Abstract: Shifting from a linear to a circular economy has consequences on how the sustainability of products is assessed. This is the case for products recovered from resources such as sewage sludge. The “zero-burden” assumption is commonly used in Life Cycle Assessment and considers that waste streams are burden-free, which becomes debatable when comparing waste-based with virgin material-based products in the context of the growing circular economy. If waste streams are considered as resources rather than waste, upstream burdens should be partly allocated to all products to allow a fair comparison with their virgin material-based equivalents. In this paper, five allocation approaches are applied to allocate the resource use of upstream processes (consumer goods production) to products recovered from the processing of sewage sludge in the Netherlands, which produces biogas, (phosphorus-based) chemicals and building materials. Except for the approach which allocates 100% of the impact from resource recovery processes to the preceding consumer goods, the allocation approaches show a resource use 27 to 80% higher than with the “zero-burden” assumption. In this particular case, using these allocation approaches is likely to find little support from recyclers. The producers of household products, recyclers and policy makers should find a consensus to consider the shift from a linear to a circular economy in sustainability assessment studies while avoiding discouraging the implementation of recovery technologies. This paper suggests starting the discussion with the approach which allocates the impacts from upstream processes degressively to the downstream products as it best translates the industrial ecology principles.