The $6 billion waste management group Cleanaway and plastics maker Qenos are weighing up a $500 million co-investment to help fill a hole left by the collapse of the RedCycle collection program where shoppers could return soft plastics to Woolworths and Coles supermarkets.

The two companies have been working for months on a plan to collect about 100,000 tonnes annually of the soft plastics via existing household garbage collections which Cleanaway trucks already undertake for hundreds of local councils.