Sainsbury's is already working with PDM and is planning to invest in an anaerobic digestion facility in Northamptonshire, which will be used to create biogas and other forms of renewable energy.
The new plant is part of a deal with BiogenGreenfinch.
John Ibbett, chairman at BiogenGreenfinch, said: "This is an exciting milestone for both companies. Anaerobic Digestion is playing an ever-increasing role in recycling food waste in Britain."
He added that the partnership with Sainsbury's will benefit the environment significantly and help the UK reduce its CO2 emissions.
Anaerobic Digestion involves the composting of food and garden waste in the absence of oxygen which is then used to produce 100 per cent renewable electricity, according to Friends of the Earth.
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