Capsule recycling system for domestic coffee machines

The system and method for used capsules (11), such as coffee capsules, with a lid and a capsule body, comprises at least cutting means (17) to cut the lid from the body, capturing means to extract the cut lid from the body, compacting means (12, 14) to compact the body of the capsule thereby extracting the coffee contained in said capsule and recuperating means (40, 41) to recuperate the coffee on one side and the cut lid with the compacted capsule body on the other side such that the materials are separated.