Resene Paints has won $1 million of research and development services to create a world-first sustainable paint.

Resene is the inaugural winner of What's Your Problem New Zealand?, a competition set up by the Crown Research Institute Industrial Research. Resene won with a project to develop a waterborne paint that is based on resins made of 80 per cent sustainable ingredients.

Technical manager Danusia Wypych said the company had scoured the market and could not find a similar product.

Existing environmentally friendly paints contained only 30 to 40 per cent sustainable ingredients. "We had a clear idea of what we wanted. More than anything, we knew where the gap in the market was."

Resene did not have the resources to develop the product alone, and so entered the competition.

The $1 million worth of R&D services will enable Resene to run an 18-month project with Industrial Research to the point of producing some early commercial products. "It's a really significant prize."

Wypych said waterborne paints used acrylic as a resin, which was based on oil and gas products. The possible replacement was a closely guarded secret but it would be renewable, non-cropping (it would not compete with food crops for space) and was likely to come from existing industrial waste streams.

Domestically Resene envisaged the new product becoming its standard offering. "We'd still be offering quality interior paint - it would now just happen to also be sustainable," Wypych said.

Overseas it was likely to be a niche product, but with nine billion litres of interior paint sold worldwide each year even 5 per cent of the market would be a significant volume.

Industrial Research chief executive Shaun Coffey said its criteria for a winner was a project that met its aims of supporting economic development, new products and improvements in productivity.

"This particular project has the prospect of contributing both to domestic market improvement and also export earnings."

One of the main reasons the CRI had run the competition was to get industry thinking about how New Zealand could improve its competitiveness and market penetration as the global economy picked up.

He said aside from the Resene research, other projects were under negotiation as a result of the process.