A major New Zealand recycler is considering legal action against councils who he says are failing to pitch in to deal with a mounting pile of rubbish.

Photo: 123rf

Smart Environmental is the country's largest privately owned recycling company and process the recyclables for about 15 councils around the country.

But its owner Grahame Christian said since China's ban on accepting certain materials, he has been forced to sell tonnes of rubbish for a fraction of what its worth.

China previously took more than half of the world's waste exports but earlier this year placed strict restrictions on what and how much it will accept.

Mr Christian said the councils were leaving him to carry the can, and he would be better off not accepting any paper or plastic from local councils.

"This is costing us millions of dollars and, sadly, very few of our client councils throughout New Zealand want to come and help us."

He said some other companies were dumping recycling straight into landfill because they were not contractually bound to adhere to best practice.

The company's Thames plant was badly damaged by fire a few months ago and the mounting stocks of paper, cardboard and plastic pose a new fire hazard, so Mr Christian said it was being sold for "peanuts".

The price of a plastic milk bottle has fallen by about 40 percent in the past six months but, even worse than that, stocks of heavy paper and cardboard were proving so difficult that companies wanted Mr Christian to pay them.

"Somebody came to us the other day and said they'd give us [a quote of] $30 a tonne. That's not how it's supposed to be."

Mr Christian said he was frustrated with the lack of help from councils who used him for a vital service.

He said he did not want to take legal action against them but he may be left with no choice.

"Contractually, they're actually bound to do that, they just don't want to do it. Councils don't have the budget, it's not in their forecast. Well, guess what? It's not in ours either."

Local Government New Zealand president Dave Cull said it was a tough time for all players involved, including the councils.

"I have sympathy for the whole of the supply chain, whether it's councils, whether it's communities or whether it's recyclers," he said.

"We're all facing the challenge of what to do about it now that the option of just unloading it on someone else's country has been taken away."

Mr Cull said whether councils were obligated to help struggling recyclers with their financial shortfalls depended on their contracts.

Associate Environment Minister Eugenie Sage encouraged councils to engage with their recycling contractors.

"I would hope that councils are working constructively with their contractors and the sector to look at - what are the solutions when there is this pressure in responding to China and having that slump in global commodity prices."

She said the impacts of the China ban had been greater than anticipated and the government had set up a task force to try and come up with solutions to the mounting piles of recycling.

"It has definitely put pressure on some of the recycling businesses, that's why the task force is working with the sector, working with councils. And I think councils are facing some of those challenges as well."

Ms Sage said the government's goal of zero waste going to landfill by 2050 needed more options for recovering recyclables and re-processing them here in New Zealand.