It is understood talks have taken place with major coffee companies
A charge of up to 15 cent could be levied on disposable coffee cups in a bid to tackle waste.
Reports say around two million takeaway cups are sent to landfill every day.
The so-called 'latte levy' is seen as a bid to to get people to start buying reusable ones.
It is understood talks have already taken place with major coffee companies - including Insomnia and Supermacs.
The Irish Independent says the Government is also looking at other schemes - such as getting stores to put incentives in place for customers who bring their own cup.
Oisin Coughlan is the director of Friends of the Earth.
He told the Pat Kenny Show here on Newstalk the plastic bag levy is a perfect example.
"We know the plastic bag levy was something that we're all very proud of now - it changed behaviour overnight with a tax on plastic bags of 15c.
"So the idea of a levy on disposable cups is worthwhile.
"Cause don't forget: it's not (just) paper, they have plastic in them.
"We know everyone's sick of plastic, it's turning up in our drinking water in Ireland, it's in almost every fish in the Irish Sea according to research - so we do have to do something.
"I think probably a ban would be better, but apparently that's more legally complicated".
According to Bord Bia, 75% of Irish consumers say they drink coffee - and seven in 10 drink more than one cup a day.
Sales of fresh coffee are continuing to drive growth, with overall sales of instant coffee declining year on year.
Coffee trade value sales of €176m are predicted for 2020.
Bord Bia says: "While coffee increases in popularity, consumers are becoming more precise about their coffee with the coffee blend, espresso shot and even the type of milk used all significant factors in deciding what coffee to order."
A recent report from Mintel found that these preferences are more common amongst 16 to 34-year-olds, with older consumers opting for the more traditional coffees like an Americano.