Environment Minister Amy Adams has announced $468,000 in funding for a facility in Napier that turns construction, demolition and industrial waste into compost.
The funding has been awarded to BioRich from the Government's Waste Minimisation Fund.
Ms Adams said the money will help BioRich expand its facility to accept waste such as bark, wool dust, paper towels, plasterboard and tannery waste.
She said the expanded facility offers an innovative solution to deal with wastes that are usually difficult to process and end up in landfills.
Ms Adams said the project is a win-win for the local economy and environment, as it will reduce pollution while providing nutrients to make Hawke's Bay soils more productive.