The Australian Competition and Consumer Commission (ACCC) has rejected south-east Queensland power generator Tarong Energy’s plan to sell fly-ash to Cement Australia.

Tarong had signed an agreement to sell fly-ash from its two South Burnett power stations in southern Queensland to Pozzolanic Enterprises, a subsidiary of Cement Australia.

However in a draft ruling, the ACCC says it cannot allow the deal to go ahead because it restricts competition.

It says the three-year agreement would lead to high prices and increase the cost of concrete products to consumers.

The ACCC is currently pursuing legal action against Pozzolanic for alleged breaches of the Trade Practices Act over a similar agreement it signed with Millmerran Power station in 2008.