MONMOUTHSHIRE council's contract with its green waste recyclers Wormtech is up for discussion tomorrow.
The Caerwent-based company, which was banned from taking in the county's garden and food material by the Environment Agency after E.coli and salmonella was found at its site, cannot continue with alternative arrangements that were made, according to one of its directors.
Jackie Powell said RoseHill Invessel Composter at Dymock, Gloucestershire is not currently able to take any more waste as it is full.
The council's cabinet member for county operations Cllr Bryan Jones said in the meantime the waste is being dealt with by Viridor, at other sites out of the county which will not affect the service to householders.
He told the Argus it is costing the local authority an extra £4 per tonne, which would add up to an extra £40,000 if it continued for a year.
"There are very few places around which deal with this waste," he said.
Cllr Jones added discussions between the council's officers and Wormtech will aim to resolve the current situation and what will happen longer term.
The Wormtech contract is due to run until 2018 and Ms Powell said it is "very important."
"We are doing everything in our power to fulfill it," she said.
As previously reported, the Environment Agency notice means Wormtech cannot bring in any more waste until it proves it has sealed its buildings and has until January to submit reports.
The notice was served in July after E.coli and salmonella was found at the Gwent site.
In May 2011, Wormtech was fined £41,000 after polluting a water supply and forcing a Ministry of Defence training base into quarantine for three months.
In the future, Monmouthshire council is looking to anaerobic digestion to dispose of its waste, Cllr Jones added.