(FORTUNE Magazine) – The business of burning trash to create electricity still emits more than a few hot sparks. A new foreign player has taken over one of the six major U.S. firms in the business. Meanwhile, the Environmental Protection Agency threatens to put more restrictions on all refuse-to-energy plants. And Nimbys -- the ''not in my backyard'' citizens who are fearful of toxic emissions from such plants -- are winning legal battles to prevent their construction and use. Ogden Projects, a subsidiary of Ogden, a conglomerate, and Wheelabrator Technologies, recently spun off by Henley, another conglomerate, lead the industry (table). Now a third conglomerate, Swedish-Swiss Asea Brown Boveri, has paid $1.6 billion for Combustion Engineering, a company plagued by technical problems. ABB will give it the financial support it needs to compete. The EPA wants to ban any burning unless the municipalities that use incinerators recycle 25% of their garbage. The refuse-to-energy industry argues that all trash -- including the stuff headed for landfills -- should be subject to the same rule. Americans generate 160 million tons of garbage annually; 80% still ends up in fills. Many citizens are convinced that these incinerators spill harmful dioxins or contaminate water supplies. They have persuaded local authorities in Los Angeles and Philadelphia, among other places, to scrap planned projects. . Operators of waste-to-energy plants are happy to separate recyclable material as long as they can sell it. Most already sort out ferrous metals, selling them as scrap. But doing this with other materials is not always a guaranteed sale because there are no reliable markets. As a result, many materials, like all-too-familiar curbside bundles of newspapers, are likely to remain just garbage.

BOX: WHO'S GOT TRASH-TO-ENERGY PLANTS Company In Under Construction Operation or Contract Ogden Projects 13 14 Wheelabrator Technologies 10 4 Foster Wheeler 3 6 Combustion Engineering 3 2 Westinghouse Electric 2 6 American Ref-Fuel 1 2 Environmentalists would like to keep these numbers from growing.