The UK's biggest coffee chain Costa Coffee has said it will recycle as many disposable cups as it sells by 2020 in a "cup recycling revolution".
Under the scheme, 500 million coffee cups a year would be recycled, including some sold by rivals, it said.
It will encourage waste collection firms to collect the cups by paying them a supplement of £70 a tonne.
About 2.5 billion disposable coffee cups are thrown away each year in the UK and 99.75% are not recycled.
They have a mixture of paper and plastic in their inner lining - designed to make them both heat- and leak-proof.
Environmental campaigners have welcomed Costa's move.
Costa managing director Dominic Paul told the BBC the move was "a cup-recycling revolution".
"By the end of 2020, we'll effectively be cup-neutral. We'll be recycling as many cups as we put into the system," he said.
Costa said "misconceptions" had arisen about whether a coffee cup could be recycled because of the plastic layer, which had "previously been considered difficult to separate".
However, the chain, which has more than 2,380 branches in the UK, said: "The actual issue lies in collecting the cups once they have been disposed of correctly."
Costa and other coffee chains do have recycling collection points for cups in their branches, but most takeaway coffees are consumed elsewhere, including in offices and on the street.
Under its new scheme, Costa will pay a supplement of £70 for every tonne of cups collected to waste collectors, plus £5 per tonne to to a firm that will check the scheme is running as it should.
As a result, waste collectors will get on average £120 for every tonne of cups they collect, up from £50 - a 150% increase.
The idea is to make it "commercially and financially attractive" for waste collectors to put in place infrastructure to handle the cups - from installing collection points in offices and elsewhere, to sorting them and taking them to recycling plants.
Five waste collection firms have been involved in developing the new scheme: Veolia, Biffa, Suez, Grundon and First Mile.
Grundon's sales and marketing director, Bradley Smith, said Costa was helping to create the right conditions for paper cups to become a valuable recycled material.
"This provides increased stability and confidence in the market, which will help waste management companies like Grundon to extend paper cup recycling services to more customers," he added.
Welcoming the announcement, Gavin Ellis, co-founder of environmental charity Hubbub, said there had been a significant increase in the UK's recycling facilities over recent months, and "the biggest challenge now is to make sure the used cups are collected and make it to the recycling plants".
And Environment Minister Therese Coffey congratulated Costa on taking a "significant step to help coffee lovers do the right thing and increase recycling".