Food waste weighing thousands of tons will be converted into methane gas and used to generate electricity providing heat and light for J Sainsbury supermarkets from next year.

Lawrence Christensen, non-executive chair with responsibility for the environment, said that from 2009 Sainsbury's intends to become the first leading British retailer not to send any waste to landfill sites.

At present, the group sends 60,000 tons of food waste to landfill every year from its 800 stores. Under the new scheme, this will all be taken to anaerobic digester plants and converted into methane gas, which will be used to generate power.

Some will be composted for use as fertiliser and, in a few cases, turned into pet food, Mr Christensen said. Sainsbury's also plans to recycle all of its 20,000 tons of non-food waste, including metal, plastic and paper packaging.

Most of the waste produced by the group's supermarkets is compacted on site and put in skips, which are collected and driven to landfill sites. But Mr Christensen says all this will change when the new waste processing system is introduced across the country.

It will be based on a pilot project under way in Northamptonshire involving 38 Sainsbury's stores, where food waste that has passed its best before date is sent to a plant near Bedford for anaerobic digestion.

Biodegradable material is placed into a giant sealed unit and broken down by micro-organisms to produce a nutrient-rich solid that can be used as fertiliser, as well as methane that can be used to generate electricity.

“This is the process we are now rolling out across the UK,” Mr Christensen said, adding that by 2010, Sainsbury's planned to send all of its organic waste to a network of five regional anaerobic digestor plants.

He said that the group was in talks with various partners about helping to develop new anaerobic digestor plants, each of which costs up to £8million to build. Only a handful of sites in Britain have the capacity to deal with the volume of food waste produced by Sainsbury's.

Once operational, the nationwide scheme will generate up to 30 megawatts of electricity - enough to power a town of 20,000 people. This will supply a significant proportion of the retailer's total power needs.

Food waste from Sainsbury's supermarkets will be first in line for the new programme, with waste from its network of smaller convenience stores due to follow later.

Mr Christensen said that at present Sainsbury's spends £9 million a year on waste disposal, but this was set to rise sharply with the arrival of increasingly steep taxes on waste sent to landfill. The landfill tax, which stands at £30 a ton, is set to rise to £38 next year and to £46 in 2010.

The tax for landfilling 60,000 tons of food waste would increase from £1.8million to nearly £2.8 million by 2010. Sainsbury's declined to comment on how much it plans to spend on the new programme, but Mr Christensen insisted that it would be cost-effective.He said that as well as creating environmental benefits, the scheme would drive efficiency savings.

For example, it would do away with the need for in-store compactors, skips and waste-carrying lorries. Instead, all of the food waste will be sent back to Sainsbury's depots using delivery trucks before being sent to the anaerobic digestor plant.

A Dutch retailer, Albert Heijn, is conducting a similar programme in the Netherlands.

Mr Christensen added that some food that has passed its sell-by date but not its best-before date is given by Sainsbury's to charity.

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