Tremendous growth in the consumption of liquefied petroleum gas (LPG) has resulted in the growing demand to have an effective and sustainable management of refillable LPG cylinders. This research project formulates a complete closed-loop supply chain (CLSC) optimization model to help in the distribution of sustainable cylinder circulation among suppliers, plants, distributors, retailers, customers, and disposal facilities. The model incorporates forward distribution flows with reverse logistics, inspection, repair, filling, and disposal processes considering carbon tax based environmental costing. A deterministic formulation of a linear programming is proposed. The findings suggest that the model provides a sound analytic basis that can be used to make decisions regarding minimizing the cost, minimizing carbon, reverse-flow efficiency, and sustainable resource recovery. The model is the decision-support structure of future empirical research and application to industry.