Hundreds of thousands of tonnes of glass are being stockpiled and landfilled instead of being recycled, threatening to seriously damage the community's faith in the billion-dollar recycling industry.

Key points: Australia consumes about 1.36 million tonnes of glass packaging per year

Australia consumes about 1.36 million tonnes of glass packaging per year EPA regulations prohibit stockpiling large amounts of glass, but recycling plants say there is nowhere else for it to go

EPA regulations prohibit stockpiling large amounts of glass, but recycling plants say there is nowhere else for it to go Hundreds of thousands of tonnes of glass is accumulating in recycling companies around Australia

Key industry insiders interviewed by Four Corners have described an "unsustainable situation" with glass which has "nowhere to go" because there is "no viable market".

Australia consumes about 1.36 million tonnes of glass packaging per year: wine and beer bottles, glass jars and containers.

Glass consumption is at its highest in New South Wales, which produces about 460,000 tonnes of used glass per year.

One recycling company, Polytrade, has decided to go public in an effort to raise awareness about the issues being faced by industry due to what it describes as a failure of regulation.

Polytrade Rydalmere manager Nathan Ung says there is nowhere for the glass they receive to go. ( Four Corners )

"We are back in the dark age and we don't know what to do. We are receiving more and more glass with nowhere to go," Polytrade Rydalmere manager Nathan Ung told Four Corners.

"The predicament at the moment is there's no viable market anymore, there's nowhere for the glass to go."

It is currently cheaper to import glass bottles than recycle them.

'We don't know what to do with it'

Polytrade says the regulator, NSW Environmental Protection Authority (EPA), is aware of the problem.

Recycling companies in NSW are prohibited from stockpiling large amounts of material due to limits placed by the EPA.

Exacerbating the situation, recycling companies are locked into long-term contracts with local councils, some as long as 10 years. The recycling industry is also experiencing a commodity price slump.

Now, hundreds of thousands of tonnes of close to worthless used glass have been accumulating.

"We're dumbfounded because we're receiving glass every day, we don't know what to do with it," Mr Ung said.

"We're forced to stockpile it, and yet there's an EPA regulation that there's a stockpile ruling that we can't stockpile to a certain amount."

In an unprecedented move, Polytrade agreed to open up its warehouses to show Four Corners just how bad the situation is.

Four Corners has recorded images of glass stored in giant bags in massive warehouses.

Inside Polytrade's warehouses, there are rows upon rows of giant bags storing unused glass. ( Four Corners )

Polytrade keeps its glass bagged and undercover, to prevent leaching into the ground, but Four Corners has discovered another company, an industry giant, has a massive stockpile of glass kept outdoors — a mountain of material sprouting weeds.

The situation with glass recycling has reached "crisis" point in New South Wales, with one waste industry consultant describing it as "a perfect storm" of negative conditions.

An industry giant has a huge stockpile of glass outdoors. ( Four Corners )

Confidential report reveals 'unprecedented' crisis

Four Corners has obtained a damning confidential report, commissioned by industry and provided to the NSW EPA in 2017.

It reveals substantial stockpiling of used glass.

The report reveals:

With increasing freight costs, the economic viability of sorting and transporting glass is marginal in many rural areas.

With increasing freight costs, the economic viability of sorting and transporting glass is marginal in many rural areas. While politically unacceptable, the increasingly attractive option for regional/rural areas is to landfill glass locally.

While politically unacceptable, the increasingly attractive option for regional/rural areas is to landfill glass locally. Multiple Australian states are experiencing the glass market downturn.

The report stresses the "need for a coordinated response to this unprecedented situation" from governments and regulators to stop the situation from worsening.

It also warns of the "possibility of negative publicity, which can seriously damage the community's confidence in recycling" if the truth becomes known.

The NSW EPA was provided with a damning report into glass recycling this year. ( Four Corners )

Recycling industry is in survival mode

Australian Council of Recycling (ACOR) president Grant Musgrove broke industry ranks to talk about recycling in Australia.

He likened the situation to the decline of the mining industry.

"We have government inaction plus a perfect storm with low commodity prices," he said.

"You've got governments taking landfill levy and not allocating it for their intended purpose.

"Regulations that aren't strong enough to give support to legitimate operators, good operators.

"We don't have the support for those."

Grant Musgrove says the industry is in "a perfect storm". ( Four Corners )

Mr Musgrove said there needed to be a more coordinated effort by state and federal governments.

"Some governments are very responsive and are doing everything they can, and some governments are caught napping or simply hope it would all go away," he said.

In Victoria, Mr Musgrove said "hundreds of millions of dollars being raised as revenue from the landfill levy" was not being spent.

"Recycling is effectively being taxed to prop up a state government budget," he said.

Mr Musgrove hit out at regulators and governments, calling for action to be taken before the crisis becomes a disaster.

"There's no incentive to invest and there's no co-investment by government, or very, very limited co-investment by government," he said.

"It costs jobs, it costs companies.

"We need ministers to bang their heads … together and come up with a national strategy, a national coordinated response."

Watch the Four Corners episode Trashed: The Dirty Truth About Your Rubbish.