The council's Benaraby landfill gas project (BLGP) took out the top prize in the category for design and construction of a local government project under $1 million.

"This is wonderful recognition for all of the effort which has gone into developing this innovative project in what is considered to be a small scale in comparison to other state centres," Gladstone Regional mayor Gail Sellers said.

"The judging panel assessed each nomination on a number of key elements including planning, innovation, sustainability, environmental impact and project management."

The BLGP extracts harmful gas in landfill by decomposition of organic waste and burns it in a system installed by Landfill Gas Industries (LGI).

LGI’s Jessica North said the company's landfill gas systems were type B certified appliances, which were becoming more commonplace in Australia, particularly in states where this certification was a legal requirement, such as Queensland.

Conceived in 2011 and commissioned in August 2012, the project will span 30 years and will begin production of “green power" from next year.

Sellers said the BLGP has already exceeded expectations in achieving the council's financial and environmental outcomes.

"The projects has already minimised environmental risks associated with landfill gas, reduced greenhouse gas emissions from the landfill by more than 60% and has become the first 'new' landfill project registered under the federal government's Carbon Farming Initiative," Sellers said.

"The project has also eliminated council's liability under the Carbon Price Mechanism, saving about $250,000 in the current financial year."