The Department of the Environment, Heritage and Local Government (DoEH) in the Republic and the Department of the Environment (DoE) in Northern Ireland are leading the project in partnership with the Waste Resources Action Programme (WRAP).
Interested parties have been invited to tender for phase one of the two-phase project. The first phase is due to be completed by April.
WRAP's materials project officer Helen Irons said that the objective was to decide whether a new paper mill using recovered paper, could be located within Ireland. Irons said it was "too early" to say what the potential capacity or product output would be.
A financial analysis on the preferred types of mill will also form part of the study. Irons said the recovery rates for paper in Northern Ireland and the Republic had increased in recent years and would continue to as more collection schemes for recyclables were introduced for domestic and commercial waste.
The DoE in Northern Ireland and the DoEH and local government in the Republic of Ireland share the view that the potential for additional reprocessing capacity should be explored and evaluated.
"They have formed the North South Market Development Group (NSMDG) to look specifically at markets for recyclables collected in both the Northern and Southern of Ireland," said Irons.
Story by Andy Scott