Almost two years since China announced it would effectively stop being a dumping ground for the world's waste, Victoria's recycling system has been plunged further into chaos after the state's largest kerbside recycling company was declared insolvent in the Supreme Court.

Key points: Victorian residents are recycling bottles and cans at NSW Return and Earn centres

Victorian residents are recycling bottles and cans at NSW Return and Earn centres Local NSW businesses say the practice is cutting into their profits

Local NSW businesses say the practice is cutting into their profits Victoria is the only state or territory without a deposit scheme or considering implementing one

That could mean more than a dozen councils may have to send their recyclables to landfill.

But in the state's north, some residents are taking matters into their own hands, driving their bottles and cans across the border into New South Wales to take advantage of that state's container deposit scheme, Return and Earn.

One person taking advantage of the scheme is Wodonga grandmother Janice Marcuzzi.

"It's popped up. It's there. So we use it," she told 7.30.

Recyclers 'doing a Kramer'

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Victorians do not pay a surcharge when they buy their drinks, so technically they are not allowed to claim the refund.

When alerted to this, Ms Marcuzzi was surprised.

"I had no idea because I have never looked into it," she said.

"I didn't see any information written on it, I haven't been told by anyone so it's news to me," she said.

Janice Marcuzzi is one of many residents on the Victorian border using the New South Wales scheme. ( ABC News )

The grandmother of 10 takes her grandchildren on bike rides and picks up rubbish to teach them about recycling.

The practice is reminiscent of a Seinfeld plot in which Kramer and Newman collect thousands of drink containers and drive from New York to Michigan to reap the financial rewards of a paid container deposit scheme.

While their plan failed spectacularly, it is working for Ms Marcuzzi and many others in the border town who cash in their containers across the river.

She said she was not too worried about getting caught.

"I don't know what they can do to us, I really don't know," she said.

"I mean, if they slapped us with a fine I'd have to go and collect some more cans to pay for the fine I suppose."

'They're ripping off the NSW rate payer!'

Albury supermarket owner Bob Mathews says the scheme has cost his business. ( ABC News )

Across the border in Albury, some retailers are furious about the practice.

Bob Mathews owns a string of supermarkets in New South Wales and says the lack of a Victorian scheme has hurt his business because he has had to absorb the extra up-front costs of the scheme or risk losing business.

"It's between 10 and up to 15 cents per can and if you've got a 30 pack of beer, that's $4," he told 7.30.

"So in Victoria, it's $4 cheaper for a 30 pack of beer than we are here, so we've had to just take that off our profit.

"In actual fact, beer has become a non-profitable product for us."

Mr Mathews said despite a temporary assistance package from the NSW Government, the scheme continued to cost him money.

"The only thing that's going to solve our financial difficulties is going to be a Victorian scheme," he said.

"Once it comes on board, from a Victorian perspective, every Victorian is going to pay $4 more for carton of beer, but the logic of the people that put the system in is that it won't really cost them because they'll go down to the local depot and put their cans in."

He is angry about the number of Victorians he sees using the two reverse vending machines near his supermarkets.

"The Victorians don't pay the 10 cents, but the NSW people do, and so they're ripping off the NSW rate payer," he said.

Victoria urged to consider scheme

Only containers purchased or collected in NSW are supposed to be retuned under the state's scheme. ( ABC News )

In 1977, South Australia set up the first container deposit scheme in Australia, followed by the Northern Territory in 2012, NSW in 2017 and the ACT and Queensland in 2018.

Both Western Australia and Tasmania have also now committed to schemes, leaving Victoria the only state without plans to introduce one.

Federal Environment Minister Sussan Ley said she wouldn't rule out a national container deposit scheme but will be urging Victoria to introduce its own scheme at a meeting with state environment ministers later in the year.

"I think it's a great idea," she told 7.30.

"I live on the border between NSW and Victoria and I know that there are truckloads of cans and bottles that go to NSW and South Australia from Victoria."

She criticised the Victorian Government for failing to implement a scheme of its own, despite the recent winding up of recycling giant SKM.

"My question to Victoria will be, 'Why aren't you on board? What will it take to get you on board?'" she said.

"Look at the way that SKM and metropolitan waste is being dealt with at the moment by the Victorian Government — I think there's room to improve."

"This is not a finger pointing exercise, this is a exercise in I call it co-operative federalism. We need the states and we know that their citizens will be pushing them to cooperate where they can."

A senate committee last year recommended a national container deposit scheme, saying it would improve the quality of recycling and lower the cost.

Victoria is now the only state without plans for a container deposit scheme. ( ABC News )

Deakin University waste expert Trevor Thornton said a national scheme could go a long way to solving the recycling crisis.

"At the moment, there's a lot of issues about contamination in recycling, and particularly with the overseas market," Dr Thornton said.

"China stopped taking ours until it becomes a low level of contamination point, 0.5 per cent. This means we may be able to get back into those markets.

"But it also means that what we're recycling in our household is less contaminated as well, because a lot of the glass, the heavy items, are taken out."

But it is unclear how much a national scheme would cost.

A 2014 COAG report estimated it could be up to $8 billion.

Victorian Environment Minister Lily D'Ambrosio declined a request for an interview, but in a statement said she was "continuing to monitor the implementation of container deposit schemes in other states to ensure the benefits outweigh the costs".