North Lanarkshire Council has said it will appeal a recent Court of Session judgment that said the pyrolysis plant at Carnbroe, near Coatbridge, can go ahead.
The challenge is the latest twist in a long court battle against the plant, which is being built by award-winning butcher Simon Howie's firm Shore Energy.
The scheme was initially rejected by councillors but then approved by the Scottish Government following a review.
More than 4000 people living in the area have campaigned against the plant, which will burn waste and turn it into energy.
Their hopes were dashed last month when the Court of Session ruled planning permission should be granted, but they have now vowed to fight on.
Campaigner Maggie Proctor said: "We are absolutely delighted the council has decided to continue the fight."
A spokesman for North Lanarkshire Council said: "We think there are grounds for an appeal of that decision to the Inner House of the Court of Session and accordingly the council has today lodged an appeal to that effect."
Shore Energy managing director Mr Howie has called for the community to get behind the project, which he says will create jobs. He has also denied there is any risk to health.