Another Victorian recycling plant has shut its doors to recyclable waste, putting increased pressure on the state's struggling system and forcing more councils to turn to landfill.

Key points: Close to 30 Victorian councils are scrambling to find somewhere to put recyclable waste

Close to 30 Victorian councils are scrambling to find somewhere to put recyclable waste Municipal leaders call on the Victorian Government to acknowledge there is a crisis

Municipal leaders call on the Victorian Government to acknowledge there is a crisis The State Government says local councils should have their own contingency plans

The South Geelong plant is the third of SKM Recycling's facilities to close, after the Environment Protection Authority (EPA) shut the company's plants at Laverton and Coolaroo amid fears about the fire risk posed by growing stockpiles.

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.

SKM — which handles half the state's recyclable waste — was diverting material to its South Geelong facility after the EPA shutdown, but it advised councils on Wednesday that facility had reached capacity and it would not be accepting waste "for the next few weeks".

Councils scrambling for a solution

There are now close to 30 Victorian councils struggling to find somewhere to dispose of their recyclable waste.

More than 10 regional councils have confirmed they have been affected by the most recent closure.

These include the second largest city in Victoria, Geelong, and several councils in the region, including the Surf Coast Shire, Colac Otway Shire, Borough of Queenscliffe and Golden Plains Shire.

"As an interim measure, recyclable materials will be sent to landfill," a City of Greater Geelong statement said.

"We expect recycling to resume as normal at SKM Geelong within the coming weeks."

Several regional councils were planning on stockpiling their recycling until a solution was found.

The mayor of the Pyrenees Shire in western Victoria, Robert Vance, said residents were being asked to hold on to their recycling for now.

But he said there was no certainty a solution would be found.

"More than likely it will end up in landfill," he told ABC Statewide Drive.

"This is a wake-up call."

Cr Vance said while it was the responsibility of local government to collect kerbside recycling, the scale and complexity of the industry's failure meant it was "up to the state and the Federal Government to guide us to answers".

'An absolute crisis,' councils warn

The president of the Municipal Association of Victoria (MAV), Mary Lalios, said it was time the State Government recognised the seriousness of the situation.

"It's an absolute crisis and it needs to be acknowledged as one. The current model is not working," she said.

"Some of the smaller shires in that Geelong area, if they have to take recyclable materials to landfill, it's going to be crippling for them. They won't be able to afford the cost."

Cr Lalios said metropolitan councils were spending between $20,000 and $30,000 a week to send recyclable waste to landfill.

"Communities have already paid for this material to be recycled. It's collected through council rates on behalf of the State Government through a landfill levy," she said.

"The landfill levy is now being stockpiled into a sustainability fund that the state is sitting on — it's half a million dollars sitting there."

A massive fire at a Coolaroo plant in 2017 forced evacuations and prompted a statewide audit of recycling facilities. ( Twitter: Paul Stacchino )

Pressure has been mounting on the Victorian Government to take more steps to address the issue since China stopped importing low-grade Australian waste last year.

But the Victorian Government said it had provided $13 million last year to help local councils and recycling businesses to renegotiate their waste management contracts.

Victoria's Local Government Minister, Adem Somyurek, could not say how long the crisis was likely to drag on for.

"What we do need is a sustainable solution, you can't rush these things. And it's up to councils to have contingency plans," he said.

"They're big sophisticated organisations — they're big enough and sophisticated enough to have contingency plans of their own."

Only two Melbourne councils, Casey and Moonee Valley, have confirmed they are no longer sending their recyclable waste to landfill.

In a written statement, Moonee Valley City Council said it had found an alternative company to process its recyclable waste.

"We are pleased to have made alternative arrangements with another processor to take our kerbside recycling until processing at SKM resumes," the statement said.

SKM has been contacted for comment.