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This LCA study addresses the research gap concerning the comprehensive environmental implications of using paving block aggregates (PBA), derived from crushed waste concrete paving blocks (CPB), as a sustainable replacement for natural aggregates in cementitious materials. While the concrete industry faces twin challenges—high CO2 emissions from cement and the massive ecological toll of extracting 20 Gt/year of natural aggregates—a systematic life cycle assessment of this specific waste stream was necessary, especially one that considered potential material interaction trade-offs. The study’s conclusions offer critical insight into achieving genuine sustainability. Consistently, cement production was identified as the overwhelming environmental hotspot, contributing over 90% of the global warming potential (GWP) across all scenarios. This finding indicates that even substantial changes in aggregate sourcing can only deliver limited GWP reductions unless accompanied by strategies targeting cement-related emissions. While substituting natural aggregates with PBA generally provided environmental benefits, a crucial trade-off was identified: the significantly higher dosage of superplasticizer required to maintain the workability of the PBA mixes. For mortar, the burden from the increased plasticizer became a major secondary hotspot, occasionally offsetting the gains from aggregate replacement. In these scenarios, the contribution of admixtures to the total GWP was sufficiently high to reduce or negate the environmental benefits achieved through aggregate substitution. In contrast, aggregate replacement proved more favorable in concrete than in mortar, as the concrete scenarios showed a weaker correlation between environmental impact and plasticizer use. The authors conclude that future strategies must prioritize reducing cement content and, critically, systematically consider the necessary use of admixtures to ensure that the intended environmental improvements are genuine and not counteracted by the side effects of material substitution. The quantified LCA results demonstrate that cement reduction offers the highest mitigation potential, while admixture optimization is essential to prevent secondary environmental hotspots, particularly in mortar applications.