Downcycling is the process of converting waste materials or useless products into new materials or products of lesser quality and reduced functionality. The goal of downcycling is to prevent wasting potentially useful materials, reduce consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution, and lower greenhouse gas emissions (though re-use of tainted toxic chemicals for other purposes can have the opposite effect) as compared to virgin production. A clear example is plastic recycling, which turns the material into lower grade plastics.
The term downcycling was used by Reiner Pilz of Pilz GmbH in an interview by Thornton Kay of Salvo in 1994.
Characteristics of downcycling are lower reusability (in comparison with "classic" recycling), lower amount of iterations inside the cycle with each iteration of downcycling, quality of downcycled things deteriorates and after the last iteration the product has been downcycled to the par of general waste.