Remanufacturing is the industrial process of returning used or worn-out products to a new functional state and has been developed in China within the framework of the circular economy. Due to the recent mass production and use of construction machinery in China, there will be a huge remanufacturing potential in coming years. In this paper we take the loading machine as a case study, and use life cycle analysis to compare the environmental impacts and cost of a manufactured loading machine (S1) with its remanufactured counterparts under two return-back scenarios: remanufacturing at the original factory (S2) and at regional dealers (S3). A life distribution model was used to estimate loading machine scrappage. The results showed that climate change effects in S1, S2 and S3 were 4.4t, 1.3t, 0.92t CO₂-eq respectively. The financial cost in S2 and S3 was 48% and 35% respectively of the cost in S1. S3 achieves an efficient closed-loop and had the best environment and economic benefits. Carbon reduction resulting from remanufacturing is expected to peak in 2020 and 2039, and if the recycling rate is increased from 25% to 60%, the maximum CO₂-eq reduction will increase by 351 million tons. Remanufacturing should play a vital role in urban carbon reduction strategies, and enterprises are capable of implementing remanufacturing through technical innovation. The quantitative environmental and economic analysis also enables remanufacturers and consumers in the market to make informed decisions.