The NSW government is looking at better ways of dealing with old cars that are dumped in tips or bush.
The move forms part of a suite of proposed changes to vehicle registration the government unveiled last week.
Called the Vehicle Registration Initiatives, its main thrust includes registration reductions for buying safer eco-friendly cars.
Also in the discussion paper is a call for feedback on ways to reduce the environmental impact of old cars - referred to as "End of Life Vehicles" or ELVs.
These include burnt-out vehicles and those that have been crushed or written off.
The paper estimates that Australia sees more than 600,000 ELVs each year, which can leave a significant environmental footprint
"While ELVs are one of the most highly recycled consumer products due to strong markets for recycled metals, they still produce up to 195,000 tonnes of waste in Australia per year - approximately 1 per cent of total annual waste," the discussion paper said.
The environmental impacts of this include the potential release of liquids, gases and heavy metals into the ground and water supply.
Other countries already have vehicle recycling laws - in Japan a buyer must pre-pay the estimated recycling costs when purchasing a new car.
The Netherlands includes a recycling fee as part of registration.
The NSW government is not putting forward a proposal for ELVs at the moment, but is looking to start discussion.
However, the Vehicle Registration Initiatives paper does include some suggestion as to how an ELV policy could work.
These include creating sanctioned ELV crushing stations, which could issue certification to car owners who dispose of their vehicle there.
That certificate could then be used to receive a discount on a car that meets certain safety and environmental criteria.