The City of Sydney has struck a deal to significantly reduce the amount of household waste buried in landfill sites in the outer suburbs.

The city will instead send all 40,000 tonnes of household garbage it collects to an advanced waste treatment facility that separates recyclable materials, creates compost and generates electricity.

“In just five years time, the main landfill sites at Eastern Creek and Lucas Heights will be full and the rest of Sydney’s waste will be hauled 250 kilometres south-west of Sydney,” Lord Mayor Clover Moore said.

“Rubbish tips also produce huge amounts of methane, a long-term greenhouse gas pollutant with 25 times the global warming potential of carbon dioxide. The noxious gas leaks out over decades as food and other organic material rot.”

Moore said that if no action was taken, greenhouse gas emissions from landfill in Australia was projected to double within a decade.

“Our new deal, combined with existing kerbside recycling, means we will now meet our 2014 target of diverting two-thirds of residential waste from landfill — three years ahead of schedule.”

Moore said the facility would produce low-grade compost and a small amount of electricity, with glass, paper and metals recovered.

A small amount of remaining waste would still go to landfill.

“By processing all our city’s domestic waste this way, our greenhouse gas emissions will be annually reduced by an estimated 6000 tonnes, mostly from methane, equal to removing around 1400 vehicles from the road,” Moore said.

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