As a result, an increasing number of trucks are taking Sydney's trash up the Pacific Highway to dump it across the northern border, with the waste industry estimating 1,000 tonnes of waste a week, or around 25 B-doubles, is now on the highway.

Queensland's Liberal National Party undertook to remove the levy if it won its state elections in March, with the election promise implemented on July 1, when the levy was removed. At the same time, the waste levy in NSW rose a further 10 per cent to $95.20 a tonne.

The NSW levy rises by $10 a year, plus the rise in the consumer price index.

"When the NSW levy was around $70 a tonne, there was no talk of shipping waste to Queensland, but that changed when the levy topped $80 a tonne," one senior industry figure said. "Now that the levy has topped $95 a tonne, trucks are on the road.

"The top end of town is now talking of establishing transfer stations to send waste north."

Geoff Gerard, business development manager at waste processor Sita Australia, said: "Queensland is now the dumping ground for NSW waste."

As a result, his company has deferred plans to invest $90 million on new facilities at its Lucas Heights site, on Sydney's south, with others in the industry such as Veolia also expected to shelf new spending on processing plants.

"We can't now afford to invest in NSW," Sita's Mr Gerard said. "The waste levy was brought in to redirect waste away from landfill. But now, infrastructure and employment will move elsewhere."

"Material should be treated, processed and recycled as close to the source as possible," Mr Tony Cade, marketing and sales director with Veolia Environmental Services said. The Queensland move "works against recycling".

"We are considering significant investment. The shift of volume to Queensland places a question mark over its viability."

Not only general waste is being put on the road, but a rising volume of contaminated waste is also being shipped north, including an estimated 3,000 tonnes of waste from Barangaroo, the redevelopment site on the western side of Sydney's central business district.

"The Queensland government's move has had the perverse effect of it receiving contaminated waste from NSW," the Total Environment Centre's Jeff Angel said of the changing dynamics.

Overall, the volume of waste being recycled has been increasing, although it has failed to keep pace with the increase in overall waste volumes, he said.

The NSW government began a review of the waste levy at the beginning of the year following pressure from both local councils and some recyclers, although the outcome will not be known until next year.

“The Government has been looking closely at this specific issue of waste going over the border to Queensland and is working with the EPA on potential solutions," a spokesman for the NSW environment minister Ms Robyn Parker said.

"We anticipate making an announcement in the New Year which will aim to resolve it.”

It is facing the loss of as much as $20 million in waste levies foregone due to the move to truck waste north, according to some estimates.