A £75 million gasification plant could be built in Teesside following a joint venture between Teesside company Scott Brothers and Devon firm O2N.
The facility would generate 14MW of energy from 160,000 tonnes of household waste with the firms saying it would be the largest of its type in the UK.
Finance discussions are already well advanced, and subject to planning permission it could be up and running by 2015.
Air Products recently announced that it plans to construct a similar facility in the region.
Scott Brothers Group managing director Frank Cooke said: “Often with gasification technology in the UK projects turn out to be long-term and difficult to get off the ground.
“This is an American design. There are more than 20 similar ones in operation around the world, particularly in Scandinavia and Germany. It’s a tried and tested technology.
“There are some in the UK, but none of this size at the moment. We are in well advanced discussions on finance. We are also talking to both national and local waste suppliers.
“The majority of the electricity created could be used by local chemical companies.”
AECOM will design, construct, procure and operate the facility that will be located on an industrial site formerly belonging to ICI.