Rubbish collected from properties in Wales is to be exported overseas to be used to generate fuel.
Pembrokeshire and Ceredigion County Councils have struck a deal worth £48 million with Potters Waste Management, under which non-recyclable waste will be exported to Sweden.
A power station in Sweden will then convert the refuse into energy for householders.
The initiative is expected to divert around 30,000 tonnes of waste from going to landfill, with each council saving more than 350,000 a year.
Richard Brown, Pembrokeshire Head of Environment and Civil Contingencies said: “It provides a flexible, low-risk, value-for-money approach that enables us to divert waste from landfill in the short term but avoids committing too much waste to incineration in the long term as recycling rates escalate.”
The excess capacity in the Swedish incinerators allows waste to be disposed of cheaply he added.
The first shipment is expected to take place in June.