The thesis examines the influence of circular economy principles on the standard energy retrofitting practices of a residential building. It highlights the need for deep renovation actions in our building stock to achieve energy and carbonisation reduction. However, this need is usually satisfied only by applying business-as-usual deep renovation practices, which often justify using virgin materials to achieve energy reductions and neglect embodied carbon emissions from applied materials. Therefore, it was necessary to show how the circular economy principles in building refurbishment practices can influence the reduction of carbon emissions and shift our focus from the present to future actions. A case study was chosen for demonstrating this potential through various qualitative methods, such as circular design approaches and reviewing material flows of applied materials while understanding their current and future life cycles. These methods led to tangible results, with reduced operational and embodied emissions. For example, operational carbon emissions were reduced by 38% when comparing the case study with the renovation of the existing building. The study also showed a common oversight - the influence of embodied carbon emissions from applied materials, which reduced overall carbon emissions in the case study to the existing building by 5%. Further, this study presents a clear argument for an immediate shift from solely using virgin materials in building refurbishment. The high embodied carbon emissions from the initial production and construction of virgin materials, often applied in deep renovation, can counter the lowering of operational carbon emissions from the use phase of the building. The construction industry needs to transition from a linear to a circular economy, embracing reused and recycled materials to mitigate these emissions.