A building made entirely from commercial waste once destined for rubbish tips has been shortlisted for an architecture award.

Bradford online waste exchange Why Waste, which marks its first anniversary next month, has already diverted more than 1,000 tonnes of waste from landfill sites.

And to show just what can be achieved by recycling, the team commissioned a group of students to design a building made from scrap purchased from the exchange.

The building's roof was put together with 900 carpet tiles, it has blocks of bailed polythene bags and plywood for walls and a chandelier made from cylindrical Perspex off-cuts.

Known as the Space of Waste building, it has been nominated for the Architects' Journal Small Projects Award, with winners set to be announced in March.

Dan McTiernan, of Why Waste, said: "Space of Waste clearly demonstrates that something beautiful can be made from what most of us perceive as rubbish. We hope that this will make other people aware that materials otherwise destined for landfill can be used to construct buildings which are low in cost and environmental impact, and high in aesthetic appeal."

More than 2,500 businesses throughout Yorkshire and Humberside have signed up to the recycling initiative, which was thought up by Bradford Environmental Action Trust (BEAT).

Since it launched last February, the Why Waste website has had 18,500 hits.

Mr McTiernan said: "It's been a good start-up year. Our plans for the future include income generation spin-offs from the website using waste materials to create designed products such as furniture and maybe even garden buildings. One of the main ideas is to get people emotionally engaged with the act of exchanging their waste." Seabrook Crisps, in Duncombe Street, Girlington, Bradford, signed up to the waste exchange and has since recycled 5,000 litres of vegetable oil to bio-diesel manufacturers Bradford Bio Fuels.

Tommy Brown, health and safety officer at Seabrook, said: "We do our best to recycle and help the environment and that's why we dealt with Why Waste. It's reduced our waste and saved us a substantial amount of money. The oil would have been treated at our water treatment plant on site, so it saves us water costs."

Another firm to benefit has been Burgess Ford dealership in Hannover Street, Keighley. Half a ton of waste plastic from its vans was recycled in Halifax through the exchange.

Managing director Chris Gibson said: "We needed to dispose of these plastic panels and we hadn't got any idea where to go.

"I looked on the Why Waste website and they put us in touch with a couple of companies. It has saved us on disposal costs and provided a firm in Halifax with raw material which it uses to make plastic garden furniture. I wouldn't have found them if it wasn't for Why Waste and I would use the exchange again."

The Space of Waste building, created by postgraduate architecture students at the University of Sheffield, has now been opened to the public in Sheffield.

Following the awards ceremony, the portable structure will feature in a six-week exhibition at the Building Centre, in London, before it is taken on a tour to cities throughout the country to raise awareness of recycling.