Foy's insistence that its plan would meet air quality standards was based on the plastics coming into the plant being free of contaminants, the authority said, pointing to the danger of contaminants creating dioxins and furans and emitting them and heavy metals in exhaust gases.

"In the NSW EPA's experience, it is difficult to ensure contamination-free feedstock from mixed waste sources," regional director Gary Whytcross wrote in a submission to the ACT health panel considering Foy's application.

"Exclusion of PTFE and PVC plastics and heavy metal contamination from the feedstock waste may prove to be very difficult. Inclusion of even small amounts of such contaminants could call into question the conclusions drawn in the [environmental impact statement] and health risk assessment.

"With the high toxicity of these pollutants and the proximity of surrounding residential areas, it would be prudent to take a precautionary approach to this assessment."

NSW's intervention is a body blow to the Foy proposal, which is already weighed down under significant opposition from residents in the surrounding Tuggeranong suburbs.

Foy wants to build its factory at Hume, and has already bought a block of land from the government for the project. It plans to convert 200 tonnes of plastic a day into diesel and petrol. Foy says its project uses plastics that are not being recycled, a claim disputed by critics.

A bid by Foy to build a similar plant in NSW was rejected last year by the NSW Environmental Protection Authority because of the lack of data from any existing facilities, given the technology is new.

But Foy managing director Stuart Clark has hit back the NSW authorities, saying "they probably should have read the documentation on the ACT website" which addressed the question of contaminants in feedstock.

"This information has not been provided directly to the NSW EPA because ... we are not as well progressed in NSW as we are in ACT. In due course we expect to work through the NSW processes also and will allay all their concerns in a factual way," he said.

Foy had four levels of control, the best available:

Fuel and waste water was also tested before release.

"These four levels of multi-faceted, prevention, detection, rejection, destruction, inspection, testing and supplier quality assurance will reduce the residual risk of contaminants entering the pyrolysis process through the feedstock and ensure the risks of harmful emissions remain at the lowest possible levels," Mr Clark said.

"As we have said a number of times, our goal is to be a good neighbour. We accept that not everyone believes that, but it remains the truth."

In his submission to the ACT, Mr Whytcross said the NSW authority was still working with Foy on the NSW plans.

But the onus was on the proponent to demonstrate that its factory complied with NSW policies and that meant using proven technologies and providing data from comparable facilities. Untested technologies could not be considered under the NSW policy. Trial or demonstration plants were not good enough to be used as comparable reference facilities, he said.

Mr Whytcross said the Hume site was about 500 metres from the NSW border, with plans for residential development in South Tralee and Jerrabomberra. Foy's work on emissions treated Macarthur, Chisholm and Gilmore, about 1.2 km away, as the closest homes, but homes in Jerrabomberra would be about 600 metres from the site. The panel should treat those residents as the closest, he said.

"The NSW EPA wishes to ensure the panel appropriately considers the potential impact on the future NSW residents in this area," he said.

The Queanbeyan-Palerang Council has also raised concerns about the safety of the proposed factory.