In this study, our aim was to explore the potential energy savings obtainable from the recycling of 1 tonne of Construction and Demolition Waste (C&DW) generated in the Metropolitan City of Naples. The main fraction composing the functional unit are mixed C&DW, soil and stones, concrete, iron, steel and aluminium. The results evidence that the recycling option for the C&DW is better than landfilling as well as that the production of recycled aggregates is environmentally sustainable since the induced energy and environmental impacts are lower than the avoided energy and environmental impacts in the life cycle of recycled aggregates. This LCA study shows that the transition to the Circular Economy offers many opportunities for improving the energy and environmental performances of the construction sector in the life cycle of construction materials by means of internal recycling strategies (recycling C&DW into recycled aggregates, recycled steel, iron and aluminum) as well as external recycling by using input of other sectors (agri-food by-products) for the manufacturing of construction materials. In this way, the C&D sector also contributes to realizing the energy and bioeconomy transition by disentangling itself from fossil fuel dependence.