Plastics are a ubiquitous material with good mechanical, chemical and thermal properties, and are used in all industrial sectors. Large quantities, widespread use, and insufficient management of plastic wastes lead to low recycling rates. The key challenge in recycling plastic waste is achieving a higher degree of homogeneity between the different polymer material streams. Modern waste sorting plants use automated sensor-based sorting systems capable to sort out commodity plastics, while many engineering plastics, such as polyoxymethylene (POM), will end up in mixed waste streams and are therefore not recycled. A novel approach to increasing recycling rates is tracer-based sorting (TBS), which uses a traceable plastic additive or marker that enables or enhances polymer type identification based on the tracer’s unique fingerprint (e.g., fluorescence). With future TBS applications in mind, we have summarized the literature and assessed TBS techniques and spectroscopic detection methods. Furthermore, a comprehensive list of potential tracer substances suitable for thermoplastics was derived from the literature. We also derived a set of criteria to select the most promising tracer candidates (3 out of 80) based on their material properties, toxicity profiles, and detectability that could be applied to enable the circularity of, for example, POM or other thermoplastics.