The building and construction (B&C) sector significantly impacts the environment, particularly through carbon emissions that contribute to climate change. Despite the global recognition of life cycle assessment (LCA) as a powerful tool for evaluating environmental impacts, research on its adoption in New Zealand remains limited. This study aims to explore the current state of LCA use in New Zealand's B&C industry and identify the barriers hindering its implementation. As part of the study, an LCA case study was conducted on a structural insulated panel (SIP) modular house using the most commonly used LCA tool in New Zealand, LCAQuick V3.6. This tool, specific to New Zealand, was chosen because of its widespread use in the country's B&C industry. The case study demonstrated the effectiveness of LCA in calculating the global warming potential (GWP) of the modular house, helping to pinpoint the main contributors to the building system's environmental impact. The findings showed that the SIP modular house has a whole-of-life embodied carbon of 347.15 kg CO2 eq/m2, including Module D, with an upfront carbon footprint of 285.08 kg CO2 eq/m2. The production stage (Modules A1–A3) was identified as the most significant source of carbon emissions, primarily due to high energy consumption during raw material extraction, transportation, and manufacturing. Among the components, SIP panels were the largest contributors to the house's embodied carbon, with SIP roof panels accounting for 25% and SIP wall panels for 19%, together making up 44% of the total. Additionally, the study highlighted several barriers to LCA adoption in New Zealand, with the most significant being a lack of expertise in LCA within the country.