Waste collected from homes and businesses in Wales is to be exported overseas 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.
The waste will be used in a power station to generate both heat and electricity for local Swedish 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.”
He added using the excess capacity in Swedish incinerators allowed waste to be disposed of cheaply.
The first shipment is expected to take place in June.