Here in Oz we have done away with the plastic bag, but still have the plastic bottle.
Some states have a deposit on them.
Fine in theory but if you collect and do nothing with them, as is the case in some states, they just pile up or are sent to land fill.

The Chinese have developed a system to turn them back to Diesel, but that will never happen here in Oz as the 'Greens', on whom Labor rely for preferences will never agree to it.

As to replacing plastic bags with paper, we had them here years ago, they cost money and the removal of the plastic bag was more to do with that than anything else.

Our major supermarkets by removing the plastic bag will be on average between them some $3 billion a year better off.