About 2.5 billion paper cups are used in the United Kingdom every year. As a result just six million - 0.25% - are recycled.
It also said it would trial a 5 pence per cup charge in around 20 stores in central London for three months starting February.
The #coffeecups mission began after it was revealed that only one to two percent of coffee drinkers were motivated by discounts to bring reusable cups to shops. Costa and Pret a Manger have also been promoting their similar discounts on Twitter in response to today's report.
The committee also suggested the Government place some of the financial costs of recycling on the packaging producers. "We must not allow the packaging industry to water down these recommendations any further".
The report said most of the 2.5 billion disposable coffee cups thrown away every year are incinerated, exported or landfilled.
If the target for recycling all disposable coffee cups by 2023 was not met, then the government should ban them altogether, the committee added.
"The onus should not just be on the consumer". If that can't be achieved, they want the government to ban disposable coffee cups completely. "We are committed to increasing recycling rates", said Mike Turner, of the Paper Cup Alliance.
One system created to tackle the problem already exists.
Chief Executive of the Resource Association, Ray Georgeson, "welcomed the attention" being placed on the issue, adding: "Infrastructure for the collection, sorting and recycling of "on the go" disposable products has not kept pace with society's demand for convenience food and drink".
A spokesman for Starbucks said of 5p charge trial: "We recognise there is growing concern about the number of single-use paper cups being used".
Disposable cups can not be recycled by the normal systems because they are made from cardboard with a tightly bonded polyethylene liner, which is hard to remove, and means they are not accepted by paper mills. "The government must do the same and introduce the levy as soon as possible". To fund this requires a reform of the UK Producer Responsibility (Packaging Recovery Note) mechanism...
At least 2.5 billion disposable cups are thrown away every year. That contaminates the waste and makes recycling more costly.
A report by the United Kingdom parliament's Environmental Audit Committee says that the 25 pence (28 euro cent) tax would go toward improving reprocessing facilities and "binfrastructure" to ensure that all disposable cups are recycled.
No major coffee chains apart from Starbucks have announced plans yet to charge customers for their disposable cups.
Green Party lawmaker and EAC committee member Caroline Lucas told the Thomson Reuters Foundation that the reforms were "long overdue" and hoped that they would change behaviour. Companies across the industry have been working to address this barrier and increase cup recycling.