A plan to transport waste to France is also being looked at
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Politicians in Jersey and in Guernsey have agreed to spend a total of £50,000 to assess whether a joint waste plant for the two islands is feasible.
Jersey has to replace the incinerator at Bellozanne, which is expected to cost about £80m.
Guernsey is considering building a £72m waste to energy plant at Longue Hougue.
If a joint plant is approved, it is likely it would be built in Jersey, senior Jersey politician Senator Philip Ozouf has said.
Senator Ozouf, president of the Environment and Public Services Committee, said: "At this moment I can't envisage any joint plant to be in Guernsey.
"It would make sense not to move a smaller amount of waste from one island to another than a larger amount."
Senator Ozouf said his committee was also considering if it was possible to transport Jersey's waste to France.
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