China's decision has affected Victoria's three recycling companies and councils are already experiencing flow-on problems, especially in rural areas, the Municipal Association of Victoria said on Friday.

Ratepayers could be asked to pay an increase of up to 2.5 per cent, on top of the 2.25 per cent state rate increase cap, if councils were forced to pass on costs, association chief Rob Spence said.

Council waste charges are not included in the cap, he added.

Mr Spence called on the state government to provide assistance so councils don't have to pull funding from other services or dump recycling in landfill.

"While rural councils have been the most directly affected to date, it has become clear that the impacts will be statewide, with significant cost implications likely for all councils and ratepayers," he said.

"A number of rural councils are already having to consider costly short-term arrangements in order for their recycling services to continue beyond this week."

Mr Spence also said the the state's landfill levy income should be used to bolster the recycling industry.

Mayors in the state's southwest, where the effects of the waste problem are being felt, also pushed for the levy to be put toward a solution.

"Proceeds from the levy could be used to resurrect recycling, and to assist councils to transition to new cost structures over a two to three-year period," Warrnambool Mayor Robert Anderson said in a statement.

Moyne Shire Mayor Mick Wolfe suggested the state government could suspend the landfill levy charge to offset increasing costs faced by councils.

Premier Daniel Andrews flagged the possibility of taxpayers stumping up cash to solve the problem, confirming ministers in his government were meeting with councils and recycling companies.

"We're hopeful of being able to have some positive things to say quite soon," he told reporters in Ballarat on Friday.

"The notion that we may have to step in and do more, which would potentially come at expense to Victorian taxpayers, we may have to do that, but we're working through those issues in a careful way."

Victorian Greens waste management spokeswoman Nina Springle said it was archaic to rely on landfill in the 21st century.

"A container deposit scheme and large scale composting are simple measure the Andrews Government can introduce to reduce waste quickly," she said in a statement.

Australian Associated Press