Authorities are becoming increasingly concerned about the air quality in Arrowtown, which has been shown to be the worst of any New Zealand town.
The Central Otago hamlet has breached air standards 29 times out of the past 30 days, giving it the worst air quality.
Smoke from wood and coal fires is being trapped by cold air as residents resist taking up government subsidies to replace fires with clean air alternatives.
Otago Regional Council air quality manager Jeff Donaldson says only 39 homes have taken up subsidies out of the more than 200 that are eligible.
Mr Donaldson says the reluctance to upgrade old fires is a major concern because the health consequences of breathing smog are well-known.
The regional council will hold a special expo in September to try and convince residents ahead of the 2013 Government Clean Air Act deadline.
The deadline aims to bring the levels of particulate matter to within voluntary World Health Organisation guidelines.