Now Canberra business owners say parents are flocking to buy modern cloth nappies - not for the environment - but their wallets.

An inquiry has recommended the government encourage Canberrans to use eco-nappies and menstrual cups to reduce waste.

Queanbeyan mother-of-two Aami Mills started reusable nappy brand Mimi & Co in 2020.

She said she has been surprised at the demand for the products in the last year.

"When we first started in 2020, it was mainly environmental, but in the last six months or so since interest rates are starting to rise, a lot of families are making the switch because they can't afford disposable nappies," Ms Mills said.

"People were very conscious about making the decision a couple of years ago, but a lot of parents are [buying] them out of necessity.

"For some people they do [choose] cloth nappies because of the aesthetics of it."

Modern cloth nappies are not terry-towels, but resemble disposable nappies with washable inserts. They don't usually need to be soaked.

A pack of 72 disposable nappies advertised on Woolworths online cost up to $39, costing the same as a Mimi & Co one-size-fits all modern nappy with two inserts.

Plastic and polymer contents in products like nappies do not disintegrate easily and remain in landfill for years.

The absorbed liquids can leak and contaminate the environment.

Every year, about 1.5 billion nappies end up in Australian landfill, according to Kimberly-Clark Australia. This makes up 4.4 per cent of all landfill.

Mother-of-two Olga Imbriano did not use disposable nappies until she started selling them at her Cooleman Court shop, B Eco Family. She also sells reusable wipes.

"My older one is 16 and I did not use disposable because back then there were only a few people doing it. It was more for hippies," she said.

"What helped me the most was advice from my friend, when she said you can do it part-time.

"Part-time use is very valid, and literally every nappy counts [towards] less nappies in the landfill."

There was a thriving in-person and online community of Canberra parents using cloth nappies, Ms Mills said.

"A lot of it is to do with troubleshooting, it's a little but of a learning curve, [and] getting advice on the washing or the way the nappy is fitting on their baby," she said.

The ACT government conducted an inquiry into absorbent hygiene products, such as disposable nappies, pads, tampons, incontinence pads and wet wipes.

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The inquiry recommends the government collaborate with childcare centres, offer laundering services, establish a cloth nappy library and offer rebates.

They also advised the government offer re-usable period products in schools, trial disposable nappy kerbside collection and recycling, and ensure the new composable facility can deal with nappies.

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