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Global commodity prices for materials including paper and crude oil have slumped, lowering the value of recyclate, presenting new challenges for the Australian waste and recycling industry. This study assesses the environmental performance of managing (mixed paper and mixed plastic) recyclate in landfill, incineration and gasification-pyrolysis using life cycle assessment (LCA) for impacts including acidification, climate change, photochemical oxidation, and eutrophication potentials. The study finds environmental outcomes can be optimized by separately treating recyclate. Mixed paper treated in incineration or gasification-pyrolysis produces less greenhouse gas emissions than in landfill, whereas mixed plastic is best managed in landfill. The directional outcomes for other pollutants assessed were sensitive to the inclusion of credits from electricity production. The study is significant because waste management in Australia is now considering thermal treatment options, due to diminishing landfill capacities and perceived environmental benefits. Policy changes to waste management systems will benefit from having the ability to predict environmental outcomes based on particular waste types and materials.