The Dutch Government has prioritized the construction sector for a circular economy transition. This research aims to understand the circular transition in the context of the Netherlands’ construction and demolition waste management system. By using a mix-methods approach based on systems analysis and a material flow model, this study assesses the environmental impacts of 7 identified policies. The results found that implementing mandatory pre-demolition audits performed the best in increasing the upcycling and reuse rate from 8% to 23% by not only focusing on source reduction but also prioritizing reuse. The policy measure which focuses on waste identification, separation, and collection at the source with sorting obligations performed the best to recover the most amount of waste (20.3 million tonnes/year) and increase the total recovery rate to 83%. A scenario analysis done by clustering policies for a strategic focus found that recovering more waste on its own will not reduce carbon emissions in the long run unless it’s redirected towards low-carbon destinations. A recommendation to design effective circular policies for waste management is to include carbon emissions and upcycling and reuse-based indicators. From an academic perspective, this study integrates a partial life-cycle assessment into a material flow analysis by integrating carbon emissions into a material flow model. By synthesizing and using a multi-criteria framework to calculate potential impacts, this research adds to a growing literature in policy design. The mix-methods approach used can also be adapted to other waste-based industries with a similar supply chain background.