Abstract: A method of producing soil conditioners from waste material, and of utilizing the internal energy thereof, while reducing the volume of the waste material at the same time, is disclosed in which initially compacts of a refuse-sludge mixture are subjected to intense rotting whereby the water content thereof is reduced from an initial value of about 50 to 60 percent to about 30 percent, preferably 20 percent, and whereby the compacts become dried and storable. The dried and storable compacts are ground or screened, or both, with the screened out fine fraction being directly usable as a soil conditioner, and then the ground or screened, or both, compacts are thermally treated by one of low temperature carbonization and combustion.