Recycling rates pass 30%
Households in Wales are now recycling more than 30% of their rubbish with some local authorities breaking the 40% barrier.
Seven authorities are already recycling more than 40% of household waste - meeting European targets two years before they come into force.
The figures have boosted Wales from third to second place in the UK league table, and it is now improving its recycling rate faster than top place nation England.
The Welsh Local Government Authority has said all local authorities will meet the EU's target of 40% recycling or composting by 2009-10.
Councillor Aled Roberts, the WLGA's environment spokesman, said: "Waste management has been embraced as a number one priority by every waste leader across Wales and today's results confirm that.
"Councils have joined forces to tackle significant waste pressures by looking at waste reduction, recycling collections and the treatment and collection of food waste.
"This year, councils are already up by more than 4% on the amount of waste they recycle or compost, which places them in an excellent position to exceed the first Landfill Directive target in 2009-10 and avoid stringent fines."
Welsh Assembly Environment Minister Jane Davidson said: "I am delighted that these annual figures show steady progress in meeting our European recycling targets.
"I am pleased that the WLGA has said all local authorities will hit the 40% target by 2009-10 and I am confident from early indications of the first quarter of 2008-09 that we are continuing to go in the same upward direction."
The figures come just weeks after the Welsh Assembly revealed that Wales is two years ahead of European targets to send less rubbish to landfill.
Local authorities in Wales will be given extra funding to investigate ways of recycling food waste.
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