A biodigester will be built at Adnams to turn waste into domestic gas
The Suffolk brewer Adnams has started working with British Gas on a project to turn brewing waste into green gas for the national grid.
The brewer said it planned to build a "biodigester" at its distribution centre near Southwold to harness methane from spent grains and yeast.
British Gas and the government want to generate 15% of the UK's domestic gas this way by 2020.
Food waste from local schools may also be used in the Suffolk biodigester.
A spokeswoman for Adnams said it was "early days".
British Gas said it does not yet know how much gas it would produce or how much it would cost to build and run.
How a biodigester works
Waste is put into a sealed unit
Bacteria cause methane release
Gas is cleaned and enters the grid
The scheme has financial support from the government through its Renewable Heat Incentive for companies wanting to use and create green energy.
Gas from biodigesters should enter the grid from April 2011.
Gearóid Lane from British Gas said: "We're delighted that the government will provide support to make investment in biomethane commercially viable.
"With 85% of homes heated by natural gas, this is an opportunity to deliver renewable heat through our existing gas network and central-heating boilers."