"That process is now in jeopardy due to the plant not being able to handle paper with broken glass sprinkled throughout.
"Well over 100 jobs could be in jeopardy if this plant has to close - the result will be that the paper will be exported to China for processing.
"The mill relies on a good supply of clean paper from the North Shore and Waitakere to keep their plant in operation."
Mr Wood said he would lobby councillors to listen to the communities they served when making a final decision on the plan, after the public consultation from November 15 to January 31.
Rodney residents are likely to change to a recycle bin from July 2013 and further moves to a standard kerbside collection for Auckland and larger recycling bins are flagged for 2015.
Since 2008, residents of the former Auckland City and Manukau City areas have had "co-mingled" recycle wheelie bins. The waste is taken to the $22 million Visy materials recovery facility in Onehunga.
Ironically, as Auckland Council considers a "co-mingled" collection, Carter Holt Harvey said it is working with the city councils of Wellington and Dunedin to get a source of waste paper that is uncontaminated by glass shards. It needs 100,000 tonnes of waste paper a year.
The Fullcircle company collects the mill's paper from around the country including Waitakere and North Shore. Fullcircle general manager James Flexman said the southern cities have a bin for glass only which suits the mill and the glass recycler O-I in its Penrose furnace.
Glass particles stick to the waste paper and does not wash out during the process of turning to reels of cardboard. Penrose was an older mill with screening systems which were built for a source which was separated from other waste on the street.
Industry sources say that contaminated paper is shipped to China or Indonesia.
The Penrose mill was built in 1982 for NZ Forest Products when United States cities were installing similar mills to turn their waste paper into cardboard packaging. Since opening, its production has grown from 20,000 tonnes to 80,000 tonnes of finished cardboard product which is used in packaging.