Incinerating household waste using "best-practice" European combustion technology meets the criteria for investment by Australia's national clean energy bank.

Key points: Clean Energy Finance Corporation confirms incineration is eligible for investment

Clean Energy Finance Corporation confirms incineration is eligible for investment Energy and Environment Minister says recycling is still a "priority"

Energy and Environment Minister says recycling is still a "priority" Critics claim encouraging waste will lead to greater consumption

The Clean Energy Finance Corporation (CEFC) — which has never invested in an incineration project before — has indicated it is open to financing such schemes.

A spokeswoman for CEFC confirmed to the ABC that incineration was eligible for investment.

"There are modern energy from waste projects which employ best-practice combustion technology operating in Europe today that would potentially meet the CEFC's criteria for investment, if deployed in Australia," she said.

The confirmation of eligibility follows a letter sent by Energy and Environment Minister Josh Frydenberg to CEFC in April.

"I would like to encourage the board to consider further prioritising waste-to-energy projects, particularly those involving the avoidance of landfill," the letter, sent in response to China's decision to restrict importation of recyclable waste, reads.

Despite this letter, Mr Frydenberg told the ABC recycling of waste remained a "priority".

"While the Turnbull Government has asked [the Australian Renewable Energy Agency] and the CEFC to further explore opportunities to advance waste-to-energy projects, the reduction, reuse and recycling of waste is a priority," he said.

Burning tyres and plastics

CEFC invests taxpayer funds in low-emission and renewable-energy projects that might not otherwise be able to secure finance.

Projects eligible for CEFC investment must use clean-energy technologies, as determined by its board, and must be mainly Australian-based.

It is not clear whether the CEFC is currently assessing any incineration projects.

No projects that involve purely non-organic incineration are currently being considered by CEFC, according to an answer to a Senate question published this week.

"However, the CEFC receives a range of approaches from potential project proponents across a range of industry sectors and clean-energy technologies, and this would include projects from the non-organic waste streams such as tyres and plastics," the answer reads.

The CEFC does not comment on proposals which do not receive investment.

Sweden incinerates about 50 per cent of its waste, using the energy produced to power homes.

Waste-to-energy funding

Greens senator Peter Whish-Wilson said incineration as a response to recycling challenges was "surrender".

"Not only will it dramatically undermine public support and cooperation with domestic household recycling but it will result in governments at all levels giving up on seeking solutions to develop a circular economy," he said.

"Incineration is what households used to do to dispose of their household rubbish in the 1950s and 60s, it is not a solution to the current problems."

Rachael Wakefield-Rann, research consultant at the Institute for Sustainable Futures at UTS, said the encouragement of indiscriminate waste disposal would undermine decades of recycling education and lead to greater consumption.

"If you can just chuck everything into the same bin, it has a big influence on consumption behaviour, and that undermines the imperative that we should consume less," she said.

Incineration is just one of a range of waste-to-energy processes.

Mr Frydenberg emphasised financial support had already been given to many different waste-to-energy projects.

"To date, ARENA has contributed $58 million in total to 27 waste-to-energy and bioenergy projects and the CEFC has invested more than $170 million in projects worth more than $400 million," he said.

The largest waste-to-energy projects that have received CEFC investment so far include $90 million for a range of projects undertaken by Cleanaway and $30 million for ResourceCo to transform non-recyclable waste into fuel.