Figures in the state government's half-yearly budget review released late last year show the Treasury will collect an extra $133.4 million this fiscal year from its waste and environment levy, and an additional $726.7 million over four years.

For 2018-19, that fillip will supply a fifth of the total projected revenue boost of $661.8 million. Based on a Sydney metro levy of $141.20 a tonne, the increase implies about an extra million tonnes of waste a year will be headed for landfills - straining capacity.

"There is not much space at all," Rose Read, chief executive of the National Waste and Recycling Industry Council, said. "It's getting closer and closer to being a real risk if something falls over."

Contributing to the expected jump in landfill waste are China's "National Sword" waste import ban, Sydney's construction boom and the introduction next July of a landfill levy in Queensland. The northern neighbour has been taking about 800,000 tonnes annually of NSW detritus.

Colin Sweet, chief executive of the Australian Landfill Owners Association, said NSW has "a critical problem ... we are getting very close to a pinch point", with just three major landfill sites serving Sydney.

Only two of them can take so-called putrescible or organic waste: a facility operated by Suez at Lucas Heights and one by Veolia at Woodlawn, near Canberra. (The third is at Eastern Creek, in Sydney's west.)

It would only take a bushfire in the Royal National Park or one that cut the rail link south - waste freight to Woodlawn is only by train - to leave Sydney's councils unable to empty residents' red bins.

"Uncollected putrescible waste becomes an immediate threat to human health - imagine garbage bins full and overflowing with rotting garbage," Mr Sweet said. "It's not just a government problem, it's a public health issue."

Ms Read said governments around Australia collect about $1.5 billion annually but invest only about a fifth of that back into efforts to reduce waste, recover more resources and build the facilities to handle the rest. While the government was eyeing a waste windfall, its lack of a plan doesn't give her great confidence it will be well spent.

"NSW is really falling behind other states, Victoria and South Australia, in particular," Ms Read said. "It's really lost its way in the past few years."

A spokeswoman for the Environment Protection Authority said the levy was funding the nation's largest waste and recycling program: Waste Less Recycle More.

"$802 million is being invested to drive waste avoidance, increase recycling, support organics collections, managing problem wastes, new waste infrastructure, and programs to tackle illegal dumping and litter," the spokeswoman said.

Funds had gone to 1160 projects, diverting 2.39 million tonnes of waste from landfill annually, and creating almost 1000 jobs.

The EPA was also leading work to develop a 20-year Waste Strategy for NSW, she said.

Mr Sweet, though, said that strategy was probably a year away from completion, and a new landfill site would probably take a decade to open. "NSW has been very slow to react" to the range of challenges, he said.

Cate Faehrmann, the Greens environment spokeswoman, said the government was using the levy largesse to "prop up their budget bottom line instead of responding to the serious and escalating waste crisis in NSW".

“It is scandalous that the government will invest only 16 per cent of the $2.1 billion raised by the waste levy over the next four years into reducing waste despite the massive and unsustainable increases to landfill predicted," she said.

The Greens want all of the levy collected used to deal with waste management, the banning of all single-use plastics and the appointment of a Waste Commissioner to coordinate waste reduction.

Jeff Angel, head of the Total Environment Centre, said the major challenges - increasing tonnages of waste in the absence of substantially effective policies that make big advances on recycling and waste avoidance - had been known for the past two decades.

"We don't want more landfills, incineration and wasted resources, but that is the future we are facing if government, industry and the community don't get on top of the problem," Mr Angel said.

"It's time to reduce the consolidated revenue take of waste levy money, improve regulation, and make even bigger investments in reducing waste," he said.

Tony Khoury, head of the Waste Contractors and Recyclers Association of NSW, said his industry had been "very, very disappointed" in the government's handling of the sector.

He cited its introduction of the so-called "proximity principle" in November 2014 aimed at stopping the carting of waste more than 150 kilometres in an effort to spur local recycling and waste avoidance schemes.

"There hasn't been a single prosecution - that law was doomed from day one," Mr Khoury said.

The result was "marginal or rogue operators" had carried on regardless, particularly in shipping waste to Queensland. "If the law doesn't work [for constitutional reasons], then get rid of it," he said.