A Chinese ban on the import of plastic waste poses major challenges for the UK’s recycling industry, which ships more scrap to China and Hong Kong than any other destination.

British companies have shipped more than 2.7m tonnes of plastic scrap to mainland China and Hong Kong since 2012 – nearly two-thirds of the UK’s total waste plastic exports, an Unearthed analysis of customs data reveals.

But China has announced it will stop imports of “foreign garbage” from early next year, saying it found imported recycling material was contaminated with “large amounts of dirty wastes or even hazardous wastes”.

The rules are still being finalised but appear to include tough quality standards for industrial plastic scrap, and a total ban on plastics from household recycling.

Waste charity Wrap estimates that household plastics to mainland China and Hong Kong account for about a quarter of the 790,000 tonnes of plastic scrap the UK exported last year.

Recycling industry sources told Unearthed the ban threatens to tip Britain’s already stretched recycling sector into crisis, as a chronic shortage of capacity to recycle plastics in the UK collides with the near-total closure of the world’s biggest market for waste household plastics.

I don’t think anybody could hand on heart say some of it might not end up in a landfill site

Councils may be forced to stop collecting some kinds of plastic for recycling, and the situation could endanger the UK’s ability to meet its recycling targets. Waste companies are pursuing new export destinations for plastics, but are also considering temporarily burying plastic waste, incineration, landfill, and even converting it into jet fuel.

But environment secretary Michael Gove told MPs last month: “I don’t know what impact it will have. It is… something to which—I will be completely honest—I have not given sufficient thought.”

The situation highlights the complexity of disposing with the vast quantities of plastic waste the UK produces each year – in 2016, over a million tonnes of plastic was collected for recycling, Environment Agency figures show. The UK exports around two-thirds of this material, a previous Unearthed investigation revealed.

The ban will also seriously affect exports of waste paper. In September the head of the Resource Association, Ray Georgeson, told a conference: “There is an urgent need for the government to get on the plane to Beijing to take a delegation to China and start negotiating.”

Georgeson told Unearthed: “This is a serious, shaky issue for the UK recycling supply chain and it won’t be solved by the long-term measures we all know are needed… There will be a bit of a scramble for solutions.”

“There’s a lot of uncertainty in this,” said Adam Read, external affairs director at waste management company Suez. He described a lack of clear UK recycling and waste strategy, shortage of domestic capacity to recycle, uncertainty caused by Brexit and now the China ban, adding: “I think there’s an impending crisis,” he said.

The company is exploring new destinations, including India and south-east Asia, and discussing ways to increase recycling capacity in the UK. It has even worked on a test project with British Airways to examine whether plastics could be converted into jet fuel.

It is “inevitable” that some plastics will end up being incinerated, Read said – but UK incinerators are also stretched. “I don’t think anybody could hand on heart say some of it might not end up in a landfill site.”

Warehouse space is likely to fill up quickly, and Read said options being considered include “temporarily” burying plastics in landfills until new solutions are found. “There’s no obvious answer,” he said.