Recycling may become an essential service like water and energy, with Victoria's environment minister ordering a review.

The troubled industry, which has had numerous fires and site shutdowns, will be examined by the Essential Services Commission.

Victoria will spend nearly $35 million over three years to fix its recycling and waste woes.

"We know that more needs to be done to lift the standards of our recycling system," Environment Minister Lily D'Ambrosio told reporters on Sunday.

The terms of reference will be finalised in coming weeks but Ms D'Ambrosio said she expected the commission to get on with the review as soon as possible.