The manufacturer of renewable foods and industrial ingredients has invested £20m (€28m) in the new equipment that will allow the company to switch to renewable biomass to supply 70 per cent of the energy needs in its London refinery.
The planned feedstock is wheat-husk, but the boiler is versatile and can use other renewable by-products.
Ian Bacon, chief executive for Tate & Lyle Sugars, said: "Having recently confirmed that our carbon footprint is low at 0.43 tonnes per 1 tonne of sugar, we are now proud to be taking steps to reduce that even further with this project.
The boiler will reduce the carbon footprint of Tate & Lyle cane sugar, from the field to leaving the factory, by 25 per cent to 0.32 tonnes per 1 tonne of sugar.
"At Tate & Lyle we have an overall target to reduce energy consumption by 3 per cent per annum and this has been in place since 2000," Bacon added.
Efforts to reduce carbon emissions at the Thames refinery are part of Tate & Lyle's group-wide environmental and energy saving measures, which has seen overall energy consumption per unit of output reduced by 1.2 per cent.
Water consumption per unit of output has reduced by 2.5 per cent, and non-hazardous solid waste consumption per unit has reduced by 29.5 per cent in the last year.
A similar boiler design is also being used in a new Tate & Lyle corn processing facility in Iowa, which will come on stream by March 2009.
Simon Gibbons, operations director for sugar, said: "We are making these investments as we see a long term and prosperous future for our European cane sugar refining businesses."
He added: "The business benefits are payback in lower energy costs, sale of Renewable Obligation Certificates to electricity generators and sale of CO2 credits.
Plus if, as we expect, carbon taxes increase in Europe , Tate & Lyle will be well placed to benefit from this change."
The UK Food and Drink Federation (FDF) launched an Environmental Ambition last month setting out where its members felt they could make a difference to the environment.
One of these ambitions was to achieve a 20 per cent absolute reduction in carbon emissions by 2010 compared to 1990 and to demonstrate leadership by aspiring to a 30 per cent reduction by 2020.
Director of sustainability and competitiveness Callton Young at FDF applauded Tate & Lyle's biomass project.
He said: "Climate change is perhaps the biggest challenge facing the planet.
The planned 70 per cent reduction in CO2 emissions associated with energy use is significant by any standards.
Indeed, it is exemplary."
Other companies making significant changes to be more environmentally friendly include potato processing company McCain Foods, which is investing £10m in new technology.
Up to 70 per cent of its annual electricity needs will soon be met from renewable energy sources at its factory outside Peterborough, reducing the company's carbon dioxide emissions by 20,000 tonnes per year.
Meanwhile, three wind turbines at its Whittlesey plant will provide on average 60 per cent of the electricity required to operate the plant over the year as a whole.