This paper addresses the plastic waste management challenge by proposing a sustainable solution for the building sector. The proposed solution uses Loose-Fill Plastic Waste (LFPW) as a thermal insulation material, the world’s first in plastic waste recovery. To investigate the potential of this new path, an experimental study was conducted on test cells in Reunion Island’s cold and wet climate. It was revealed that LFPW (size between 3 and 4 mm with 8 cm thickness) can reduce surface temperatures by nearly 3.2 °C, with a maximum difference by almost 22.2 °C. The thermal phase shift is significant (190 mn) and comparable to conventional thermal insulation solutions. The study results suggest that LFPW can provide an effective and economical solution to the challenge of plastic waste management while promoting sustainable development.