Its planning application was rejected by Surrey County Council last month and the firm has decided not to appeal.
Managing director Robert Wheatley said: “We respect the decision taken by councillors.”
But the county council did back SITA’s plan for an energy from waste site at Capel. Work is due to start on this in the autumn, for completion in 2005.
The plant is expected to use 110,000 tonnes of material a year, generating 8MW of electricity.
SITA is also planning to open three new materials recycling facilities in Surrey at Guildford, Redhill and Sunbury, and a new composting plant at Runfold.
Improvements planned include installing recycling facilities at 15 civic amenity sites and upgrades for four transfer stations.
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