Up to 1.2m cigarette butts could be consumed by oyster mushrooms that break down toxins and microplastics as part of a trial funded by the Victorian government.

Up to 9bn plastic cigarette butts are discarded in Australia each year, according to the World Wide Fund for Nature, seeping harmful microplastics and chemicals such as arsenic into waterways and soil.

Sustainability Victoria will fund a program that diverts butts from landfill to a laboratory, where fungi will consume the plastic and chemicals. Studies will then determine if the byproduct produced can be transformed into a polystyrene replacement.

The program will be run by Melbourne-based Fungi Solutions, which has spent years training mushrooms to consume cigarette butts, mimicking a process that occurs naturally in the wild.

“Mushrooms have an incredibly adaptive digestive system and they use a lot of different things for food sources,” said Amanda Morgan, the chief executive and head of research at Fungi Solutions.

“This particular material is quite toxic so it takes a while to encourage them in that direction, but we now have a strain of fungi that is going just exclusively on cigarette butts alone.”

Morgan said most of the cigarette butts were consumed within seven days and mushrooms can be quickly cultivated to consume large scales of plastic if required. Cigarette butts would otherwise take 15 years to break down in landfill.

“[Cigarette butts] are a really challenging pollutant so anything we can do with them is good news for the environment,” Morgan said.

“We think it’s the start of a really interesting conversation about how to recycle our materials responsibly and establish a circular economy.”

The program is also led by environmental group No More Butts, which hopes to expand the scheme if successful. Its founder, Shannon Mead, said removing 1.2m butts from landfill was a realistic target for the trial.

“We looked at what was feasible to collect from 80 businesses across Melbourne in just under one year as well as the funding available from Sustainability Victoria,” Mead said.

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“We’re aiming to go even higher if funds are available, and if that happens it could be the only commercially scalable recycling opportunity for cigarette butts in Australia.”

Wollongong city council launched a two-year trial with Fungi Solutions in 2021, which indicated mushrooms can remove most of the toxins.

But Morgan said more testing was required before the mushroom byproduct can be recycled.

“We still need to be doing a fair bit of lab testing to have a look at the toxicity breakdown before and after remediation, but we are hoping that we can develop a nice clean material byproduct from this process,” Morgan said.

Around one-third of the nearly 100 chemicals inside cigarette butts are “acutely or chronically toxic” to sea life, according to Clean Up Australia. Butts have been found in the stomachs of birds, turtles, whales and fish.

Last month, Guardian Australia revealed a taskforce to reduce cigarette butt pollution promised by the former Coalition government two years ago was never established.

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