John Turner Construction Group has started work on a £1m energy-from-waste facility at Trafford Park for B&M Waste Services.
The "refuse derived fuel" facility follows a deal with an unnamed utilities company in Germany to supply fuel to one of its plants.
Neil Curtis, director of Wirral-headquartered B&M, said: "This is a substantial investment which further demonstrates our commitment to providing an economic and environmentally sound alternative to fossil fuels. Since B&M was established in 1999 the business has grown organically and this facility is just one facet of an ambitious expansion plan which will take our services into more geographical areas and sectors."
The facility will separate non-recyclable commercial waste from cardboard, wood and metals, which will be recycled.
The remaining non-recyclable waste will be processed, compacted into bales, then wrapped and transported to a combined heat and power site. The thermal energy will be recovered to produce electricity and steam generated for a local district heating system.
B&M Waste Services is the UK's largest independent waste and recycling specialist, employing more than 170 people across sites in Merseyside, Manchester, Leeds and Norwich.