The private waste management sector says the development of the Poolbeg incinerator is standing in the way of creating 235 new jobs.
Waste recycling companies say they will invest €245m if the incinerator is resized and the cost of landfill is increased.
The sector says it would also create 500 short-term construction jobs.
The Irish Waste Management Association is calling on the Government to increase landfill levies and scale back the size of the Poolbeg incinerator.
The IWMA says investment will only be possible if the cost of landfill is increased and the capacity at the proposed incinerator at Poolbeg in Dublin is halved.
It says recycling or processing of waste is currently too expensive relative to the low cost of sending rubbish to landfill.
It wants the Government to rapidly increase the landfill levies to make this option more costly. The IWMA admits that this will mean a rise in bin charges for consumers.
The proposed incinerator at Poolbeg will cater for 600,000 tonnes of waste a year. The group wants this reduced to a maximum capacity of 320,000 tonnes.
1.2 million tonnes of waste will be produced in the Dublin region this year alone and 500,000 tonnes will go straight to landfill.
But private waste processors say they can put this rubbish to better use.
They have the planning permission in place and have been granted the waste licences to deal with an extra 670,000 tonnes of waste a year.
The waste companies have not yet proceeded with the investment in these new plants because the demand for their services is not there.
