Up to three million used tyres are being diverted away from landfills and used to fire up the Golden Bay Cement works in Whangārei.
The Ministry for the Environment part funded the $25 million project with a grant of $16 million awarded through its Waste Minimisation Fund to Fletcher Building, which operates Golden Bay Cement.
The project opened at the Portland cement works on Tuesday and Fletcher Building said it means up to three million used tyres won't be going to landfill each year to instead be used in cement manufacturing.
The significant upgrade to New Zealand's only end-to-end cement plant, was officially opened by Environment Minister David Parker.
"This innovative project is a win-win-win for the environment. It reduces a significant waste problem, reuses a valuable resource, and reduces carbon emissions by about 13,000 tonnes a year," Parker said.