New figures show 8,000 tonnes of food waste is being collected from households and converted into energy using anaerobic digesting (AD) plants.
Sixteen plants operate in Scotland and a further 24 have planning approval.
Scottish Renewables said the AD industry was set to double in size in the next two years, fuelled by a rise in local authority food waste collections and the compulsory measures for businesses to separate their food waste, which came into effect in January.
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At AD plants, recycled food stuffs like vegetable peel or farm slurry are left to rot in a concealed chamber.
This process creates energy for power and heating.
Stephanie Clark, policy manager at Scottish Renewables, said: "Food waste is being diverted from landfills where it would have rotted and produced polluting methane gas.
"Instead, the waste is broken down by micro-organisms and converted into energy, providing electricity and heat to homes and businesses and reducing carbon emissions."
If all 32 Scottish councils introduced a weekly waste collection scheme, 72, 000 tonnes of food could be recycled every year, the body said.
Scottish Water has invested in two AD plants and a waste collection scheme.
Their facility in Cumbernauld, North Lanarkshire, can generate up to 8,000 megawatts of electricity each year - enough to power 2,000 homes.
Company finance director Alan Scott said: "As a significant user of electricity, Scottish Water is working to reduce energy consumption as well as to increase the amount of energy that we generate ourselves.
"This can help us keep costs low for the benefit of our customers.
"Since the launch of our anaerobic digestion facility at Deerdykes in 2010, we have recycled approximately 80,000 tonnes of food waste, transforming it into renewable energy and natural fertiliser."
Western Isles Council had an AD plant constructed near Stornoway in 2006 which processes household and commercial food waste on the Isle of Lewis and Harris.
Councillor John Mackay said: "The plant processes 3,000 tonnes of organic waste each year, diverting this waste from landfill and producing over 260,000 kWhs of electricity."