Plans are being drawn up to build a multi million pound waste facility in the valleys.
Torfaen, Blaenau Gwent and Caerphilly councils have joined forces to look at the options to stop food and garden waste (organic) from being landfilled and meet tough recycling targets.
The best site for the facility, which could cost up to £7 million, will be chosen within the boundaries of one of the county boroughs.
Publicly-owned land will be earmarked for development, although private sites elsewhere could also be in the running.
Three technologies are being assessed - anaerobic digestion, in-vessel composting and windrow composting - to treat organic waste from around 140,000 homes in the three county boroughs.
The new facility needs to be built and operational by 2012 to help meet a 70 per cent recycling and composting target 13 years later.
Anaerobic digestion (AD) is the preferred option of the Welsh Assembly which produces a compost-like material and biogas as a by-product. If an AD plant is built in the valleys it would secure Assembly funding and generate electricity for up to 1,000 homes.
The three councils, who will procure a facility under the name Heads of the Valleys Waste Programme, is now waiting for the Assembly's views on its draft outline business case before deciding its next steps.
Project manager Frances Williams said: "We must find alternative options to reduce the amount of waste sent to landfill or face huge fines which will have to be passed on to the taxpayer. We are also committed to finding more sustainable ways of working.
"As a result of these challenges, the Welsh Assembly has encouraged authorities to form partnerships to work together to deliver facilities.
"We will communicate any future decisions with our residents so they fully understand the reasons for the facility and its eventual location."
Torfaen and Blaenau Gwent are looking at how to deal with food and garden waste before considering what to do with the rubbish left- residual waste- after all composting and recycling has been carried out. Both Councils already have food and green kerbside recycling schemes.
Caerphilly Council, which is introducing a kerbside food recycling scheme later this year, is also part of Prosiect Gwyrdd along with Monmouthshire, Newport, Cardiff and the Vale of Glamorgan. This partnership is already looking at options for residual waste.