In order to make use of it as a fuel, you could consider these options:
- Processing the stuff with micro-organisms like bacteria that can create methane from it, or other usable fuels.
- Drying it and using it directly as a combustible fuel. The dryer you can get it, the more efficient your combustion will be.(less energy will be wasted to vapourising the water it's containing)
- You can gassify it after it's been dryed, like they do with wood. This gets you a more versatile/dense/clean end product.
But all this will waste a lot of other usable components within the sludge.
Granted that the sludge isn't contaminated, I suppose it would be best to use it as fertiliser. Almost all of the components will be put to use then.
You could also extract usable compounds that are present abundantly enough, like ammonia. You can sell that to fuel manufacturers to make ad blue from. That way, our pee/poo will contribute to a cleaner environment.