The ever increasing quantity of construction and demolition waste (C&DW) in Italy is presently challenging public administrators, which strive to ensure that collection and recycling are sustainably managed and need to understand whether and to what extent recycled aggregates can complement natural aggregates in a sustainable supply mix (SSM) for the construction industry. The paper presents a research aimed at analysing energy and environmental implications of the C&DW recycling chain in the administrative territory of Provincia di Torino in Northern Italy, with 2.25 million inhabitants and yearly generation of 1.8 million tons of C&DW. A combined Geographical Information System (GIS) and Life Cycle Assessment (LCA) model was developed using site-specific data and paying particular attention to land use, transportation and avoided landfill: crucial issues for sustainable planning and management. A GIS was used to handle data and information about 89 recycling plants, including technological features, output and physical–mechanical characteristics of recycled aggregate. The LCA methodology was used to identify and quantify energy and environmental loads, under different assumptions relevant to delivery distances, quality of recycled aggregates, local availability of natural aggregates and geographical coverage of market demand. The C&DW recycling chain was proved to be eco-efficient, as avoided impacts were found to be higher than the induced impacts for 13 out of 14 environmental indicators. It was also estimated that the transportation distance of recycled aggregate should increase 2–3 times before the induced impacts outweigh the avoided impacts.