Invest in waste to energy

Last updated: 19 September 2022

Waste to energy involves turning waste material into heat, electricity or a fuel.

Waste to energy provides opportunities for long-term investment in Victoria’s waste and resource recovery sector. Victoria encourages investment in waste to energy projects with careful consideration to maximise environmental and economic benefits.

We support waste to energy investments where they meet best practice environment protection requirements, demonstrate social licence with affected communities, and reduce waste to landfill, using the waste hierarchy as an order of preference for how waste is managed. After waste avoidance, reuse and recycling, waste to energy is the final opportunity and option to help us achieve the best possible economic and environmental outcomes from material that would go to landfill.

Waste hierarchy inverted pyramid listing the terms in order of most preferable to least preferable: Avoid, Reduce, Reuse, Recycle, Recover, Dispose

Waste to energy will also play an important role in Victoria’s circular economy by transforming our linear economy mindset of take, use and throw away. It will foster innovation and productivity that invigorates new and existing businesses by delivering more jobs and growth for local, regional, state and global economies.

A circular graphic showing the flow of resources in the following order: Make, Use, Recycle, Manage Source: Recycling Victoria policy

Waste to energy technologies

Waste to energy technologies fall into 2 broad categories:

  1. thermal waste to energy – processes which use heat to turn waste into useful energy resources; examples include: combustion, gasification and pyrolysis
  2. biological processing of organic waste (bioenergy) – processes which use biological processes to convert organic waste into useful energy resources; examples include: anaerobic digestion and fermentation.

Read about investing in bioenergy.

Victorian waste to energy policy

The way waste to energy is managed in Victoria is changing.

The Victorian Government’s waste to energy policy was published in February 2020 as part of Recycling Victoria: A new economy.

The Recycling Victoria policy is a 10-year plan that steps out the systemic change that’s needed to cut waste and boost recycling and reuse of our precious resources.

Read about Victoria’s plan for a circular economy.

Victorian waste to energy framework

In November 2021, the Victorian waste to energy framework was released as part of the Recycling Victoria policy.

The Victorian waste to energy framework recognises the role of waste to energy to divert waste from landfills. It strikes the right balance to focus on waste avoidance and recycling in Victoria's transition to a circular economy.

To manage any risks of over-reliance on waste to energy, the framework places a one million tonne per year cap on the amount of waste that can be heat treated to make energy and outlines how the cap is to work.

The new Recycling Victoria authority will oversee and deliver licenses to businesses wishing to operate a thermal waste to energy facility from mid to late 2022.

Read about Victorian waste to energy policy which outlines how the cap will work.

Processes the cap applies to

For the purposes of the cap, ‘thermal waste to energy’ refers to any thermal process used to:

  • recover energy from waste in the form of heat, which may be converted into steam or electricity
  • produce fuel from waste.

Thermal waste to energy includes, but is not limited to, combustion, gasification and pyrolysis technologies (or any hybrid variant).

The following processes are not considered to be ‘thermal waste to energy’ for the purposes of the cap:

  • Advanced recycling: the conversion to monomer or production of new raw materials (other than fuels) by changing the chemical structure of a material or substance through cracking, gasification or depolymerisation
  • Biological waste to energy technologies, which use microbial action to recover energy from waste. This includes, but is not limited to, anaerobic digestion and fermentation
  • Landfill gas collection and combustion
  • Incineration of waste with no energy recovery
  • Thermal processes that recovery energy from materials that are not waste.

Wastes that can be used for thermal waste to energy

Under the proposed waste to energy framework, waste is divided into 3 categories based on its suitability for use as a thermal waste to energy feedstock:

  • Permitted waste: waste that can be used for thermal waste to energy under a cap licence
  • Banned waste: waste that cannot be used in any thermal waste to energy process
  • Exempt waste: waste that can be used for thermal waste to energy outside of a cap licence.

For more information about how the cap will operate, refer to the Victorian waste to energy framework which details how permitted, banned and exempt wastes are defined under the framework.

A 3 row graphic showing permitted, banned, and exempt thermal feedstock waste sources. Source: Victorian waste to energy framework


  • Victoria’s landfill levy is set to double by 2023. This will encourage diversion of waste from landfill and increased recovery of more resources that can be used to turn into energy
  • Opportunity to process mixed waste from residual Municipal Solid Waste and the Commercial and Industrial sector that cannot be sorted and reprocessed
  • Opportunities to process hard to recycle plastic waste into fuel and valuable resources.

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