Hopes that a stockpile of thousands of used tyres that has made its way from Hamilton to the Taupo district will be only temporary may have been dashed by a government announcement this week.

The Taupo tyres are being stored on land west of Taupo belonging to Otutira Trustee Ltd.

That company's director is Jonathon Spencer, who is also a director of tyre recycling company EcoVersion. The tyres are sited only 2km from the edge of Lake Taupo, raising fears of environmental disaster from fire or run-off.

EcoVersion is planning to build a large-scale tyre processing and recycling facility in Kawerau by the end of the year.

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At a tyre industry summit being held in Auckland on Tuesday, Ministry for the Environment national operations director Mike Mendonca told attendees the government had decided not to proceed with declaring tyres a priority product under the Waste Minimisation Act.

David Vinsen, chief executive of the Imported Motor Vehicle Industry Association, was at the tyre forum and was also a member of the Tyrewise group. He said Mr Mendonca's announcement was greeted with "a stunned silence" followed by "extreme disappointment verging on anger", especially given the impetus for the Tyrewise project had come from the Environment Minister originally.

Mr Vinsen said the market had failed to adequately collect and dispose of used tyres. A declaration of tyres as a priority product would have been the first step towards responsible product stewardship and dealing with the environmental effects - with the cost of extinguishing a tyre fire more than 20 times the cost of disposing of tyres properly.

Some 150,000 tyres, which were previously stored at a Hamilton depot, have been distributed between a quarry in Waihi and Mr Spencer's land near Lake Taupo.

An Environment Ministry spokesperson said that end-of-life tyres, while important, were not currently "a primary candidate" for regulation. 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.

"Overseas experience is that any model is dependent on enduring markets for end-of-life tyres. These markets are not yet mature in New Zealand.

"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."

The Taupo District Plan makes no specific mention of tyre storage.

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