Fast-moving consumer goods (FMCG) often use multilayer packaging (MLP), which consists of composites made up of separate layers of material. Even though a million tonnes of MLP are created annually, most package trash needs to be separated and recycled using the existing infrastructure, which is predominantly dependent on mechanical recycling. However, confronting circular economy principles, this review will foresee the challenges, opportunities, and future scenarios of multilayer packaging recycling. Challenges were identified: material complexity and compatibility, sorting separation technologies, contamination and residue management, lack of standardization and technology, loss of material properties, and cost considerations. Opportunities were identified: design for recyclability, enhanced sorting and separation techniques, and advanced recycling technologies. The future scenario of recycling technologies for MLP in upcoming years was identified, which includes (i) reprocessing to hydrocarbon, (ii) high-performance recycling, (iii) downcycling, and (iv) business as usual. The short-term opportunities for MLP's efficient recycling represent the recognized gap between recycling technologies and targets.