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In order to shift to a circular plastics economy, high quality recyclates are required to effectively substitute virgin materials. Current approaches to empirically quantify the substitutability for recyclates are mainly limited by the abundance of virgin material grades along with a lack of adequate application-specific property profiles. In contrast, this work aims for a holistic analysis of the substitution potential of polyolefin recyclates intended for rigid packaging applications. This approach is fundamentally based on the classification of virgin polyolefins into different application-specific sub-groups with defined property windows derived from supplier data sheets, which allows for a generalization within one polymer type without neglecting the various available material grades. Moreover, the findings should provide valuable information for improvements of quality-defining process steps along the value chain of mechanical recycling. Therefore, it is of great importance to correlate the input stream composition of the investigated recyclates with the obtained qualities. The investigation of the substitution potential for selected recyclates clearly highlights the necessity of functional recycling for enhanced quality levels, which especially affects the sorting step in the recycling value chain. This work illustrates that a homogeneous waste stream directly correlates with a high substitution potential. Thus, the development of economically viable sorting strategies which take the functionality of plastic waste products into account must be targeted in future research. Furthermore, the development of detailed application-specific property windows in a joint effort with manufacturers should be pursued, as it allows for a meaningful empirical quantification of the substitutability for recyclates obtained from mechanical recycling.