Mycelium-bound composites are eco-friendly, sustainable materials obtained after growing fungi onto solid organic substrates. In this research, we studied how mycelium-bound composites can be used in a close-loop cycle. Indeed, the composites are biodegradable, which poses the question of how to obtain sufficient durability for their use in practical applications, without impairing on their biodegradability potential. To study this issue, we grow mycelium from P. ostreatus (oyster mushroom) onto ligno-cellulosic substrates obtained from the agricultural industry and applied various surface coatings. We measured the mechanical properties evolution over a month after being buried in soil and exposed to the Singaporean tropical climate (25-32 °C, 80% humidity). It was found that a beewax coating helped to retain an elastic modulus of elasticity above 0.10 MPa without affecting the biodegradability properties. We also demonstrated how after degradation; the remains can be used to regrow a new, fresh composite using fresh mycelium spawn. Finally, we also studied how plastics can be incorporated into the substrate composition to not only increase the properties of the composites during application, but also to degrade some of the chemical through fungal bioremediation. Employing natural organisms to produce biocompatible materials in a closed loop circle can provide an exciting opportunity to reduce the environmental pollution and challenges with waste disposal while addressing the market demand for a large variety of applications in various industrial sectors.