Impact of Packaging and Recycling Systems on Material Recirculation: A Stage‐Decomposition Model

ABSTRACT The transition to a circular economy has placed growing pressure on packaging systems to enable effective material recovery across increasingly complex waste and recycling infrastructures. Focus on aggregate recycling rates obscure the stage‐specific inefficiencies that determine whether packaging material re‐enters production, making it difficult to target packaging design efforts, infrastructure investments and policy attention effectively. Grounded in material flow analysis principles, this study presents a diagnostic decomposition model that partitions the effective recycling rate into four stages: consumer participation, collection efficiency, sorting yield and recycling process yield. The model's multiplicative structure makes explicit that a deficiency at any single stage imposes a ceiling on overall system performance, regardless of excellence elsewhere. By coupling this decomposition with the cumulative equivalent use retention function, the analysis reveals non‐linearities in long‐term material retention: Because retention follows a convex function of the effective recycling rate, improvements at higher baseline performance yield disproportionately larger gains than equivalent improvements at lower baselines. Analysis shows that, beyond moderate baseline performance, interventions targeted at the limiting stage consistently outperform evenly distributed improvements across all stages. Illustrative applications demonstrate the model's diagnostic utility, showing that identical packaging designs can exhibit markedly different recycling performance depending on system context and that design choices can restructure which stage limits performance within a given infrastructure. From a system perspective, the model shows how effective recycling performance results from the interaction between packaging design and waste and recycling systems and that packaging circularity is a system‐level outcome rather than a fixed material attribute.