AbstractMost automotive plastic waste (APW) is landfilled or used in energy recovery as it is unsuitable for high‐quality product mechanical recycling. Chemical recycling via pyrolysis offers a pathway toward closing the material loop by handling this heterogeneous waste and providing feedstock for producing virgin plastics. This study compares chemical recycling and energy recovery scenarios for APW regarding climate change impact and cumulative energy demand (CED), assessing potential environmental advantages. In addition, an economic assessment is conducted. In contrast to other studies, the assessments are based on pyrolysis experiments conducted with an actual waste fraction. Mass balances and product composition are reported. The experimental data is combined with literature data for up‐ and downstream processes for the assessment. Chemical recycling shows a lower net climate change impact (0.57 to 0.64 kg CO2e/kg waste input) and CED (3.38 to 4.41 MJ/kg waste input) than energy recovery (climate change impact: 1.17 to 1.25 kg CO2e/kg waste input; CED: 6.94 to 7.97 MJ/kg waste input), while energy recovery performs better economically (net processing cost of −0.05 to −0.02€/kg waste input) compared to chemical recycling (0.05 to 0.08€/kg waste input). However, chemical recycling keeps carbon in the material cycle contributing to a circular economy and reducing the dependence on fossil feedstocks. Therefore, an increasing circularity of APW through chemical recycling shows a conflict between economic and environmental objectives.