South West Devon Waste Partnership has decided that MVV Umvelt will be its preferred bidder to provide a solution to treat the region's residual waste.
Howard Ellard, Viridor's Technical Development Manager, said: "Viridor is naturally disappointed about the decision, as we worked hard putting together what we believed to be a deliverable and cost effective bid.
"We remain confident that there is still an evident market for our New England Quarry development, and that it is a suitable location for such a facility - as clearly identified in the Waste Local Plan.
"We will now review our options for the site and look forward to the outcome of our planning application in the coming months."
MVV's solution is an Energy from Waste facility at North Yard in Devonport, Plymouth.