This paper discusses the importance of sewage sludge as a sustainable energy resource and how recent changes in legislation have forced European water companies to rethink their approach to sludge. In these times of rapidly escalating costs for waste disposal and uncertainty about future legislation, a self contained solution, not relying on external markets, appears to be a secure way forward. This paper addresses how Entec have assisted Northumbrian Water Ltd for a decade in the management of sewage sludge. Together they have developed a sludge handling transfer and processing strategy based on drying and gasification to generate a gaseous fuel for use in a CHP plant. This provides an environmentally self sustained and cost effective solution for the next 20 years and beyond. Details are given of the drying and gasification processes, together with an abridged history of the proposal development. This project attracted a European Union Thermie grant for the demonstration of innovative and energy efficient technology.