The ubiquitous yellow recycling bin could become obsolete, with a report recommending Australians separate different types of plastics, as well as cans, bottles and cardboard for recycling.

Instead of chucking your milk container in with your cans and junk mail flyers, you'd be expertly filing each into one of at least five separate crates: glass, cardboard, paper, and two grades of plastic.

This sorted waste would then be collected from the kerb each week, as per usual.

Doing this would increase the value of the kerbside recycling waste from $2 per tonne to up to $156 per tonne, according to an analysis by accounting firm EY.

Soft drink cans, for example, can be worth up to $1000 per tonne. High-density polyethylene milk bottles can fetch $500 a tonne - way more than the $110 a tonne for mixed plastic waste.

The company's report finds a nation-wide system of pre-sorted recycling waste would capture up to $328 million worth of recyclable material per year.

The existing co-mingled system captures only $4.2m a year; in effect, the lost value of not sorting kerbside recycling is $324m each year.

"We are starting to see a shift in our thinking but need to do more to treat our waste as a tradeable resource, like iron ore or gold," the report says.

We cannot realise this value without a seismic shift in consumer behaviour.

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Whatsapp Market value of types of recycling waste.

Victorian councils already adding extra bins

As the report notes, for many years Australia has been exporting millions of tonnes of plastic and other recyclable waste, rather than processing it here.

This is expensive. Last financial year, Australia exported close to 4.5 million tonnes of waste overseas - mainly to Asian nations - at a cost of about $2.8 billion to state and territory budgets.

Also, many of the nearby countries that were accepting our unsorted waste have announced they'll be phasing this out, raising the prospect of a massive recycling backlog as local recycling plants struggle with the extra volume.

In August, Australian state, federal and local governments agreed to phase out exporting recycling waste and boost local recycling capacity, saying this was an opportunity to make money out of waste.

That commitment, however, was short on detail.

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Whatsapp Rubbish bins on kerb.

The EY report presents a potential course of action, though it doesn't say how governments will convince people to separate waste; the public will effectively be doing the work that's meant to be done by recycling plants, but without an economic incentive.

The report recommends "providing incentives for households", clearly labelling packaging so it's clear what goes in which bin, and setting up national container deposit and re-use schemes.

This week, the Surf Coast Shire in Victoria, which covers Torquay, Angelsea and Lorne, has proposed adding an extra recycling bin to separate glass from other recycling, and even a fifth to separate cardboard and paper from plastic.

The council has been forced to dump 350 tonnes of recycling a month into landfill since the collapse of recycling company SKM, which collected for 30 councils across the state.

The firm appointed as receiver for SKM reportedly said there was a "mismatch" between what's meant to be recycled, and what's in the yellow bins.

The EY report found that contamination rates in Australia average between four and 16 per cent of collected recyclable material.

"These high contamination rates are a key reason why countries across Asia closed their doors to Australia's waste," the report says.