The company behind a proposal to build a rubbish-burning power plant in Canberra's east will halve its capacity in order to get the project over the line.
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Capital Recycling Solutions says it will not import any waste from Sydney to "feed the furnace" and has reduced its proposal from a 30 mega-watt plant to a 15 mega-watt plant.
It will also separate its plans into two different environmental impact statements, with its proposal to divert 300,000 tonnes of rubbish from Mugga Lane per year to the Woodlawn bioreactor at Tarago via the rail link taking precedence.
The documents will be on public display by the end of the year, with the rubbish burning plant's environmental impact statement to follow late next year.
However Capital Recycling Solutions director Adam Perry said separating the proposals was not a clandestine way to get the more controversial of the two, the waste-to-power plant, approved.
"The government has been very clear to us in discussions about working with current scoping document that an approval now or acceptance of the draft EIS in no way advantages us for any future applications," Mr Perry said.
"There's no way the projects can be contingent on each other. The government has been at pains to explain that."
Mr Perry said they have delayed the waste-to-power plant project because of community concern and will wait until more studies are completed on the technology before submitting their proposal.
"If we rushed that through it would build resentment for it," Mr Perry said.
"We want to let that part of the project take the necessary time."
Mr Perry said the recycling plant was "viable" as a standalone activity and a "worthwhile pursuit" from a commercial perspective.
However their goal remained getting the waste-to-power plant off the ground.
"Otherwise the result is we're landfilling the fraction [we can't recycle], we'd rather use it for waste-to-energy," Mr Perry said.
"In the meantime we really believe increasing the recycling rate and improving landfill has a lot of benefits. It will significantly increase the life of Mugga Lane [tip] and save space for ACT hazardous waste."
But Conservation Council ACT executive director Larry O'Loughlin said the best way to reduce landfill was encouraging people to properly use the recycling facilities they already have.
"It is good to know they've dropped waste-to-energy at this stage," Mr O'Loughlin said.
"The recycling proposal has merits on the surface, refurbishing the rail line, and helping get trucks off the road. I have concerns about it going to Woodlawn. It's not an inexhaustible hole.
"The best way to reduce waste is to reduce consumption and make sure they do recycling better. The territory needs to do more with food waste, the [new green bins] should be for food waste as well."
The $200 million factory is to be built on Ispwich Street, Fyshwick, backing onto the rail line.
The waste-to-energy plant would be a 50:50 joint venture with electricity retailer ActewAGL, and would seek a feed-in tariff from the government for the electricity produced.
The project would divert trucks carrying rubbish to Mugga Lane to Fyshwick instead, where they would enter via Ipswich Street, dump their loads indoors, with negative pressure to minimise smell, and leave via Lithgow Street behind.
Rubbish would be sorted to extract recyclables, before being used to fuel the waste-to-energy plant.
