Ireland produces two million tonnes per annum of biodegradable municipal solid waste. The implementation of the Landfill Directive (1999/31/EC) will lead to the construction of centralised biological facilities; these facilities may be either composting facilities or anaerobic digestion facilities. A technical, economic and environmental analysis of composting and anaerobic digestion is undertaken in this paper. The results of the analysis suggest that composting is economically preferable to anaerobic digestion at scales at or below 50 kt/a of biowaste treated. However when CH4-enriched biogas is produced for use as a transport fuel and excise duty is reduced, as allowed by the Biofuels Directive (2003/30/EC), then the economics of anaerobic digestion improve greatly. If 100\% of excise duty is removed then anaerobic digestion is economically preferable to composting above 20 kt/a of biowaste treated. From an environment perspective anaerobic digestion saves more greenhouse gas due to displacement of fossil fuel powered energy. Anaerobic digestion with CH4-enriched biogas has the potential to save 1,451 kgCO(2)/t of biowaste treated as opposed to composting, which has the potential to save 1,190 kgCO(2)/t.