Gisborne residents are no longer able to recycle ice cream containers and yoghurt pots.
Difficulties finding reputable or sustainable recycling markets have led Gisborne District Council's rubbish contractor, Waste Management New Zealand, to stop taking grade three to seven plastics from the kerbside.
This leaves only grades one and two plastics, which are used in soft drink and milk bottles, able to be recycled.
The council stopped taking grade three to seven plastics from commercial customers late last year, due to changes in the global recycling market.
At the end of 2017, China banned the import of 24 grades of waste, including household plastics and mixed paper, the council said.
Since then, New Zealand has been sending plastic waste to South East Asia, but now Malaysia is also banning imports of non-recyclable plastics.
Waste and resource recovery organisation WasteMINZ said the reduction in plastic recycling was a wake up call that we had to do something differently.
Chief executive Paul Evans said if New Zealand was serious about its environmental credentials, product stewardship or extended producer responsibility needed to be introduced. This would ensure manufacturers bear responsibility for disposing of what they produce.
Mr Evans said at the moment producers could make packaging out of anything they like, and pass the cost of recycling on to councils and ratepayers.
Mandatory stewardship schemes were already common around the world, he said.
New Zealand's soft plastic recycling scheme has been stopped until April. It can no longer send plastics to a Melbourne processing facility and local facilities are yet to be launched.
Mr Evans said the government's task force on the issue, set up after China banned the importation of many types of plastic, was due to report back in the next few weeks with recommendations of changes.
Grade three to seven plastics usually made up only about four percent of the weight of a household's recycling, he said.