Recycling generates co2, but so does producing virgin plastic. If you're not cutting plastic use completely, you're going to produce co2 either way. Assuming that recycling doesn't produce more co2, we're coming out ahead. I realize calling it "carbon neutral" is probably not the best word to describe it (flying a plane isn't carbon neutral just because it produces the same amount as driving).

Recycling plastic produces more CO2 than producing virgin plastic, I don’t understand assuming otherwise.