Four Melbourne councils have now confirmed they are sending their recyclable waste to landfill after the Environment Protection Authority (EPA) banned one of the state's largest recycling companies from accepting waste at two of its facilities.

Key points: The EPA has banned SKM Recycling from accepting waste at two of its sites due to fire risks

The EPA has banned SKM Recycling from accepting waste at two of its sites due to fire risks The City of Port Phillip will send 43 tonnes of recyclable waste to landfill

The City of Port Phillip will send 43 tonnes of recyclable waste to landfill The Port Phillip Mayor says councils will have less money to spend on other services if they are not reimbursed for the landfill costs

The EPA on Friday banned SKM Recycling — which receives about half of Victoria's kerbside recycling across three sites — from accepting material at its Coolaroo and Laverton North sites.

The Coolaroo plant in Melbourne's north was the site of a major blaze in 2017 which burned for 11 days, leading to the evacuation of more than 100 homes.

In a written statement, the EPA said inspections of the company's stockpiles, which found safety regulation breaches, led to the decision to shut down the facilities until they were compliant with regulations.

Cathy Wilkinson, chief executive of the EPA, said the large plastic stockpiles at the facilities posed a real fire risk to local communities.

"Fire water run-off could also enter waterways and have long-lasting impacts on the environment due to the toxic contaminants," Dr Wilkinson said.

The 2017 fire led to the evacuation of more than 100 homes. ( Twitter: Paul Stacchino )

The EPA said it was conducting daily inspections at both SKM Recycling sites and confirmed the ban would be lifted once it was satisfied the company was complying with safety regulations.

The City of Port Phillip confirmed it had made the decision to send 43 tonnes of recyclable waste to landfill after SKM Recycling advised it would be unable to accept any material until Wednesday.

"Unfortunately, due to a range of factors including logistics, the risk of odour and litter from full recycling bins spilling out on streets, and later being swept into the bay, we have decided to use landfill for recyclable collections before reverting as soon as possible to the normal weekly recycling collection service," the council said in a statement.

Brimbank City Council also confirmed it would be sending recyclable waste to landfill this week as a result of the shutdown.

In a statement, Brimbank City Council director of infrastructure and city services Neil Whiteside said the council expected recycling processing to resume later in the week.

"This is disappointing to both council and the community. No-one wants recyclable material to go to landfill, but our priority must be to protect the health and safety of the community," Mr Whiteside said.

"There is currently no other viable recycling processing option available during this short-term disruption."

Cardinia Shire and the City of Boroondara have also confirmed they will temporarily divert their recyclable materials to landfill.

Hobsons Bay City Council in Melbourne's west said it would delay some of its curbside recycling collection by two days, with all recycling to be collected by Saturday.

The City of Melbourne, the City of Darebin, and Moonee Valley City Council are among other councils affected by the shutdown, but it is unclear whether they will divert recyclable material to landfill.

Council could be left out of pocket

Port Phillip Mayor Dick Gross said it was a difficult decision, but one the council could not avoid.

"We are incredibly disappointed that this is occurring because part of the issue with recyclables is that the community trusts the system," Cr Gross said.

"All of the options are unpalatable. This is a loss for Victorian councils and our communities."

Cr Gross said the council would seek reimbursement from SKM Recycling for the costs of sending the waste to landfill, warning there would be consequences if councils were left to foot the bill.

"Rates will not go up as a result of this issue because rates are capped, however there will be more money spent on recycling," he said.

"That means there'll be less money for other infrastructure like roads, human services like aged care and children's services."

A number of councils across Victoria are affected by the ban. ( ABC Gippsland: Nicole Asher, file photo )

Mary Lalios, president of the Municipal Association of Victoria (MAV), said councils were only told about the ban just hours before the shutdown, leaving them scrambling to find a solution.

"It came as a shock," she said.

"You can't put something in place and not have the alternatives for councils and the recyclables … if we don't know where they're going, where are they going to go?"

Ms Lalios said the State Government had done little to respond to China's decision in January 2018 to stop accepting foreign waste — known as the China sword policy — which disrupted the export of more than 600,000 tonnes of Australian waste per year.

"Last year when China said, 'We don't want your rubbish anymore Australia', what have we done in this last year? We really need an investment and we really need leadership in this space," she said.

"The State Government has collected half a billion dollars in the sustainability fund through a landfill levy — that's community money and that's not being invested."

Those concerns were echoed by Victorian Opposition Leader Michael O'Brien.

"The Government established a taskforce — what's the taskforce done?" he asked.

"This is a Labor Government that loves to boast about its environmental credentials, but when it comes to supporting those Victorians who do our bit for the environment every day … the Government is letting them down."

Waste collection is local government's job: Minister

But the Victorian Environment Minister Lily D'Ambrosio said the Government had invested heavily in the industry since the China policy change, including a $37 million package for the industry to develop new markets.

"We provided local government with about $13 million of relief money in the short term so that kerbside recycling collection could continue," she said.

China's decision to stop accepting foreign waste has disrupted the Australian recycling industry. ( Reuters )

Ms D'Ambrosio said the State Government was providing assistance to councils to respond to the EPA ban, but said waste collection was ultimately the responsibility of local government.

"Councils need to have continency planning in place," she said.

"It shouldn't come as a surprise that it will be a while before we can actually have an industry that is resilient and that has been able to recover from the China sword policy."

Cr Gross called on the State Government to do more to invest in new technologies.

"One small council cannot affect the way the waste industry — which is huge, national and transnational — operates," Cr Gross said.

"We need new technology, new support, new plants — which are already available in America and Europe, but in Victoria we are well behind and we can't keep putting stuff in landfill."

SKM Recycling has been contacted for comment.