Tesco has found that thousands of tonnes of unwanted food it thought was going to feed animals has instead been used to generate energy, dramatically damaging its progress on reducing food waste. The UK’s biggest supermarket had said it had cut food waste by 45% between the 2016-17 financial year and 2023. But it has been forced to reduce the figure to just 18% after discovering that an unnamed food waste processor breached the terms of its contract. The debacle will be embarrassing for Ken Murphy, the chief executive of Tesco, who in September called for “global action” to cut food waste at a UN gathering of business leaders in New York. Murphy’s long-term share bonus package is also partly linked to Tesco achieving its aim to halve food waste by next year, meaning that he could miss out on more than £300,000 in shares as a result of the problem. In a statement on its website, Tesco said it had “terminated our relationship” with the food waste processor in the UK after the issue was uncovered via an audit. An investigation into the incident is under way, according to The Grocer trade journal, which first reported the issue. Tesco said it was now reviewing how it would achieve its aim to halve food waste. Last year it pledged to meet that target by 2025, five years earlier than previously promised. It said the problem did not relate to food deemed fit for human consumption that it redistributes via partners such as Fareshare and Olio and it continued to “work closely with food redistribution groups and charities to donate as much surplus food to local communities as possible from our stores”. Claire Lorains, group quality, technical and sustainability director at Tesco, said: “We have terminated our relationship with our food waste processor in the UK, following an internal review which showed that food which we believed was being processed for animal feed was in fact going to anaerobic digestion. “While anaerobic digestion can have a role in recovery of energy and avoids food going to landfill, under the food waste hierarchy, we count food going to anaerobic digestion as waste.” Anaerobic digestion is a method of breaking down food waste, which also produces renewable energy and avoids carbon emissions.