Sembcorp and Sita UK are seeking permission for the construction of a £200M waste incinerator in the Teesside town of Redcar.
The borough council said the plant will convert non-hazardous rubbish collected from homes and businesses in the surrounding area into energy.
Called Wilton 11, it would be located within the Wilton International site in the town.
The two firms said the plant should prevent around 130,000t of polluting carbon emissions and may bring as many as 200 jobs.
“The renewable energy sector is thriving on Teesside and this latest news is extremely welcome from both an environmental and economic point of view,” said George Dunning, leader of Redcar and Cleveland Borough Council.
A plan for four wind power demonstration sites, recently approved by the Crown Estate, may generate further business for the construction industry.