Two possible grounds have been given to the Highland Council for a case at the Court of Session.
Combined Power and Heat (Highlands) Ltd submitted an application for the incinerator in Invergordon on the Cromarty Firth, which would be capable of providing heat and power for 10,000 homes.
It was refused by the council in August 2009 because of local fears emissions could cause health problems, and over the increase in traffic on the A9. It has also been opposed from the start by the nearby Highland estate of former Harrods owner Mohamed Al Fayed.
Highland Council refused permission in 2009, but the developers successfully appealed to ministers, who granted permission. But a legal challenge by Mr Al Fayed led to the staging of a public inquiry.
The inquiry reporter Richard Dent recently concluded that although public concern was widespread and sincere, it did not warrant the refusal of planning permission.
A spokesman said: "Highland councillors are going to proceed with an appeal against a decision by a reporter appointed by Scottish ministers to grant planning permission for a major waste to energy plant at Invergordon.