Seven fire crews attended the scene as black smoke billowed from the plant.
The fire is believed to have started in the trickling filters of the plant.
Fire and Emergency NZ said that residents who live downwind from the fire should close their doors and windows.
Others are being asked to stay away from the area.
Canterbury District Health board issued a statement warning that the smoke from the fire could be dangerous for those who have pre-existing heart or lung problems.
It said these people could experience coughing, shortness of breath, or nose or throat irritation.
Anyone experiencing health issues from the fire should contact their General Practitioner, the DHB said.
The plant is continuing to operate in a limited capacity.
