The article explores the creation of a closed-loop production and consumption value chain, based on a case study carried out on the island of Bornholm, Denmark. Tests and demonstration of practices and procedures to reuse and recycle construction and demolition waste were conducted, including: (1) developing and implementing resource mapping and selective demolition procedures at three rural demolition projects, (2) assessing the CO2 reduction potentials associated with recycling the selected materials, (3) assessing the value and potential business models that could support the utilization of the materials, and, (4) creating a network between local stakeholders. Based on these activities, the article analyses and discuss economic and practical barriers and potentials for looping materials from demolished buildings back into the construction of new buildings. Finally, the article discusses how the lessons learned from Bornholm could be transferred to other islands and remote areas that are considering adopting a circular economy in their construction and demolition sectors.