David Vinsen, chief executive of the Imported Motor Vehicle Industry Association, earlier this month said industry groups were "stunned" and very disappointed about the U-Turn.
But the Environment Ministry told the Bay of Plenty Times the ministry had commissioned further analysis to "help determine if regulation was needed or if there were other options that might be equally or more effective long term".
"Disposal of tyres to municipal landfills is still considered a safe disposal option while markets emerge. Under the Resource Management Act, the regional and district plans determine which activities are permitted, including the storage of end-of-life tyres."
When the initiative was launched, Dr Smith said the Government would provide $133,000 to the Product Stewardship Foundation to explore recycling options for used tyres.
"This funding will be used by the Foundation to work with tyre industry importers and retailers to identify the best way for New Zealand to recycle and re-use our used tyres," Dr Smith said at the time.