The Rotorua District Council and Crown Research Institute Scion are trialling a scheme to turn human faeces into vinegar and reduce waste going into landfill.
A $3 million plant has been officially opened at the Rotorua Wastewater Treatment Plant to conduct tests.
The design is thought to be a world first and it is hoped it will be used throughout New Zealand if it proves successful.
Scion says the plant takes human sewage and burns it in water to create vinegar, which can then be turned into plastics, made into fuel or used to generate electricity.
Group manager Trevor Stuthridge says work is focused on designing a full scale commercial plant, which could cost up to $15 million.