Ceredigion County Councils have struck a new deal to process and export residual waste overseas.
The innovative approach will save each council over £350,000 a year – and also create 11 jobs at Pembroke Dock.
It will also benefit the environment at home and abroad.
Under the new contract which the two councils have signed with Potters Waste Management, waste from the two counties that cannot be recycled will be exported to Sweden.
There it will be used in a high efficiency power station to produce both electricity and heat for local Swedish households.
Cllr Huw George, Pembrokeshire’s Cabinet Member for Environmental and Regulatory Services said the new contract would be a massive benefit to the county.
“It will create jobs, make savings and ensure an environmentally improved alternative to landfill for the disposal of our black bag waste,” he said.
The new contract starts on March 1 this year with the first shipment expected to take place at the beginning of June.
Waste collected by the two counties will first be processed at sites at Pembroke Port and in Lampeter to remove certain recyclable materials.
It will then be shredded, baled and wrapped at Pembroke Port to create a Refuse Derived Fuel which can be shipped overseas.
The contract has been let under an innovative framework contract that Pembrokeshire and Ceredigion have created with advice from private sector partners, Eunomia.
Under the framework, any other council can buy waste disposal services from one of seven suppliers, including two UK based and five export solutions.
The framework contract is available to all other councils in Wales and Pembrokeshire County Council has already had interest from a number of other authorities about joining.
Richard Brown, Pembrokeshire Head of Environment and Civil Contingencies, said the contract provided an opportunity for achieving cost savings for the County Council while also creating jobs and boosting recycling rates.
“It provides a flexible, low-risk, value-for-money approach that enables us to divert waste from landfill in the short term, but avoids committing too much waste to incineration in the long term as recycling rates escalate,” he said.
He added that using the excess capacity in Swedish incinerators allowed the waste to be disposed of cheaply, while the use of combined heat and power technology enabled far more energy to be extracted from the waste compared with most UK incinerators, making it both a green and economical solution.
Kevin Hobbs, Short Sea Director at the Port of Milford Haven said. “This is an excellent demonstration of effective collaboration between Pembrokeshire County Council and the Port of Milford Haven, in a scheme that will benefit the county’s ratepayers and create jobs within the Haven Waterway Enterprise Zone too. It’s also a great example of how having a well serviced port in the County can connect the region with new markets far away.”
Debbie Potter, Operations Director of Potters Waste Management said the company was delighted to have won the contract: “This is a new venture for us and we are delighted to be working with Pembrokeshire and Ceredigion County Councils on this innovative scheme to make best user of waste, while also creating employment opportunities,” she said.
“The framework contract gives us the opportunity to work with all other councils in Wales to help them secure savings and meet their financial and performance demands.”
The contract takes place against a background of increased financial and performance pressure on Welsh local authorities over their management of their municipal waste.
Authorities face landfill tax of £80 per tonne, fines for any biodegradable waste that is landfilled above a set allowance, and challenging statutory recycling targets.