The government will shovel $124 million from the Covid-19 response and recovery fund into plastic recycling and reprocessing - and will push up its municipal waste levy six-fold by 2025.

Associate Minister for the Environment Eugenie Sage said funding for recycling plants, resource recovery and anaerobic, or oxygen free, digestion facilities will be allocated via the waste minimisation fund.

The Covid funding stimulus, which aims to reduce New Zealand's reliance on sending waste overseas for recycling, could also create upwards of 140 jobs during establishment, with an additional 250 ongoing jobs on a longer-term basis, she said.

The waste levy, the principle funding mechanism for the fund, was set at $10 per tonne when the fund was established in 2008.

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It currently applies to municipal landfills that take household waste – about 45 per cent of the three million tonnes of waste sent to landfill annually - and generates about $36m per year.

From next year, that levy will be gradually increased to $60 per tonne by 2025, and will be extended to apply to construction and demolition landfill from mid-2022.

That will increase the levy returns for the fund to $276m by 2025, of which half will be distributed back to councils to be allocated to waste management and minimisation programmes and the remainder allocated by the Ministry for the Environment.

Stronger incentive

Sage said expanding and increasing the waste levy is one of the "best tools we have to incentivise reduced waste to landfill and prevent valuable resources from being thrown away."

Today she also confirmed funding of $3.1m for a new waste sorting process at Green Gorilla, a privately owned non-landfill-owning waste services provider in Onehunga, Auckland.

Green Gorilla said its new $6.1m commercial and industrial line will initially divert about 15,000 tonnes from landfill, increasing to 40,000 tonnes annually within seven years. Aucklanders produce more than one tonne of rubbish per person every year, of which about 86 per cent is related to non-household waste such as construction and demolition.

The firm's chief executive, Elaine Morgan, said the investment in the new processing line will enable the company to move beyond construction waste, and sort recycling for all commercial businesses.

Sage said the increased investment in waste minimisation and resources recovery infrastructure "will ensure New Zealand emerges from the Covid-19 pandemic with a far better resources recovery and recycling system."

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The levy will also have a "minimal impact on a family's weekly budget, reflected in an increase to council kerbside removal of about 25 cents per week," she said.

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