William Sinclair has bought green waste compost firm Yorkshire Horticultural Supplies (YHS) through its subsidiary Freeland Horticulture in a bid to protect supplies of green waste.
YHS holds contracts to process green waste on behalf of Barnsley, Doncaster and Rotherham local authorities.
YHS's Doncaster site processes 40,000 tonnes of park and garden waste per annum, most of which is turned into green compost.
Sinclair chief executive Bernard Burns said: "The Government is determined that peat use in horticulture will reduce and eventually end. This move is about getting control of raw material and also over-sized material for our Superfyba product."
He said there were 200 composting sites in the UK and though half were controlled by multinationals such as SITA and Veolia, many made money from gate fees and did not want the end product. He was looking for sites close to Sinclair's bagging plants at Lincoln and Carlisle.
Meanwhile, Burns has appealed against local council planning permission bans on peat extraction at Chat Moss near Manchester. A public enquiry is set for 14 March 2012. Burns wants permissions to extend to 2025.
"We can get peat elsewhere, but from an environmental perspective it is better taking it from Manchester than Scotland, Ireland or the Baltic," he said.
The permissions already granted will satisfy one-third of peat demand up to 2030, when it will be phased out of commercial use he added. "So there will be requirement to import peat and that has high carbon costs".
Environment minister Richard Benyon has said he is open to suggestions on match-funding research and development to help the industry reduce its peat use.
But Burns said in 90 per cent of instances in the UK there are perfectly adequate peat-free alternatives. "But they cost more, and while peat is available if you're running a commercial business it is suicide to sell a product that costs more that does the same job."
He added: "Funding research is not going to solve that problem. I made it clear to Benyon that if he wanted to stop peat use in the horticulture market he needed to ban it, tax it or subsidise alternatives. But he's committed to a voluntary process and while I will engage fully in that, I can't see it working."
Burns said transport costs and the rising costs of wood caused by biomass demands meant that peat-free would remain expensive.
Green waste services Cuts push councils to charge for collection
Councils are charging homeowners to remove their garden waste or are hitting them with a fee at recycling centres.
More than a third of local authorities are charging their residents up to £90 a year to pick up their garden waste, an investigation by The Sunday Telegraph revealed. Others charge £20 for every visit to the rubbish tip.
Local Government Association environment board chairman David Parsons said: "Councils wouldn't introduce or increase charges lightly. However, with stretched budgets many are re-evaluating how such costs are covered when set against general waste and recycling services that everyone uses."
Vital Earth technical director John Wakefield said: "This is not only a concern for recycling companies but for everyone. If the charging scheme is rolled out, the green and food waste will be put in the black bin and will end up in landfill."