The government has identified West Lithgow Precinct, Parkes Special Activation Precinct, Richmond Valley Regional Jobs Precinct and Southern Goulburn-Mulwaree Precinct as priority locations to host waste-to-energy power stations.

Brad Smith from the Nature Conservation Council said the project could bring its own set of issues to the Lithgow area if it went ahead. He cited a recent air quality survey that was done in the Lithgow and Blue Mountains area that showed that the area had decent air quality, but warned the tests didn't look for the kinds of pollutants that an incinerator would emit.

The year-long study found the Blue Mountains and Lithgow region enjoys air quality that is generally very good, with air pollutants below health-based Australian air quality standards. "Some of the pollutants that this project would emit, like sulfur dioxide and nitrogen oxides haven't been monitored in the AIR. So we don't have any data on that, unfortunately," he said.

"Sydney should not merely export its environmental problems to the regions," Mr Gambian said.

"We believe that incineration is environmentally harmful and unsustainable. But if the government is going to proceed this way, these facilities must conform to world's best practice.

"That means whatever facilities are built in the regions must operate to the highest environmental standards to ensure harmful chemicals and by-products are eliminated as much as possible during incineration."

The proposal has been slammed by the Greens.

Greens Cr Brent Hoare said having a "toxic" incinerator on the doorstep of the World Heritage-listed national park was a "ludicrous proposal".

"These incinerators are dangerous. They are a huge producer of dioxins, and also produce toxic ash that still needs to be disposed of somewhere. This facility will emit heavy metals, dioxins, lead, mercury, nitrogen oxides, and particulate matter all linked to health problems including asthma, heart disease and COVID-19 complications," he said.

Ward 1 candidate, Sarah Redshaw, said the plan would mean large trucks full of waste travelling through the Mountains.

"This is all part of the government's plan to lift the ban on B-doubles on the Great Western Highway, meaning trucks larger than 19 metres, designed for freeways and remote driving, will thunder through busy shopping centres, past schools, and add to congestion and pollution.

"We need to see less trucks on our roads, and freight being moved onto rail. Having to transport waste from Sydney to Lithgow through our community will clog our already limited transport corridors".

State Greens MP, Cate Faehrmann, said while Sydneysiders could breathe a sigh of relief that the facilities would not be built within the basin, a small number of regional communities would now have to bear the brunt of the growing waste problem in NSW.

"We need to be moving towards a zero-waste economy and investing more heavily in truly sustainable waste innovation instead of creating incinerators that put our health at risk," she said.

"The government should introduce a ban on waste to energy incinerators across NSW so that no community is exposed to toxic pollution. This is exactly what the bill I introduced in 2020 would have achieved which both the government and opposition voted against".

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