Buildings and the construction industry at large are significant contributors to the catastrophic climate breakdown. The built environment is responsible for 37% of the total global carbon emission, of which about a third arises from the energy used to produce building and construction materials, usually referred to as embodied carbon. One of the key strategies to reduce the environmental impact of buildings is to significantly improve their energy efficiency, which is referred to as deep renovation. Prefabricated building envelope elements intended to prevent heat loss through the building envelope are considered a key deep-renovation technology. Connecting prefabricated elements to a building reflects a potential stream of waste if applied linearly with severe negative environmental impact in terms of natural resource depletion and exposure to pollutants. This article reports on a quantitative Design for Disassembly (Dfd) indicator to assess future recovery potential and, subsequently, its impact on embodied carbon emission of the circular redesign of three different prefabricated building envelope elements. Although none of the redesigned elements are yet considered 100% circular, the development of these three prefabricated building envelope elements showcases that the environmental impact can be substantially reduced following a well-structured and dedicated innovation process. The reduction of the environmental impact is indicated by lower quantities of embodied carbon up to 50% and an improved design for disassembly, reflecting a higher reuse potential of building materials and components. Several limitations and directions for further research were identified to advance the development of circular, prefabricated deep-renovation building envelope elements.