Mr Evans' business backs onto the site of a proposed recycling plant, in Canberra's east.

Capital Recycling Solutions wants to divert 900 tonnes of rubbish a day from the Mugga Lane tip to its sorting centre, generating an extra 230 truck movements a day through the industrial suburb.

The company recently dumped plans to operate an incinerator on-site, after initially putting that part of the proposal on the backburner due to community resistance.

But plans for the recycling plant have also proved controversial. Local residents, and now business owners, have raised concerns about increased traffic and odour.

"We sell 2000 items every week out of our facility. Like most Fyshwick businesses we already have transport freight trucks coming and going on a regular basis, and hundreds of cars a day," Mr Evans said.

"If you add that proposed traffic in with all the consumer movement, there's no way AllBids can survive in that location."

Fyshwick is classified as an IZ2, or industrial mixed use zone.

While a recycling facility or a waste transfer station is permitted under the zoning, Mr Evans said the district was better known as a weekend retail destination.

"Fyshwick is part of Canberra's history. People come out looking to buy a car, or look for things for their home like curtains, flooring, then they go to Fyshwick markets on the way home. This would destroy Fyshwick as we know it," he said.

"I'm all for entrepreneurial solutions but it's inappropriate to have garbage trucks coming into the central part of Fyshwick."

Tony Levy has owned his property in Lithgow Street for more than 30 years, and has six tenants including a catering company and a flooring contractor.

He said while he was a "firm supporter" of private sector developments in Canberra, he envisaged "nothing but a continuous stream of trucks radiating out from the waste recycling centre to the extremities of Fyshwick".

"It's plain to see that traffic in and around Fyshwick, and particularly Ipswich, Wiluna and Lithgow streets, will become paralysed. Traffic could well be banked up as far back as the Fyshwick markets, around Harvey Norman and beyond and along Canberra Avenue towards Queanbeyan," Mr Levy said.

"A waste recycling plant on Section 8 is totally incompatible with the emerging business mix that flourishes in Fyshwick and continues to be encouraged."

However Capital Recycling Solution's director Adam Perry said many large cities had recycling plants, including Sydney and Melbourne.

He said the argument an extra truck every four minutes was nonsense and other businesses would not be as worried about congestion if they were building a Bunnings or an IKEA.

"The former Shell site was a rail terminal, holding millions of litres of fuel. We’ve carried out remediation work and now would like to gain approval to build a recycling plant and rail terminal," Mr Perry said.

"The project won’t smell or be heard, we plan to have a large, modern building. It will be a good looking structure, and waste trucks will disappear inside and do their thing. No one will be impacted. Sealed containers full of recyclable material, and non-recyclable residues, will come out and go onto a train every day. It’s pretty simple, neat and tidy."

ACT Planning Minister Mick Gentleman said it was incumbent on Capital Recycling to demonstrate its plant would not have an "unacceptable impact on the environment of the area" through its draft environmental impact statement out for public comment at the moment.

"Fyshwick is an evolving area and it is important that any new development within the area is assessed through a rigorous process like the one currently being applied," Mr Gentleman said.

Canberra Liberals' business spokesman Andrew Wall said the businesses he had spoken to were overwhelmingly supportive of new investment coming into Fyshwick, and there were already thousands of vehicles driving through the suburb a day.

"The question here is whether or not this is striking the right balance and that's part of the development, planning and environmental impact statement," Mr Wall said.