Herein we have reported the effective use of palladium‐based systems which contain modified N‐Heterocyclic carbene (NHC) tagged with poly(N‐isopropylacrylamide) (PNIPAM) moiety as an organometallic catalyst. This report involves a comparative study between two catalysts, PNIPAM‐NHC‐Pd (II) complex (catalyst A) and PNIPAM‐NHC‐Pd (0) nanoparticles (catalyst B), to participate in the degradation of poly(ethylene terephthalate) (PET) into its monomer, bis(2‐hydroxyethyl terephthalate) (BHET) through glycolysis with ethylene glycol (EG). Glycolysis of the PET was carried out at different temperatures (170, 175, 180, 185, and 190°C) and times (6 and 24 h) where optimum results were obtained while glycolysis was performed at 180°C for 24 h using catalyst B. The investigation of the glycolysis product through NMR, ATR‐IR, TGA, and DSC proved the formation of BHET as the main product. To ensure the effective recycling of the PET and further value additions, the obtained glycolysis product, BHET was further transformed into its dibenzoylated derivative, bis(2‐([4‐Butoxy benzoyl]oxy)ethyl) terephthalate (BBET) by successive benzoylation using 4‐butoxybenzoyl chloride. The obtained BBET was used as an additive along with the commercial polyurethane‐based adhesive (CPU), and its effect on the properties of CPU was investigated using differential scanning calorimetry (DSC) studies.