People have reported storing broken fridges and freezers in their gardens for months because some council collections have been suspended.
It follows the closure of specialist treatment facilities and a wider shortage of capacity to process cooling appliances, the Local Government Authority (LGA) said.
Recycling company Unimetals, which had dozens of sites in the UK, filed for liquidation in 2025 leaving tens of thousands of fridge freezers at Newport Docks.
The Department for Environment, Food and Rural Affairs (Defra) said it was working to manage the capacity shortages.
Almost a quarter of Welsh councils say they have suspended household collections of fridge-freezers due to a shortage of space at disposal sites.
"I tried to take it to the recycling centre in July but was told it wasn't accepted. Someone said the council would collect it, but they won't either."
It has been sitting in his back garden ever since and he does not know when council collections will resume.
Lee said he was also confused by the different policies in neighbouring councils.
"If I lived in Barry or Penarth (Vale of Glamorgan) they would be able to collect it from the kerb. I don't know why I can't in Cardiff."
The Welsh Local Government Association has been asked why some councils are still able to carry out the collections while others are not.
Michael Enea, a campaigner in Newport who blogs about fly-tipping, said he often saw the old appliances at the side of the road and thinks this could now get worse.
"I think there'll be a lot of people in local communities where they don't have the ability to dispose of their fridges and freezers, who will end up literally dumping them in the street.
"We see it quite a lot in Newport and right over Wales."
Oxfordshire County Council has urged the UK government to reopen the Newport plant to help with the "crisis".
Associated British Ports, which took over the running of the Newport site, said it was "in discussions with third parties" about the future of the site and materials.
A spokesperson added: "In the interim, the material is being managed responsibly as part of the site's transition and will be transferred to another specialist recycling operation in due course."
Dr David Santillo, a research scientist at Greenpeace, said it was possible that some of the fridges and freezers at Newport Docks still contained "some of the most harmful chemicals" such as hydrofluorocarbons (HFCs).
HFCs are mainly used in air conditioning, industrial chillers and fridges, but are also powerful greenhouse gases.
Chemicals such as isobutane, pentane and ammonia can also be found in commercial-type fridges, Dr Santillo added.
"None of these chemicals are benign. They all have the potential for harmful effects, or they can be toxic if they leak," he said.
Santillo said some older chemicals could have a "much wider impact" on the environment and leaving appliances out for long periods had the potential to produce "toxic smoke" if a fire breaks out.
Santillo said the recycling of fridges and freezers was a national issue and he urged the UK government to "step in and find a solution".
Defra said it appreciated the "challenges" facing local authorities, and was working to manage the impact of treatment capacity shortages.
It added: "This includes allowing the storage of fridge and cooling equipment on temporary sites provided certain conditions set out by the Environment Agency are met."
Regulator Natural Resources Wales said it was "aware of the pressures" affecting operators across the UK.
It added that it was providing "regulatory flexibility" to help manage temporary storage pressures and would "continue to support efforts across the sector to restore treatment capacity and minimise disruption".
The Welsh government said it was working with NRW, local authorities and the UK government to "manage the situation and support a return to normal capacity."