Fish heads and chicken fat are being turned into electricity by Britain's largest retailers, including Walmart Stores that ship food waste to power plants to reduce garbage-removal fees.
Tesco, Britain's biggest supermarket chain, along with Marks & Spencer Group, John Lewis Partnership's Waitrose, William Morrison Supermarkets and J Sainsbury are testing how meat and fish, cooking oils and leftover food can lower energy bills and landfill costs when they're moved to plants for converting into power.
Companies around the world have invested about $18.2 billion in waste-to-energy assets in the past five years, according to Bloomberg New Energy Finance.
Waste Management, North America's biggest trash hauler, purchased stakes in eight companies developing systems to convert rubbish into electricity, fuel and chemicals. In Brazil, cities are building incinerators that burn trash to produce electricity.
Bioenergy can provide at least 8 percent of Britain's demand by 2020, valued at about $13 billion at today's oil prices, the government forecasts. Supermarkets are motivated by a landfill tax that makes it increasingly costly to bury waste. The tax starting in April was 64 pounds ($98) a ton and is set to increase by 8 pounds a year.
"Diverting food waste from landfill to anaerobic digestion is a no-brainer for the supermarkets -- landfill charges and energy costs are only getting more expensive," said Niamh McSherry, a food retail analyst at Berenberg Bank.
Anaerobic digestion breaks down organic material in the absence of oxygen to make a biogas that can be burned to generate power. Electricity from this process currently costs about $142.80 a megawatt-hour, according to data from the London-based researcher Bloomberg New Energy Finance. This compares to coal-fired power that costs $78 a megawatt-hour.
Refineries and airlines also are pioneering energy-from- garbage projects. Neste Oil is making diesel for cars and trucks using fat from gutting pangasius, an Asian catfish. Airlines, including Air France-KLM Group and Deutsche Lufthansa, have started flying planes on used cooking oil.
Walmart's Asda unit sends old lamb chops and moldy bread to bioenergy sites. About 2,500 homes are powered by Sainsbury's unsold meals and rotting vegetables. Waitrose chickens are kept warm in solar huts as Tesco examines how fat from rotisseries can produce electricity.
"Anaerobic digestion saves the food retailers money and allows them to demonstrate their 'green credentials' to the government and consumers," McSherry said in London.