The in-plant use of recycled aggregate concrete derived from precast rejects (termed PRAC herein) can promote a circular economy in the precast industry. However, the environmental implications associated with this practice remain poorly understood. A refined life cycle assessment (LCA) model was therefore developed to highlight the environmental benefits of using PRAC compared to natural aggregate concrete and conventional recycled aggregate concrete. Some key factors influencing PRAC's environmental performance were also examined. The results indicate that PRAC exhibits around 15% lower energy consumption and carbon dioxide emissions compared to other recycled materials. This reduction is attributed to the favourable quality of PRAC and the elimination of long-distance transport. However, emissions allocation and raw material prices play significant roles in determining the overall environmental impact of PRAC. The equivalent mortar volume mixing method is best suited for PRAC production, as it saves energy, reduces emissions, and maintains similar mechanical properties. Nevertheless, the high-temperature curing, which is often necessary in a precast factory setting, can be energy-intensive and thus diminishes the eco-friendliness of PRAC. Overall, the findings support the use of precast rework as recycled aggregate for cleaner production in the precast industry.