Integrated with carbon capture and utilization (CCU), the waste plastic upcycling is a promising solution for mitigating environmental issues associated with CO₂ emissions and plastic waste. However, there still exists a knowledge gap on how to assess reasonably the coupling environmental performance. In this paper, a 'waste plastics - upcycling plastics' system integrated with CCU is proposed through a three-step process: activated carbon is produced from waste PET plastics, CO₂ is captured using PET-AC as the adsorbent, and upcycling plastics are synthesized through CO₂ utilization. The life cycle assessment and carbon neutrality analysis are employed to evaluate the environmental performance of proposed system. Our findings show that the CO₂ utilization process contributes the most to the system's global warming potential (GWP), accounting for approximately 68% of the total impact. By selecting renewable energy sources in the CO₂ capture process and extending the capture time, the degree of carbon neutrality (DCN) could be increased from 0.985 to 1.235 and 0.991, respectively. The GWP and DCN are also influenced by the yield of activated carbon and the type of upcycling plastics.