The report accused coffee shops of "pulling the wool over the eyes" of consumers by suggesting all cups get recycled when fewer than 1 per cent do.
It's been dubbed the "latte levy" - a tax on the billions of takeaway coffee cups that Britons are throwing away every year. Since litter encourages more littering, this creates a vicious cycle.
The environmental audit committee's report said: "Coffee shops with recycling schemes should place a "recyclable in stores only" label on cups".
Disposable cups contain a plastic lining that makes them hard and expensive to recycle.
Edwin Harrison, owner of the independent Artisan coffee shop in West London, fears many of his customers would stay away if a charge was brought in.
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"We're calling for action to reduce the number of single-use cups, promote reusable cups over disposable cups and to recycle all coffee cups by 2023", she said.
It says that today 1.8% of its customers use reusable cups and that now it costs £1 to buy one from Starbucks.
ACE also stated that it is working with local authorities and waste management organisations to include disposable cups in kerbside collections.
This week, Pret doubled the discount offered to customers who bring in a reusable coffee cup from 25p to 50p.
The amount of carbon dioxide emitted by the production and shipment of 2.5 billion cups - the number discarded in the United Kingdom every year - is equivalent to that produced by burning around 120 million litres of petrol.
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Unsure of how else to hammer eco-mindedness into customers, Starbucks said today that it will try a preemptive cup charge of its own. The trial will begin next month and initially last for three months.
"As we increase our understanding of pollution and non-recyclable plastics on our streets and in our seas, its impact on wildlife, then educating the public on how they can play their part is going to be critical".
"We recognise that there is growing concern about the number of single-use paper cups being used and that our customers are interested in ways that we can help them reduce, reuse and recycle". That's just one out of every 400 cups.
Mr Palmer-Jones said: "For any so-called latte tax to be more than just a light and frothy foam nod to reform, we need to wake up and smell the real coffee needed for a lasting brew".
"The public needs a simple, United Kingdom wide solution, one which is made possible by the introduction of an on-the-go waste management infrastructure". A 25p charge, which works out at over £20,000 per tonne, would most likely be considered as legally accounting for the producer responsibility obligation for disposable cups so effectively shifting the charge from the producer to the consumer.
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In a statement Friday, the committee said that revenue from the levy should be invested in reprocessing facilities and recycling "binfrastructure".