A circular economy is the stated aim of current technological and political developments in the waste management sector. Achieving the goal of a circular economy requires significant improvements in waste treatment technologies. For this reason, this paper summarises the relevant technologies, detailing the developments in the significant sensor-based sorting technologies. This review analyses the key spectral analysis methods like Near-Infrared Spectroscopy, Visual Spectroscopy, X-ray transmission, X-ray fluorescence analysis and Laser-Induced Breakdown Spectroscopy. This study further contains a detailed analysis of the standard sensor-based sorting construction types chute sorter, belt sorter and robot-aided sorting. Further insights in the branch of sensor-based sorting are permitted by describing the key players and stakeholders in sensor-based sorting, detailing the area of expertise and current fields of study for primary sensor and sorting machine suppliers. A convenient lookup table detailing the capabilities of these significant suppliers is provided. The last chapter summarises relevant trends and developments in digitalisation and Industry 4.0 in the waste and recycling sector, elaborating on relevant technology like digital waste management, sorting robots in waste management, smart villages and recyclable materials scanners. The reviewed data portrays the waste management industry’s substantial developments. While new technologies, like machine learning, convolutional neural networks and robot sorting, are increasingly implemented, a substantial discrepancy exists between technological capabilities and the current State-of-the-Art.