The disused cement works at Upper Beeding is one of only three possible sites for a much-needed waste recycling plant, an inquiry heard.
The public inquiry continued yesterday into proposals for houses, a hotel and restaurant and industrial units at the site.
Government inspector Geoff Salter heard evidence from planning consultant Steven Fidgett, who is overseeing Callstone's planning application.
West Sussex County Council believes the land should be considered for use as an energy-from-waste site and it would be premature to grant planning permission for the development before looking into other options.
Mr Fidgett agreed under cross-examination that it was hard for councils to find suitable sites for the recycling plant.
But he said Callstone's proposals were soundly based on local development plans and policies.
The inquiry, held at the Steyning Centre, in Steyning, is due to last until the end of the month.
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