operational efficiency, and overall system performance. These aspects depend heavily on external factors such as climate variability and occupant behavior, complicating accurate prediction and measurement. Additionally, privacy concerns further limit access to operational performance data, creating barriers to effectively assessing and managing CEs. Consequently, despite energy efficiency measures implemented during the design and construction stages, controlling operational-phase emissions remains challenging without standardized processes and robust management practices.
• Lack of Comparisons with Traditional Buildings: Although modular construction is widely recognized for its lower CEs during the construction phase, comprehensive comparative analyses of operational carbon performance against traditional buildings remain limited. Such comparisons are essential, especially regarding long-term energy efficiency, maintenance demands, and other operational characteristics. The current shortage of comparative studies restricts the scope and depth of LCA involving modular buildings.
• Technological Limitations and Development Potential: Modular construction and building design have evolved considerably, but optimization solutions for the operating stage have been underdeveloped, notably in the areas of energy management, optimization of the equipment, and sustainable use. Technological limitation also constrains the scale of associated research.
• Energy Efficiency and Renewable Energy Challenges: Reducing CEs through energy efficiency measures and the use of renewable energy is the primary approach at the operating stage of modular buildings. Yet, numerous modular buildings continue to encounter technical and financial impediments at the early design stage. Consequently, even when the structure incorporates energy-efficient insulation mechanisms for energy savings, the actual benefit of these measures largely hinges upon their implementation at the construction stage and the operating stage.
• Insufficient Policy Frameworks: Reducing carbon in the operational phase also needs extensive policy support and industry standards, which are currently lacking in most countries and regions. The absence of these frameworks slows the advancement of research and implementation in this field.

4.4. Future Research Direction

• Enhance Empirical Research and LCA Model Precision: Current studies largely depend on simulations rather than measured empirical data, introducing uncertainties into operational CE assessments. Future research should prioritize long-term, real-world monitoring of modular buildings under varied climatic conditions to validate and refine LCA models. Employing hybrid LCA methodologies—combining process-based and input–output analyses—is also recommended. Such integrated approaches capture direct and indirect emissions more effectively, especially across complex modular supply chains.
• Develop Multidimensional Assessment Frameworks: Besides conventional LCA modeling, adopting multidimensional assessment frameworks would enable a more comprehensive evaluation of the various factors influencing CEs across modular buildings’ life cycle. For example, Xu et al. proposed a sustainable benchmarking framework integrating topic mining and knowledge graph technologies [90]. This approach systematically identifies emission sources throughout the design, construction, and operation phases, supporting multi-level CE indexing and targeted energy optimization at each life cycle stage. Additionally, Liu and Zhou introduced an extended input–output framework emphasizing supply-demand interactions [91]. Their approach analyzes CE transfer effects along modular construction industry chains, including transportation and material supply sectors, thereby facilitating more precise emission assessments across interconnected industries.
• Enhance Operational Performance through Intelligent Technologies: Emerging intelligent building management technologies provide promising solutions for carbon management in modular buildings. For instance, Chen et al. applied Visual Question Answering (VQA) combined with deep learning algorithms, integrating image recognition and data analytics to improve energy efficiency management [92]. Leveraging AI technology during the operation phase can enable real-time energy consumption monitoring and dynamic adjustments of building systems, thus optimizing energy utilization patterns. Similarly, Liu and Zhou proposed energy efficiency optimization methods originally developed for transportation, providing valuable foundational insights for modular construction applications [91]. Additionally, advanced deep learning models, such as graph neural networks, have demonstrated significant potential for enhancing energy efficiency. Integrating such intelligent systems with optimized lighting and high-performance HVAC technologies could further ensure optimal energy use and carbon mitigation during modular buildings’ operational phase.
• Embed low-carbon Design Thinking at Early Stages: Integrating low-carbon design strategies from the early design stage is crucial. Gong et al. suggest adopting methodologies such as Quality Function Deployment (QFD) to align customer demands with low-carbon objectives throughout the modular building design [93]. This approach ensures user needs and environmental goals are comprehensively addressed. Moreover, the deep integration of high-performance building envelopes and passive design strategies within prefabrication systems can significantly enhance life cycle energy efficiency, effectively minimizing CEs from initial planning to operational phases.
• Advance Material and Technological Innovation: Advancing material innovation and technological integration is essential to unlock the carbon reduction potential of modular construction. Zhao et al. emphasize that incorporating green design concepts and energy-efficient technologies within modular structures significantly reduces life cycle energy consumption [94]. Bio-based materials, such as cross-laminated timber (CLT), substantially lower embodied carbon [95], while recycled steel and concrete composites enhance resource circularity [96]. In addition, innovative insulation solutions and phase-change materials can effectively improve buildings’ thermal performance [97]. Technologically, 3D printing, automated module fabrication, and digital twin technologies offer precise control, reduced waste, and enhanced carbon efficiency [98]. Future research should further explore synergies among advanced materials, modular system optimization, and emerging low-carbon technologies to maximize environmental performance throughout the building life cycle.
• Promote Policy–Technology Synergies and Industry Capacity-building: Furthermore, the study should also strengthen the synergy between policy and technology, promote government reforms in policy incentives, green building certification, and industry standards, improve the technical standards and guidelines for modular building design, and promote the establishment of related training systems to enhance the acceptance and application of the technology in the industry [99]. This will better support the low-carbon transformation of modular building technology in the operation phase. In terms of policy incentives, Smart City Pilot Policies (SCPP), as a policy tool to promote low-carbon development, plays an important role in managing CEs from modular buildings. Aiting Xu et al. demonstrated that SCPP can effectively reduce CEs from industrial enterprises by strengthening environmental regulation and promoting green technology innovation. In a similar vein, modular buildings, as integral components of smart cities, can facilitate the implementation of green building technologies and curtail CE contingent on policy interventions [100]. A carbon efficiency trap was found by Tong Li et al. in the research of CEs from 5G networks, which could also be observed during the operational phase of modular buildings [101]. Additionally, Li et al. identify a carbon-efficiency trap in energy-intensive technologies, analogous to issues potentially emerging in modular building operations when energy demands are mismatched. Implementing deep reinforcement learning and advanced energy management systems, such as the DeepEnergy approach [102], represents a viable strategy to overcome such inefficiencies and optimize energy performance.
• Foster Cross-Industry Collaboration for Systemic Decarbonization: Regarding the cross-industry synergy, the importance of such collaborative efforts in the reduction of CEs was emphasized by Xiao Liu and Xiaoyong Zhou, particularly in conjunction with industries such as building material suppliers and transportation companies [91]. Furthermore, a reduction in CEs during the production, transportation, and construction phases of modular buildings can be realized based on the collaboration with suppliers of low-carbon materials and green transportation companies. For instance, the selection of building materials with minimal CEs, alongside the utilization of low-carbon transportation methods, can contribute to the mitigation of the carbon footprint of buildings from the beginning. As mentioned in the framework proposed by Xiaofeng Xu et al., the implementation of a cross-industry collaboration demonstrates promising potential in the optimization of the management of CEs within various industries [90]. Additionally, this framework contributes to the promotion of a comprehensive assessment and collaborative management based on multi-dimensional data and indicators. Moreover, the low-carbon progress of the modular buildings and the green transformation of the building industry chains would be further accelerated by this cross-industry collaboration.
• Leverage EoL Potential and Circularity: Although this study primarily addresses operational emissions, the EoL stage represents a critical yet underexplored opportunity in modular construction. Off-site manufactured modules inherently facilitate disassembly, reuse, and recycling, presenting substantial potential to reduce embodied carbon and minimize waste. Future modular designs should systematically incorporate design-for-disassembly (DfD) principles to allow structural components to be easily separated, reused, or recycled without significant deterioration. Additionally, circular economy strategies such as material passports and standardization of modular elements can further enable closed-loop material circulation. While these circular approaches have gained traction in European modular timber systems [56,80], their application in Asian contexts remains limited. Hence, future research should prioritize EoL modeling and implement comprehensive material tracking systems post-occupancy, supporting the development of climate-resilient and resource-efficient modular buildings globally.

5. Conclusions

This study systematically reviewed 34 peer-reviewed studies to examine CE characteristics across the life cycle of modular buildings, particularly emphasizing operational-phase emissions. Findings reveal a significant increase in related research since 2015; however, the existing literature predominantly emphasizes environmental benefits achieved during the construction phase, leaving operational CEs comparatively under-investigated. Given that energy consumption during building operation typically constitutes the largest portion of total life cycle emissions, more research attention should be dedicated to optimizing operational energy performance. Modular construction—especially volumetric systems—demonstrates clear advantages in airtightness, thermal insulation, and passive design integration, significantly enhancing operational energy efficiency compared to traditional construction methods.

Future research should further investigate technological innovations, including advanced energy management systems, artificial intelligence integration, and renewable energy utilization, supported by comprehensive policy frameworks. A holistic, integrative approach encompassing optimized designs, careful material selection, enhanced envelope performance, and renewable energy incorporation will be crucial to substantially reduce the carbon footprint of modular buildings across their entire life cycle.

At the regional level, modular construction is recognized as an effective low-carbon strategy, yet approaches differ significantly by region. In Europe, research prioritizes circular economy principles and EoL material recovery supported by hybrid LCA methods. Asian countries emphasize top-down, policy-driven promotion of industrialized modular systems, whereas North American studies pursue net-zero targets through technological innovation and optimized building performance. Conversely, developing regions such as South Asia and the Middle East primarily adopt modular construction to manage climatic extremes, though comprehensive life cycle data remains scarce. These regional variations highlight the necessity for tailored frameworks that integrate technological, policy, economic, and social factors. Such integrated approaches will enable systematic reduction of life cycle CEs, thus contributing meaningfully to global carbon neutrality targets.

Nonetheless, this study has several limitations. Firstly, the literature reviewed is primarily English-language, which introduces potential geographical bias by underrepresenting countries with significant modular construction expertise, such as Japan and Germany. Secondly, most existing studies rely heavily on simulated data rather than empirical post-occupancy measurements, limiting the precision of operational carbon estimates. Thirdly, while the current analysis focuses mainly on environmental and economic dimensions, broader social implications of modular construction must be acknowledged. Recent literature increasingly acknowledges modular building’s contributions to social sustainability alongside its recognized environmental and economic benefits. Ziaesaeidi and Noroozinejad emphasized that prefabricated housing enhances social resilience, inclusivity, and affordability by shortening construction timelines, enabling adaptable layouts, and supporting disadvantaged communities [103]. Off-site manufacturing processes also generate employment opportunities and foster safer, more efficient construction conditions. Kamali and Hewage argued that despite existing literature’s environmental emphasis, social dimensions such as community cohesion, occupant well-being, and post-disaster reconstruction capabilities warrant integration into future LCAs [46]. Furthermore, Ferdous et al. highlighted modular construction’s potential to enhance livability and urban adaptability, particularly within dense urban housing scenarios [67]. These collective insights indicate modular construction’s substantial capacity to deliver comprehensive sustainability outcomes beyond carbon mitigation.

Finally, rapid advancements in artificial intelligence technologies—such as deep learning and graph neural networks—offer promising opportunities for intelligent building management systems. These innovations can facilitate real-time monitoring, predictive energy management, and automated adjustments of building energy consumption patterns, significantly enhancing operational carbon efficiency throughout a building’s life cycle.