Technological innovation plays a key role in the transition to a more sustainable and circular manufacturing industry. However, companies currently struggle to integrate circular economy principles in their strategic technology management and design practices. Assessing the potential of new technologies to contribute to the circular economy transition is challenging, due to the complex nature of circular systems and the uncertainty at the front end of innovation. In addition, there is a severe lack of technology assessment tools that encompass circularity concepts. Through action research in collaboration with a large manufacturing company, a technology assessment tool was developed, focused on environmental sustainability and circular economy. The tool leverages the simplicity of 2 × 2 project portfolio matrices in a workshop setting, while providing a structured application of future scenarios for a forward-looking technology assessment. The tool was piloted in R&D projects in two manufacturing companies and a research institution. Feedback indicates the proposed tool can aid decision-making by evaluating trade-offs between environmental impacts and strategies for circular value retention.