ResourceCo head of sustainable energy, Ben Sawley, said the plant would reduce reliance on fossil fuels.

"It will replace over 100,000 tonnes of coal usage per year [by the cement industry] and take the equivalent of 20,000 cars annually off the road in terms of greenhouse gas emissions," Mr Sawley said.

"Everything we process would have otherwise ended up in landfill."

Over the lifetime of the facility, it is forecast to reduce carbon emissions by about 4 million tonnes.

The plant's development was supported by $30 million in funding from the Clean Energy Finance Corporation, with part of this funding to also go to a second additional factory at a location yet to be identified.

The NSW government provided $5 million in funding.

"The priority in managing our waste must be to reduce the amount of waste we produce in the first place, with what remains we need to invest in proven technologies to repurpose it, including as alternative fuels,” CEFC chief executive Ian Learmonth said.

“By turning waste into PEF, this facility is showing how industrial processes can reduce their reliance on fossil fuels. We can also reduce the amount of waste materials going into landfill, an important factor in cutting our national gas emissions.”

Federal Environment and Energy Minister Josh Frydenberg said the facility would help reduce NSW’s garbage levels.

“Conversion of non-recyclable waste into PEF is a win for the environment as it has the potential to reduce Australia’s need for new landfill,” Mr Frydenberg said.

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“The Wetherill Park facility is the largest of its kind in Australia. It can process around 250,000 tonnes of waste power year to produce PEF."

CEFC’s head of bioenergy and energy from waste, Henry Anning, said Australia had the opportunity to become a world leader in waste-to-fuel technology.

“With Australia’s waste sector facing considerable disruption, now is the time to adopt new ways of doing business,” Mr Anning said.

“With the right investment in proven technologies, companies can turn our urban and industrial waste into new energy sources, creating an important revenue stream while also reducing landfill gas emissions.

“There is strong potential for sustainable energy and resource recovery to play an increasing role to play an increasing role among waste management options.”

Electricity generator EnergyAustralia is currently trialling a similar project repurposing waste alongside its Mt Piper coal-fired power plant outside Lithgow in NSW.

EnergyAustralia’s energy recovery process can generate about 27 megawatts, or power to about 40,000 homes, solely through using garbage as a fuel source.