Treated waste water sludge is very commonly used here in Sweden albeit using anaerobic digestion rather than regular composting. High temperature composting would kill any pathogens so you can absolutely get permission to use a composting waste system in small scales. For larger scale waste treatment it is with anaerobic digestion, as mentioned.

The captured methane is typically used for fuel, e.g., in public transport.

As far as I know the sludge used for fertilizer needs to be certified under something called REVAQ. Some controversy does exist surrounding safe levels of the various harmful substances and perhaps PFAS in particular.