LEIGH SALES, PRESENTER: Australia's recycling industry has been in crisis ever since China stopped taking our waste in 2017.

Now local scientists have developed a home grown solution they claim could eliminate our stockpiles of plastic waste.

NADIA DALY, REPORTER: Every year Australians throw out millions of tonnes of plastic. But the local recycling industry can only deal with about a 10th of it.

The rest is either burned, buried or shipped overseas.

LEN HUMPHREYS, CEO, LICELLA: I think when I put my recycling material in my bin, that's what's going to happen. I don't think that only a small percentage of that is going to go around the circle economy, but the rest is going to go to landfill.

PROF DAMIEN GIURCO, INSTITUTE FOR SUSTAINABLE FUTURES, UTS: The current system that we have is not going to be sustainable for the longer term.

NADIA DALY: When China stopped recycling Australian waste, it was a wake-up call for the local industry.

LEN HUMPHREYS: The responsible thing is for us to deal with our material here, but we simply don't have the infrastructure to deal with it.

NADIA DALY: Scientist Len Humphreys, and a collaborator from the University of Sydney have patented what they believe could be a revolutionary solution for our growing mountain of rubbish.

LEN HUMPHREYS: This is the 80 per cent of material that we don't recycle today. And all of it will go to landfill.

(vats with different types of plastic materials)

NADIA DALY: So you've got things like wetsuits, sawdust, all these things that can't be recycled and these can be turned into an oil and then back into a plastic.

LEN HUMPHREYS: So what we're doing is we're simply taking those materials and converting them back to the liquids and the chemicals they came from.

NADIA DALY: The process uses hot water at high pressure to chemically transform the plastics back into oil. From there, they can be turned into plastic, bitumen or even petrol.

That may sound familiar to sci-fi fans.

(Excerpt from Back to the Future)

DOC BROWN: Marty! You've got to come back with me!

MARTY MCFLY: Where?

DOC BROWN: Back to the future.

NADIA DALY: The movie Back To The Future features a time machine car fuelled by rubbish.

DOC BROWN: I need fuel.

NADIA DALY: And after a decade of testing, Len Humphries says it's no longer just science fiction.

(Len Humphries pours a vat of plastic particles into a machine)

Unlike conventional recycling, the chemical process they've invented means different types of plastic don't need to be separated, allowing plastic waste to be recycled over and over again.

(Len Humphreys turns a spigot and black oil comes out of a spout underneath the machine into a beaker)

LEN HUMPHREYS: This is the final product. This is the oil that we're going to use for building blocks for new plastics.

NADIA DALY: And this can now be turned back into other plastics?

LEN HUMPHREYS: More pots, tubs and trays for yogurts.

NADIA DALY: Or petrol?

LEN HUMPHREYS: Oh petrol! Yes. For your car.

NADIA DALY: Right.

This is just a pilot plant but the company says if it's scaled up to a commercial facility, it could process 20,000 tonnes of plastic a year. That's a lot of plastic - but it's just a drop in the ocean of the 3.5 million tonnes Australians use each year.

LEN HUMPHREYS: Then we're looking at something like 20 to 30 plants, because you can't get 20,000 tonnes - some communities are less.

It will substantially help to make Australia plastic neutral. And that's not a lot of plants.

NADIA DALY: While they chase investment dollars at home, their company Licella is preparing to open its first commercial facility abroad in the UK, where they say there were more government grants and concessions for their business.

LEN HUMPHREYS: They incentvised the market. We don't do that here. We're not incentivising the market here.

But we're five or six years behind the thinking of what really stimulated the markets in Europe.

SUSSAN LEY, ENVIRONMENT MINISTER: It's not about grants or about government paying for something to be done. It's about government supporting the entire supply and investment chain in a way that allows business to do what it does best.

NADIA DALY: Environment Minister Sussan Ley says the Government is in talks with Licella about their technology and how it could be commercialised in Australia.

SUSSAN LEY: I'm looking forward to meeting with Licella, and hearing about what their plans are and how the Australian Government may be able to support them.

NADIA DALY: Professor Damien Giurco from the Institute of Sustainable Futures at the University of Technology Sydney says the process developed by Dr Humphries is a great innovation, but the bigger issue Australia needs to face is its overconsumption of plastic.

PROF DAMIEN GIURCO, INSTITUTE FOR SUSTAINABLE FUTURES, UTS: When we think about how we need to design our systems for plastic use and reuse in the economy, one technology is not going to be a silver bullet.

NADIA DALY: As far as Len Humphries is concerned, we already have the technology to recycle all the plastic we use - and all that's holding Australia back is the will to change a broken system.

LEN HUMPHREYS: In the next 10 years, we could do that. The technology is there, and the know how is there. We just need the motivation and the stimulus to get that circular wheel turning.