The operator of the Markinch biomass plant has been accused of short-sightedness by not shifting wood processing onto the same site.
RWE’s plant is supplied by wood fuel chipped at its recycling facility eight miles away in Bowhill.
Cardenden Community Council suggested when it creates a proposed energy centre at Markinch additional, land purchased from the former Tullis Russell factory could accommodate Purvis Group’s wood chipping.
Secretary David Taylor said this would prevent the fuel having to be transported by HGV along the A92 in coming years.
He urged the firm to reassess the long term impact of its proposal to avoid making mistakes of the past but at a recent liaison meeting was told wood processing would remain at Bowhill.
He said: “This short-sighted approach detracts from RWE’s opportunity to have all its resources contained on the one site, with Purvis still processing the wood, albeit at Markinch.
“This would greatly increase efficiency and significantly reduce the amount of unnecessary heavy lorry movements on the A92 between Glenrothes and Lochgelly over the next 30 to 40 years.
“RWE will shortly be submitting a planning application to Fife Council for approval.
“Before this happens, the long term implications need to be reassessed and the company asked to reconsider its proposals to avoid making the same mistake as before.”
RWE is to submit a planning application next month for the centre, which will provide heat for the Glenrothes District Heating Scheme, a collaboration between the firm, Fife Council and the Scottish Government.
The scheme will provide heat to local homes, businesses and council buildings.
A spokeswoman for RWE said: “As explained at last week’s liaison meeting, RWE have been successful in procuring a limited area of the former Tullis Russell paper mill operation to enable the construction of an energy centre to serve the proposed Glenrothes District Heating Scheme.
“There is not a suitable local alternative location to move the biomass reprocessing plant.
“Bowhill is a fully licensed plant that operates within a strict operational permit. Purvis employs 30 local men to operate the facility.”
She also said the firm would continue to work with the Cardenden community on any issues with the processing site at Jamphlars Road, where there were previously issues with dust affecting neighbouring residential areas.