Billions of coffee cups could become paper in Kendal
29 August 2013 Last updated at 17:52 BST
The government wants to drastically reduce the millions of tonnes of rubbish produced in the UK.
A Kendal firm is revolutionising the technology needed to tackle part of the problem - the 2.5 billion coffee cups generated by the big high street chains each year.
Environment correspondent Judy Hobson has been looking round James Cropper PLC's new facility, officially opened by the Queen last month.