Excavated soil and rock (ESR) and dredging spoils (DDS) account for 23 % of the total EU waste generation in 2020. This study performs a life cycle assessment and life cycle costing to quantify the potential environmental and cost savings resulting from increasing the level of ESR and DDS prepared for reuse and recycled in comparison to the business-as-usual practice. Scenarios for the waste management pathways based on the status quo, technical feasibility or normative impositions are assessed, including the potential contribution to achieving the European Green Deal goals. Results show that promoting preparing for reuse and recycling could lead to non-negligible GHG reductions (up to 3.6 Mt. CO2 eq.) and economic savings (EUR 12.3 billion) annually. Depending upon the scenario, 0.2 % to 1 % of the net annual GHG emissions reductions sought by the European Green Deal could be facilitated by scaling up improved circular management of ESR and DDS at the EU level. Finally, the study highlights the main barriers to scaling up to more circular (i.e., preparing for reuse and recycling) and better performing management options in Europe. The results provide new insights for the European Green Deal and circular economy policymaking for CDW. Display omitted •Excavated soil and dredging spoil account for 23 % of the total EU waste generation.•Circular strategies have great potential for environmental and economic benefit.•Life cycle assessment and costing quantifies likely environmental and cost savings.•Preparing for reuse and recycling lead to savings of up to 3.6 Mt. CO2 eq. annually.•Economic savings could be between EUR 6.8 and 12.3 billion annually.