In the last decades, the amount of municipal sewage sludge generation rate has drastically increased due to population growth, spatial sewerage system development, and implementation of new treatment techniques. Nowadays, it is considered a globally prominent issue. Municipal sewage sludge contains pathogenic bacteria and viruses along with heavy metals, poorly biodegradable organic compounds, pharmaceuticals, and microplastics, which make its utilization management quite difficult. Landfill placement of sewage sludge is the most widely used technique worldwide, but is obsolete and inefficient, and accompanied by significant risk of environmental pollution with high logistics expenditure. Moreover, landfill placement means that all residual energy and potential material reuse applications are lost. The introduction of modern treatment techniques can solve the problem with sewage sludge generation, but it results in strong energy consumption increase of energy consumption. Modernization and operational policies based on circular economy principles are focused on relevant sewage sludge utilization issues with the potential use of waste-to-energy and recycling applications. The paper presents a methodological approach of cradle-to-grave assessment of sewage sludge treatment process based on energy and material flow analysis. The proposed methodology is studied within the real operational activities of big-scale wastewater treatment plants of two of the largest cities of Russia-Ekaterinburg and Perm. This investigation provides an efficient managerial tool for sustainable development that can be used by wide range of stakeholders.