Viridor has today unveiled plans for a "ground-breaking" £65m plastics recycling facility near Bristol that will produce over 60,000 tonnes of recycled polymers each year, using power generated by an on-site waste-to-energy plant.

The recycling firm said the project would be the UK's biggest plastics recycling plant, producing 60,000 tonnes of recycled plastic during its first year of operation from 81,000 tonnes of plastic waste including 1.6 billion plastic bottles, pots, tubs and trays.

By year three the company aims to increase production to 63,000 tonnes of recovered plastic for use in new products, taking in 89,000 tonnes of plastic pellets and flakes recovered from 1.7 billion bottles, pots, tubs and trays.

The new plastics plant, due to begin operations in 2020-21, will be powered by Viridor's £252m energy recovery facility, which is currently under construction on the same site in Avonmouth. Once completed in 2020, the waste-to-energy plant will incinerate up to 320,000 tonnes of non-recyclable waste each year to generate enough electricity to power around 44,000 homes.

Viridor, which is a founding member of the industry-led Plastics Pact aimed at tackling the scourge of plastic pollution, said teaming up the two new facilities was a "real industry first" that would create "a true circular economy energy park".

Producing recycled plastic uses half the amount of energy needed to make virgin plastic, and powering the recycling process from non-recyclable waste "takes energy efficiency one step further and gives this material a real purpose", it said.

Chris Loughlin, CEO of Pennon - Viridor's parent company - said it was making the "first of its kind investment" as there was a clear ambition from UK consumers and politicians to improve recycling rates and stop exporting waste to be recovered abroad.

"By using waste which cannot be recycled as the fuel to create low carbon electricity which will power plastics recycling we are creating a truly resource and energy-efficient waste management solution," he said. "Unless action is taken now and investment in infrastructure is made, a plastic recycling capacity gap will undermine UK ambitions and the sustainability targets of retailers and the big consumer brands. We are, therefore, delighted to be leading the way."

The project will also gain a green boost from the addition of £2m onsite water treatment plant, thanks to further investment at the site from Viridor's sister company Southern West Water, the company added. The aim is for the water plant to recycle 80 per cent of the water associated with the site, Viridor said. 

Sarah Heald, Pennon's director of corporate affairs and investor relations, said the project "will create a centre of excellence for UK recycling".

The announcement came as Pennon reported "robust" financial performance last year with an 8.3 per cent increase in profit before tax. This was driven by a 19.1 per cent growth in earnings at Viridor thanks to its fleet of UK energy from waste facilities, Pennon said.