Tesco is planning to spend €30 million in Ireland over the next five years to reduce its energy consumption by half.

The biggest supermarket group in the Irish market intends to introduce 100 per cent recycling of store waste and packaging by 2010. This will see more than 24,000 tonnes of waste recycled each year, equivalent to the waste generated by a town of 20,000 people. Tesco also plans to build what it describes as the most environmentally-friendly store in Ireland by 2009.

Subject to planning permission, the outlet will be the first Irish supermarket built from recyclable materials including wood, recycled plastics and other green materials. The store's location has yet to be decided, but it is understood it will be outside Dublin.

Such moves are part of an ambitious plan by the retailer to minimise its carbon footprint and address environmental concerns. With climate change a sensitive political issue, the initiative could well place pressure on other grocery retailers to introduce similar measures.

Tesco Ireland chief executive Tony Keohane said such "practical steps" would allow the retailer to make a meaningful difference in addressing environmental concerns. "This is not a short-term measure," he said. "We will continue to adapt our way of doing business to ensure that these steps are sustainable."

Tesco plans to introduce more energy-efficient technology throughout its network of 95 Irish stores. This will include the installation of more energy-efficient ovens, new refrigeration units, light timers and motion detectors. As part of this initiative, Tesco will appoint "energy champions" in all its stores. These staff members will be charged with monitoring energy use and to ensure that conservation measures are being applied.

Tesco's electricity output in 2006 was 185 megawatts, the equivalent of the output of a medium-sized power plant. The company hopes to reduce this by 50 per cent over five years.

It also plans to reduce the amount of packaging used. Re-usable "green" crates and "retail-ready" packaging are to replace secondary cardboard and plastic for fresh produce and other grocery items.

Suppliers will be required to both reduce the amount of packaging on their goods and to supply materials that can be reused or recycled.

Tesco will also trial composting in all of its stores. This will see all fresh produce and food waste segregated and recycled as plant and animal feed respectively. "Compostable" packaging will also be available on a number of organic fresh product ranges, including mushrooms, onions and carrots.

The group will reduce packaging on its own-label products by 25 per cent by 2010. It is also to assess the feasibility of solar energy and the use of biofuels for its fleet of 75 distribution trucks.