Fifty senior industry and NGO executives met Defra ministers today to discuss multi-million pound plans to make greater use of anaerobic digestion - the technology which produces energy from organic material like food waste and manure.

The meeting heard that the process could produce enough electricity to power two million homes. Representatives from the agriculture and biogas industries, supermarkets, water and energy companies, the waste and food sectors, NGOs, Regional Development Agencies, local government and regulators met Defra ministers Phil Woolas, Jeff Rooker and Joan Ruddock to discuss practical ways to achieve a major increase in the use of this environmentally friendly technology. Ministers also gave details of how a £10 million programme of 'demonstrator' projects - announced by Hilary Benn in February - could help to encourage investment.

Delegates agreed to work with Government and each other to overcome the barriers to the greater use of anaerobic digestion and to take action to increase its capacity in this country. A follow up meeting in the autumn will review progress and set out ways to reach this goal.

Anaerobic digestion breaks down organic matter to produce biogas which can be used as a renewable energy source for heat and power, and as a transport fuel. It produces a nutrient-rich digestate which can be used as fertiliser, and importantly it keeps organic waste out of landfill, which cuts greenhouse gas emissions.

Phil Woolas said: "Anaerobic digestion is still an emerging technology outside the water treatment industry in this country, and it's clear we are not yet making full use of its potential. It has a number of real environmental benefits which we want to maximise, but to do this we need to overcome certain barriers, like the chicken and egg stand-off which can discourage investment in unfamiliar technology, and the lack of understanding of its benefits or the value of its outputs. "Today's meeting clearly showed how much enthusiasm there is across all sectors to make this work, and this is a high priority for Government.

"Our £10 million demonstration programme will provide a focus for joint action to make sure that the future development of anaerobic digestion in England is as cost-effective and environmentally beneficial as possible. We will be inviting bids for the projects in the autumn."

The anaerobic digestion demonstration programme will be delivered through a capital grant competition run by WRAP with assistance from the Carbon Trust. It will seek to fund between three and six projects that demonstrate the different benefits of anaerobic digestion.

Each successful project will demonstrate how 'state of the art' use of anaerobic digestion technology can make a significant contribution to achieving one or more of the following aims:

* maximising the cost effective production of biogas; * maximising the environmental benefits from the use of anaerobic digestion and its products;

* maximising the potential of anaerobic digestion to reduce the carbon footprint of the food supply chain; * maximising the opportunity for the injection of biomethane into the gas grid; and

* maximising the potential of anaerobic digestion to reduce the carbon footprint of water treatment infrastructure.

Potential bidders are encouraged to attend a series of stakeholder briefing events that will be held before inviting bids. These will provide the opportunity to discuss and ask questions about the programme.