The Rotorua District Council has been given $4.7 million by the Government to build a world leading waste treatment plant which turns sewage into valuable resources.
Environment Minister Amy Adams said the grant was the largest to be awarded from the Waste Minimisation Fund.
The innovative plant will use the advanced technology - named TERAX - that converts sewage sludge into energy and useful products. The plant will be built to commercial scale as a demonstration model at Rotorua's wastewater treatment facility.
Construction of the plant is due to start next year.
Rotorua Mayor Kevin Winters said the world first technology would have a major impact on how New Zealand cities and primary industries deal with organic waste in the future.
"It will reduce the amount of organic waste going to landfill and the toxins it creates, and reduce the costs associated with that.
"On top of this, it will be a source of income by generating industrial chemicals that can be used for fertilisers and other biomaterials. In our case, the products produced by TERAX will be consumed inside the wastewater treatment plant to reduce our chemical purchases. It's win-win for the council and the environment."
TERAX was developed by Rotorua-based Crown Research Institute Scion as part of the Waste 2 Gold project and successfully trialled at the council's wastewater facility.
The unique technology, developed in partnership with the council, converts sewage into valuable byproducts, such as chemicals, fertiliser and energy. A pilot plant project has shown it will save the council about $700,000 a year, according to the council's chief executive Peter Guerin.
The technology involves two processes. The first ferments the sludge to reduce its volume, the second uses high pressure, temperature and oxygen to break down solids and release energy and valuable chemicals.
The technology is capable of reducing the volume of landfill by 90 percent and greenhouse gases by up to 70 percent.
If adopted by councils nationwide, it is estimated two million tonnes of biodegradable waste could be treated annually.
Developed by Scion as a means of solving sewage waste, further research is being carried out on how TERAX technology can be applied to other industrial organic waste streams.
Scion chief executive Warren Parker said the TERAX technology was originally developed as a New Zealand solution to a New Zealand problem.
"This commercial-scale demonstration plant in Rotorua will now put TERAX in the spotlight, nationwide and internationally."
The TERAX technology has already attracted the attention of many New Zealand regional authorities, and will be made available to other councils on preferred terms.