A promising strategy for PET waste management involves alcoholysis to produce monomers such as dimethyl terephthalate (DMT) and bis-2-hydroxyethyl terephthalate (BHET). This study introduces an efficient PET-alcoholysis approach using an oxygen-vacancy (V_O)-rich catalyst under air, achieving high space time yields (STY) of 505.2 g DMT/g cat/h and 957.1 g BHET/g cat/h, which are 51-fold and 28-fold improvements over reactions under nitrogen. In situ spectroscopy and density functional theory calculations reveal that the reaction pathways involve O₂-assisted activation of CH₃OH to form CH₃OH• and OOH• species at V_O-Zn²⁺-O-Fe³⁺ sites, highlighting the critical role of these sites in ester bond activation and C-O bond cleavage. A life cycle assessment demonstrates the viability of this approach in closed-loop recycling, achieving 56.0% energy savings and 44.5% reduction in greenhouse-gas emissions. Utilizing PET textile scrap further reduces initial total operating costs by 58.4%. The study also shows that the catalyst is effective in depolymerizing various real polyester wastes, including PET, PET/PC, PET/PE, PET/PP, and mixed textiles. The catalyst exhibits structural stability and maintains high activity after multiple cycles. The V_O-rich Fe/ZnO nanosheets are synthesized via an organic base-assisted thermal decomposition strategy, resulting in a 2D nanosheet structure with an average thickness of 2.0 nm. The catalyst's performance is evaluated through various experiments, including glycolysis and methanolysis, showing high yields of BHET and DMT. The study also investigates the reaction mechanisms and catalytic processes, revealing that the V_O-Zn²⁺-O-Fe³⁺ sites play a crucial role in activating and breaking O-O/O-H bonds, leading to the formation of OOH/CH₃OH species. Subsequent nucleophilic attacks and C=O activation of PET result in the gradual cleavage of the C-O bond, ultimately producing DMT. The life cycle assessment indicates that this approach has the potential to reduce the carbon footprint and enhance the energy efficiency of PET waste recycling. The study concludes that the V_O-rich Fe/ZnO nanosheets offer a sustainable solution for PET waste recycling, demonstrating high catalytic activity and efficiency in depolymerizing various types of polyester.A promising strategy for PET waste management involves alcoholysis to produce monomers such as dimethyl terephthalate (DMT) and bis-2-hydroxyethyl terephthalate (BHET). This study introduces an efficient PET-alcoholysis approach using an oxygen-vacancy (V_O)-rich catalyst under air, achieving high space time yields (STY) of 505.2 g DMT/g cat/h and 957.1 g BHET/g cat/h, which are 51-fold and 28-fold improvements over reactions under nitrogen. In situ spectroscopy and density functional theory calculations reveal that the reaction pathways involve O₂-assisted activation of CH₃OH to form CH₃OH• and OOH• species at V_O-Zn²⁺-O-Fe³⁺ sites, highlighting the critical role of these sites in ester bond activation and C-O bond cleavage. A life cycle assessment demonstrates the viability of this approach in closed-loop recycling, achieving 56.0% energy savings and 44.5% reduction in greenhouse-gas emissions. Utilizing PET textile scrap further reduces initial total operating costs by 58.4%. The study also shows that the catalyst is effective in depolymerizing various real polyester wastes, including PET, PET/PC, PET/PE, PET/PP, and mixed textiles. The catalyst exhibits structural stability and maintains high activity after multiple cycles. The V_O-rich Fe/ZnO nanosheets are synthesized via an organic base-assisted thermal decomposition strategy, resulting in a 2D nanosheet structure with an average thickness of 2.0 nm. The catalyst's performance is evaluated through various experiments, including glycolysis and methanolysis, showing high yields of BHET and DMT. The study also investigates the reaction mechanisms and catalytic processes, revealing that the V_O-Zn²⁺-O-Fe³⁺ sites play a crucial role in activating and breaking O-O/O-H bonds, leading to the formation of OOH/CH₃OH species. Subsequent nucleophilic attacks and C=O activation of PET result in the gradual cleavage of the C-O bond, ultimately producing DMT. The life cycle assessment indicates that this approach has the potential to reduce the carbon footprint and enhance the energy efficiency of PET waste recycling. The study concludes that the V_O-rich Fe/ZnO nanosheets offer a sustainable solution for PET waste recycling, demonstrating high catalytic activity and efficiency in depolymerizing various types of polyester.