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Listed biotech company Genesis Research and Development says its subsidiary, Biojoule, has produced an environmentally friendly plastic as a byproduct of making ethanol fuel.
Stephen Hall, the chief executive of Genesis, Biojoule's majority shareholder, said natural lignin - extracted from the shrubby willow used for ethanol - had been made into polyurethane foam.
Polyurethane has applications in a wide range of industries but is normally derived from petrochemicals.
"We can produce it economically and compete with petrochemically derived polyurethane but without any of the carbon footprint that comes from using petrochemical sources," he said.
Testing in Japan found the polyurethane product exhibited excellent results for thermal conductivity and density, and a potential customer was interested in buying "commercial" quantities, Hall said.
"The price they were interested in buying it at is well within our range of what we hoped to achieve.
"If we can sell these products for these sort of market prices then the whole process is certainly very economic."
Hall said lignin could also be converted into other types of plastics.
"A lot of people are chasing biofuel - principally ethanol - but our process allows other valuable products to be produced as well so it really improves the economics."
An important dimension of using the rapidly growing hard wood was that, unlike corn, it did not displace food, Hall said.
"People who are using corn to produce ethanol are really pushing up the price of corn for many people, which has an impact on food and personal economics."
He said the shrubby willow crop seemed a good prospect for an economic use of much of the land around Lake Taupo that would not result in the run-off of nitrates into the lake.
