The Ipswich City Council says China's import ban on recycling and the rising level of contaminated rubbish in yellow bins means it is too costly to recycle properly, so all its recycling will go straight to the tip.
Mayor Andrew Antoniolli said Ipswich was the latest to be affected by the nationwide issue, and eventually all councils would be impacted by the viability of recycling household waste.
"While it is fair to say the national recycling system broke down sooner than we expected, Ipswich has been looking to the future," he said in a statement.
"I have spoken personally to [Environment Minister Leeanne Enoch] on this issue, and made it clear that we've been backed into a corner on recycling."
He said recycling contractors notified the council the current rate paid to them would skyrocket by $2 million a year if recycling was to continue, which could potentially lead to a rate rise of up to 2 per cent.
On January 1, China stopped accepting 24 categories of solid waste, disrupting the export of more than 600,000 tonnes of material out of Australia each year.
In response, recycling company Visy stopped accepting waste from 22 Victorian regional councils on February 9.
Visy told a parliamentary inquiry into recycling last October that without China buying recycled waste, material would start piling up.
Waste Recycling Industry Association of Queensland chief executive Rick Ralph described Ipswich council's decision as "outrageous".
He said members from the sector met with Cr Antoniolli in December and offered to setup a working group to assess the issues.
"The Mayor agreed that that was potentially a good idea and said that he would reach out to industry in the new year," Mr Ralph said.
"And since that time there has been no connection with industry. All council has done is make it increasingly difficult for us to have any confidence to invest in the sector."
Ipswich Deputy Mayor Wayne Wendt pointed to the ABC Four Corners program on waste last year, saying contamination inside yellow lid recycle bins has since doubled.
"Under the current and previous rates of contamination, waste experts advise it would be almost unachievable to lower the rate of contamination to acceptable levels," he said.
For recycling to continue, he said that meant council would need to halve the amount of pizza boxes, food waste, plastic bags, disposable nappies, grass clippings and garden waste, broken plates, coat hangers, light bulbs, dirty tissues and serviettes, and foam packaging being stuck in yellow bins.
"In a nutshell, this means we're left with no choice but to send yellow lid bins to landfill."
Cr Antoniolli said the council would look to waste-to-energy solutions into the future, but would continue to look for recycling solutions in the meantime.
Brisbane City Councillor Peter Matic said there would be no change to Brisbane's recycling program.
"Brisbane has been recognised as Australia's most sustainable city, which is in part attributed to our best-practice recycling practices," Cr Matic said.
"A total of 93 per cent of materials placed in Brisbane yellow-top bins are able to be recycled, due to an extremely low contamination rate, unlike other local government areas."
Logan City Council told the ABC it remained committed to its recycling program, with Visy under contract until at least 2021.
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