Maximising the use of anaerobic digestion to generate power from waste feedstocks is becoming a practical way to use waste contributing to the transition from a linear to a circular economy and reducing the carbon footprint. In addition to harnessing the production of biogas generated from anaerobic digestion plants, there are a stream of potential bioresources such as fertiliser, chemicals, gases and bioplastics which may provide sustainable alternatives to petroleum-based products. Island communities are constantly faced with waste management challenges often shipping waste off the island, which increases the 'islands' carbon emissions. This study investigated Orkney Islands as a model example, focusing on establishing whether an anaerobic digestion plant is a feasible sustainable waste management solution through analysis of waste quantities and composition, available technology, community buy-in, environmental impacts and economics. A survey of waste revealed 76,000 tonnes/annum of waste on Orkney over a variety of organic, textile and plastic categories which could generate 5 M m3 biogas and 11 M kWh electricity per year. Four scenarios of producer clusters for anaerobic digestion plant operations were modeled and showed an average of 19 years for investment pay back, demonstrating that significant investment would be required to make the project economically viable for the business. A life cycle analysis was performed, and the project found that anaerobic digestion produces the greatest environmental benefits for processing waste compared to landfill or producing animal feed. This study demonstrates the contributions of anaerobic digestion in the community and represents a blueprint on how communities can reduce waste and develop a circular economy. The benefits of implementing a combined heat and power plant were explored and the study found that the community would profit. The anaerobic digestion plant will provide a constant base load of energy to help fill the gaps created with other intermittent energy supplies (wind and tidal). The inclusion of a waste disposal system on the island significantly reduces the communities carbon footprint due to removing the need to ship waste to the Shetland Island for disposal. The energy produced in the combined heat and power plant can supply many end users, such as 97% of energy needs for the largest distillery on the island, 4 compressed natural gas trucks for the island or a 1-acre greenhouse. However, individual efforts will not be enough to create the change that is needed, community and regulatory collaborations are essential to create a circular economy in Orkney and significantly reduce the carbon footprint.