New Zealand has thrown away around $1.5 billion in potential revenue from fishing by dumping much of its waste at sea, a University of Auckland study claims.

The study, presented to the Environmental Defence Society conference in Auckland, reveals that up to 70 per cent of a caught fish is turned into low value fishmeal, oil or simply wasted.

By contrast Iceland uses 96 per cent of a fish and science is close to achieving up to 100 per cent use.

The Auckland Business School study was compiled by the same people who first exposed the human rights and labour abuses aboard foreign charter fishing boats, Glenn Simmons and Christina Stringer.

Their figures show that last year finfish exports of 199,000 tonnes were worth $778.8 million. It included 59,900 tonnes of fish waste while 59,420 tonnes were dumped at sea.

The authors argue that if the fish waste last year at been dried and exported it would have earned an additional $173.7 million.

"Over the last 10 years, 1.67 million tonnes of fish waste could have earned $1.87 billion, instead of $370 million from fishmeal," the study shows.

The study broke down radical difference between New Zealand and Iceland handling of the wastes.

A fish head makes up 30 per cent of its weight and in New Zealand very little of it is retained, mostly made into fish meal or oil, or dumped. Iceland dries the heads and they are exported to Nigeria.

Little of the liver and roe of fish caught in New Zealand is retained; Icelandic fishing companies utilise all of it.

Thirty two percent of a fish can be made into fillets - but Iceland gets 10 to 15 per cent more fillet by super-chilling the catch at sea. Iceland takes the trimmings of the process to make into fish nuggets - New Zealand dumps them.

The study found the New Zealand fishing industry average EBITDA (earnings before interest, taxes, depreciation and amortisation) margin ratio was less than 10 per cent against the Icelandic industry's 30 per cent.

Iceland achieved higher returns by being transparent, having an auction system for fishing quota and a "collective commitment to innovation".

Iceland has created new industries out of marine by-products.

- © Fairfax NZ News