The money will cover councils' additional recycling costs until June 30, when they will be able to raise rates. Rates are expected to rise by about 4.5 per cent statewide because of the crisis. “[The rescue package] will help councils and industry deal with the issue, but it’s only a short-term solution. We need to get on our bike and sort this out going forward," said Municipal Association of Victoria chief executive Rob Spence. The government will also set up a recycling industry taskforce to find a long-term solution. Ms D'Ambrosio's office confirmed that until such a solution is found, recycling will be stockpiled or dumped in landfill.

“This is about protecting jobs and ensuring Victorians have confidence to continue recycling," the minister said in a statement. The industry believes a long-term solution will probably require major government investment. Credit:Graham Tidy Colin Tsang, Victorian project manager at Polytrade Recycling, said the government needed to step in. “If the government is willing to inject some funding into machinery and infrastructure, then we can produce a product [China] will take,” he said.

When Polytrade receives plastic from your yellow bin, it needs to remove any waste that has made its way in there: shopping bags, food scraps, unrecyclable plastic. This is known as “contamination”. Australia’s contamination rate averages about 6 to 10 per cent. China announced in January it would only accept imports with a contamination rate of less than 0.5 per cent – an effective ban. “What people put in their recycling bins has been an issue for many years,'' said Dr Trevor Thornton, a recycling-industry expert at Deakin University. ''Plastic bags filled with recycling, for example, end up going to landfill – and that’s a cost to recyclers. The recyclers don’t have time to open the plastic bags.” Polytrade wants to circumvent the ban by building sorters that would remove contamination, but the infrastructure would probably be hugely expensive.

“It would require considerable investment by both businesses and government,'' said Tim Piper, who heads the Waste Industry Alliance, a national group that represents landfill operators. ''And that’s inevitably a solution for the long-term – what are we going to do about this stuff short-term? “Government is going to have to consider what it will do with the recycled goods it has now. There is no opportunity to decontaminate them – and there could well be thousands of tonnes to deal with." Options to solve the crisis In the long-term, recyclers could seek funding from the government to invest in reducing contamination, as Polytrade is calling for.

The industry could find another country to export recycling to. Mr Piper said negotiations with other countries were under way. Alternatively, the government could subsidise a local manufacturing industry to turn waste products into plastic, glass and cardboard. “If you don’t invest in your own recycling industry, you’re always beholden to another country – and those countries may not always want to take our rubbish,” Mr Piper said. The last option: sending Victoria’s plastic, paper and glass waste to landfill.