I work for a plastic film/bag mfg and polyethylene is used almost exclusively. Every bit of scrap and any grocery bags we bring in are ground up, melted down and molded into the proper size resin pellets to feed into the extruders for making new film.
All they can make from that scrap is film/bags that vary in color. They mostly make thick 55 gallon trash bags that will fit in a 55 gallon drum and wrap over the top edge. There’s one customer that will buy off colored film as long as it’s not red.
To say the process has a small carbon footprint would be a lie. It takes a set of very large machines that use a ton of electricity to recycle that plastic. The ONLY reason it’s viable is because there’s no transportation involved.
I worked for a plastics factory one summer back in the early 80s. They made things like milk crates, chicken coops, and lots of small parts. Every once in a while, a train would come in with boxcars full of old milk crates and chicken coops. We took them out and fed them into a grinder, and nobody cared what color, on average, was produced. It was explained to me that the stuff was melted down once it was chipped into very small shards, and reused to make more crates. I suppose that if they wanted the end product to be closer to a certain color, they added dye to it.
By the way, there is nothing stinkier than a train full of used chicken coops in 100+ degree temperatures, along with their waste products and the occasional chicken leg. Suffice it to say that I am glad that that was only a summer job.