An ambitious plan to build one of Australia's first waste-to-energy incineration plants in Canberra's south is facing hurdles, with air quality concerns and questions around receiving tariffs for feeding excess energy into the grid.

What is a waste-to-energy facility? Waste-to-energy facilities create electricity from waste that would otherwise go to landfill

Waste-to-energy facilities create electricity from waste that would otherwise go to landfill Using thermal technology, the waste is turned into steam that powers turbines

Using thermal technology, the waste is turned into steam that powers turbines The technology is already being used in Europe and Asia

Capital Recycling Solutions (CRS) is proposing to build a $200 million waste-to-energy plant in Fyshwick, burning waste the ACT currently sends to landfill, and using it to generate power.

The project, to which ActewAGL is a partner, intends to produce up to 30 megawatts of electricity, enough to power tens of thousands of homes.

The plant would sort all of the ACT's red-bin waste, diverting recyclables out of the system, and incinerating the waste that remains.

It would also burn waste shipped in from New South Wales through rail lines adjoining the site.

CRS argues it will end the ACT's reliance on the Mugga Lane landfill site, provide a consistent source of renewable energy, and reduce greenhouse gas emissions.

Waste-to-energy is a relatively new concept in Australia, with three similar plants approved but not yet built in Western Australia, and another struggling to gain approval in western Sydney.

The plants are common overseas, particularly in Europe, and while some waste management experts see the arrival of waste-to-energy plants in Australia as inevitable, the CRS proposal could face significant hurdles.

The first is community opposition primarily driven by air quality concerns, but CRS is confident those can be overcome through community consultation.

The second is its plan to seek a feed-in tariff from the ACT Government "in the range of the previously awarded large-scale renewable auctions".

The Government is already giving indications that might be difficult.

'No need' for extra energy: Government

ActewAGL's director of marketing and corporate affairs, Paul Walshe, said he had an idea of what sort of tariff to expect.

"We'll put in a proposal for a feed-in tariff, similar to what the Government have done with the energy auctions — the renewable energy auctions," he said.

"We'll be looking at something similar."

But in a statement to the ABC, Climate Change and Sustainability Minister Shane Rattenbury cast some doubt on whether such a feed-in tariff would be available.

"The ACT Government has no need to award new feed-in-tariff entitlements at this time, as we have already contracted for 100 per cent of our electricity to be supplied from renewable energy sources of wind and solar by 2020."

Mr Walshe said the project was not fully reliant on the feed-in tariff, and other options could be explored.

"It is still viable," he said.

"We would look at other options that we could explore in relation to the electricity and how we could sell it into the market."

Air quality a top concern

More than 200 people attended a community meeting with CRS during the week, organised by the Inner South Canberra Community Council.

Council chair Marea Fatseas said air quality dominated the debate.

"The primary concerns that people had were about human health and safety," she said.

"Especially the impact of the 32-metre smokestacks, and whether they would have dioxins and other particulates that would cause problems for workers in Fyshwick, as well as local residents."

Similar proposals are in the works in NSW and WA. ( Supplied: The Next Generation )

Unions ACT secretary Alex White said his worry was that the ACT's regulatory framework was not up to handling this particular kind of heavy industry.

"The laws that would protect the air quality and prevent workers and the community from being poisoned from emissions are woefully inadequate in the ACT," he said.

But CRS director Adam Perry said air quality was the company's first priority, and the plant would will meet the strictest standards.

He said he remained confident attitudes could be changed.

"Almost half of the total investment is in the flue gas cleaning system to capture emissions, to ensure that the community is safe from emissions," he said.

Mr Perry said CRS's best case was made out by the prevalence of waste-to-energy plants around the world — many near the centre of major cities.

"What's easy for us is we can point to so many plants that are identical around the world, and show the community — this is exactly what we're proposing," he said.

An environmental impact statement for the project is expected later this year.