Victoria's environmental watchdog has ordered a recycling plant in Melbourne's west to stop accepting materials, months after it was briefly shut down amid compliance concerns.

Key points: Inspections in June revealed concerning stockpiles of combustible recyclable waste at SKM's Laverton North and Coolaroo sites

Inspections in June revealed concerning stockpiles of combustible recyclable waste at SKM's Laverton North and Coolaroo sites EPA officers inspected the Laverton North site following a conveyor belt fire on Monday

EPA officers inspected the Laverton North site following a conveyor belt fire on Monday SKM's Laverton North site has been banned from accepting more waste, but the Coolaroo site is unaffected

SKM Recycling will have to turn away any waste deliveries from its Laverton North site after the Environment Protection Authority (EPA) raised concerns about its waste stockpiles.

The agency said the ban announced today was would take effect from 1:00pm tomorrow to reduce any "potential risks to human health and the environment posed by stockpiles".

"Enough's enough, and we have an expectation that SKM become compliant at the Laverton North site," the EPA's acting chief executive Paul Stacchino said.

"We were quite surprised with the amount of waste there and the non-compliances.

"They've allowed waste to be stockpiled in a manner that is contrary and non-compliant with the waste management policy and that is actually bringing a hazard in the context of fire that is unacceptable to us."

The ban follows a notice issued by the EPA last month which required the company to bring its stockpiles of waste at centres in Coolaroo and Laverton North into compliance with Victoria's waste policies.

"During June inspections, EPA officers observed large stockpiles of combustible recyclable waste materials from kerbside collections stored without appropriate separation distances between stockpiles, buildings or the premises boundary," the EPA said.

The EPA said it observed large stockpiles of potentially combustible materials without appropriate storage during June inspections. ( ABC News )

"Today's regulatory action follows an inspection with co-regulatory partners this week that revealed waste on site had increased following the extension of time for compliance.

"EPA is of the opinion that SKM understood its obligations under the notices, but had not demonstrated a move towards achieving compliance at the Laverton North site."

"We saw the extra waste that wasn't in good faith of the extension," Mr Stacchino said.

No more waste 'until EPA satisfied'

It follows a fire on a conveyor belt at the site on Monday.

Melbourne Fire Brigade (MFB) crews were called to SKM Recycling's Laverton plant just after 5:30pm on Monday.

The MFB said it found a "deep-seated fire in a processing machine, surrounded by tonnes of waste", and brought the blaze under control in under 40 minutes.

"The company will still be able to process waste at its Laverton North site while the notice is in place, but will not be able to receive any new materials until EPA is satisfied that it has achieved compliance with the Victorian Waste Management Policy," the EPA said.

The company's Coolaroo recycling plant was the site of a major blaze in 2017. ( ABC News )

The depot at Coolaroo has been given until July 17 to comply with the notice.

Mr Stacchino said there was the potential for the recycling waste to now go to landfill and it was "incumbent on SKM" to become compliant as soon as possible.

"Victoria's seven waste and resource recovery groups can support local councils to work with recyclers and other service providers to minimise any impacts to kerbside collections if further action is required at the SKM sites," the EPA said.

SKM Recycling accepts waste from 30 Victorian councils, and it is estimated the Laverton North shutdown will impact up to 10 councils.

The ban relates to failures by SKM to comply with the Victorian Waste Management Policy, introduced after the fire at its Coolaroo site in 2017.

In March, the company and its director were charged by the EPA over a 2017 fire at the Coolaroo site which burned for several days and led to the evacuation of more than 100 homes.

"That policy talks about the need for the size of waste piles, it talks about the separation that's required, and it talks about a whole range of site practices that ensures further hazard created by that waste," Mr Stacchino said.

SKM Recycling was banned from accepting materials at both its Laverton North and Coolaroo sites in February amid concern stockpiled waste at the site posed a major fire risk.

Those bans ended in March after the company took action to reduce the stockpiles.