A major drawback to combustion of waste is that the fuel is likely to be non-homogenous, damp and it will come in large fragments. The water content will lower the recoverable energy content per unit mass of fuel. The lack of homogeneity will make for inconsistent combustion which will cause fluctuations in emissions adding to the difficulty of cleanup, and it impedes designing for maximum efficiency. Also the combustion process often neglects materials recycling which comes higher in the waste hierarchy, and so is not an ideal sustainable solution.

In order to combat these problems, Refuse-derived fuel or RDF plants take bulk waste and remove recyclable or non-combustible materials, the remainder then being dried and shredded or processed into a uniform fuel. This fuel has a calorific value much higher than that for municipal waste. A sample produced in Rome's RDF plant was discovered to have an energy content of 20.5 GJ/t from testing on a using a bomb calorimeter in Cardiff University in November 1999. That burnt at the Dudley incineration plant averages 10 GJ/t. RDF will burn in an incinerator cleaner and hotter. The process will therefore be slightly more efficient and will need less of a cleanup operation.

The RDF will often power a generator on site, and sometimes the fuel is sold as fuel to power other company's energy plants. Indeed, it can be sold to coal power stations as a fill in material.

Although there are many successfully operating RDF plants in other European countries, this process has not taken off in the UK. Mass burn incineration dominates the UK Waste-to-Energy industry. There are only four RDF plants currently operational throughout the UK. The Byker refuse derived fuel plant in Newcastle has been treating waste since 1979. The plant can process about 50,000 tonnes of refuse per year. The waste is first sorted to remove any unwanted ash and wet material. The recyclable metals and glass are then removed. All the remaining waste has a useful energy content and is then shredded and pelletised. Of the input, almost 27% of waste is produced into RDF pellets. The fuel pellets are then incinerated in a combined heat and power system and generates 2.3MW. There are also plants in Newport on the Isle of Wight, Slough and Hastings (which sells it's RDF to the incinerator at Slough).

Although the fuel quality is improved and makes for better more efficient combustion, the cost of the process is a major drawback. It is a capitally intensive process which has to be done on a grand scale if it is ever to pay off it's costs. The sale of recyclable materials will go some way to generating revenue, but the current state of the recycling market does not bode well for this. Also a guaranteed market for the product has to be developed. Often the RDF plant operator will not have the revenue (or even expertise) to build an accompanying incineration plant so will have to develop a business partnership in order to sell the fuel. The payback period is long as costs are high, therefore revenue from sales has to be guaranteed. This necessitates a guaranteed partnership with an incineration company for an extended period in order for the RDF plant to make profit.