New Zealand is "drowning in" paper waste and a processing plant to recycle all the nation’s paper and cardboard is urgently needed to solve the issue.

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That’s according to Auckland Council, which has completed a feasibility study, weighing up options as our reliance on other countries is becoming unsustainable.

Each year, it’s estimated New Zealanders produce 600,00 tonnes of paper and cardboard waste.

Oji Fibre Solutions chief executive Jon Ryder told 1 NEWS his company re-purposes 200,000 tonnes on the North Shore already, but the rest needs to be sent away.

Previously it’s been shipped to China, but they are no longer taking it unless it is of high quality, Mr Ryder said.

Oji Fibre Solutions has had to increase it’s prices to cope.

Auckland City Councillor Penny Hulse said: "Whilst the focus has been on plastic, which is such a huge issue for New Zealand to deal with, there is a real awareness that paper is critical. We're literally drowning in paper.

"We've advocated strongly with our fellow councils around New Zealand that we need to tackle the problem," she said.

From Auckland Council’s study, it’s clear one central processing plant is needed here.

It would need to a large-scale site that deals with all the country’s paper waste, to make it viable.

The study "also highlighted the issue we need to look at the end products that come out," Ms Hulse said.

"We need to make sure that we do have a closed loop solution, that takes the product in, turns it into something useful and uses it effectively so we don’t keep building more and more waste product out the other end.

"It’s not simply recycling paper over and over again

"There's some great work being done looking at compressed paper mixed with other substances to turn into pallets for instance, so we need to find a diverse and financially sustainable long-term solution that works for the whole of New Zealand."

Mr Ryder agreed processing all paper waste here is the ultimate objective.

"We want to be able to deal to our own problems in New Zealand, rather than export them".

Associate Environment Minister Eugenie Sage told 1 NEWS: "There's $40 million in the Provincial Growth Fund for waste projects.

"There has been pressure, on particularly the fibre and paper reclaim and recycle operators, who used to send it overseas. I hope they'll get together and put in an application to the fund.

"It does take a while to get these plants up and running, but what we're seeing is the market working," said Ms Sage.

"There's no free lunch with waste. This is the real cost of dealing with our waste and the market is responding by increasing the charges to take this paper away".