US company Covanta has pulled out of plans to build an energy-from-waste plant in in Merthyr Tydfil, Wales.

The company was one of three on a shortlisted drawn up by a consortium of five councils which wanted a new facility to deal with the growing problem of landfill waste in Wales.

Covanta blamed its withdrawal on the councils, saying they had “a fragmented approach to dealing with waste” which had made the plant “unviable”.

It added that its plant would have “provided a low disposal cost, low carbon and highly efficient” solution to the waste problem, and added that the investment would have “transformed” Merthyr Tydfil, which it called “one of the most depressed towns in Wales”.

The two proposals left on the shortlist are from French firm Veolia ES Aurora and the UK’s Viridor Waste Management.