The Ministry for the Environment has issued a warning about compostable packaging - likening it to single-use plastics.
Composting facilities don't want the plant-based packaging because it devalues their final product and councils don't collect it at the roadside.
The Ministry for the Environment says a cautious approach to compostable products is needed as they are still single use and do not have any nutritional or economic value.
It also has concerns about the possible impacts of compostable products on soils and the food chain and is scoping research to better understand those impacts.
WasteMINZ organic materials group chair Chris Purchas said when a compostable packet was put in a rubbish bin and sent to landfill it decomposed very slowly.
"Compostable products are designed to break down in a composting process that relies on a range of things, but good aeration is key, lots of airflow. If you place something in landfill, the material is compacted and contained and effectively has very little airflow.
"So there's not a lot of sense in taking a compostable product, using it once and then placing it in landfill."
In a statement in 2019, WasteMINZ said composters were "gravely concerned" that a wide range of compostable materials that could devalue compost were appearing on the market.
Purchas said as an industry, commercial composters aimed to create a nutrient rich product that improved soil fertilty so were reluctant to accept packaging that didn't benefit the quality of their compost.
They also worked to remove contamination and it was often challenging to know if items in feedstock were compostable - short of pulling them out to check - as there was no national standard for commercial compostability.
There are 15 facilities that accept compostable packaging in Aotearoa - all with strict acceptance criteria.
Plant-based and compostable packaging is not accepted in kerbside food waste or greenwaste bins.
"It doesn't seem that sensible to claim that something is compostable in a New Zealand context if it's very unlikely that material will actually be picked up and put into a composting process," Purchas said.
"There's limited options for taking a compostable pasta packet, for example, and putting that into a composting process, because most of our processers in New Zealand do not accept that type of material at the moment."
Packaging providers and product suppliers were looking for solutions to single use packaging - but compostable packaging was still single use packaging.
"They bring a whole lot of challenges and problems with them, rather than necessarily providing a solution that solves everything."
Countdown's director of sustainability Kiri Hannifin said the supermarket didn't use compostable packaging in any of its own products.
She said it was confusing for consumers, who often thought they were doing the right thing by recycling them.
"All that does is contaminate the recycling so they are better to go in the landfill and that feels like it's greenwashing because they are meant to be compostable, but there is nowhere for them to go.
"There's also very little nutritional value in terms of the product when it goes into compost, so it is a bit murky.
"It feels so good but there is no end of life solution for them at the moment."
For the Better Good founder Jayden Klinac developed a compostable plant-based water bottle - called the Better Bottle - to provide consumers with a choice other than oil-based plastic bottles.
He ran into trouble finding a commercial facility to process them so developed a collection network and composting facilities to process them, creating a closed loop environment.
Better Bottles contaminated with food were composted, while clean bottles were broken down and turned into 3D printer filament, which could then be recycled again.
He said plant-based products could be composted or recycled - but that relied on having the infrastructure to do so.
"In principle they are recyclable but we don't currently have recycling lines in New Zealand to recycle them so that's why you can't put them in your kerbside recycling bin.
"But that's the same with all plastic polymers, compostable or not, oil-based plastics, like PET and HDPE are recyclable but they can't be recycled together."
Jayden Klinac said there was no one-size-fits-all approach when it came to compostable packaging.
"A circular economy is all about using renewable feedstocks when we can and extending the life of materials as long as possible.
"Picture a perfect world where we did build up an infrastructure that allowed materials to be made from renewable resources, reusable, and then they can be collected and recycled over and over again and then if they get beyond recycled, they can be composted."
He said more work needed to be done on New Zealand's composting and recycling infrastructure to support a circular economy.