Fuel launderers in a Border area of Northern Ireland dumped toxic waste in the same place 10 times, it has been revealed.
Former republican paramilitaries operating with impunity in the South Armagh region were blamed but there have been virtually no prosecutions, the Stormont Assembly heard.
The sludge was produced in the treatment of duty-free diesel intended for agricultural use to remove chemical markers which could snare motorists if they used it.
Minister for Regional Development Danny Kennedy, who represents parts of South Armagh for the Ulster Unionist Party, said: "It is inescapable to me that monies generated as a result of this black economy ultimately will find their way back to republican paramilitaries."
According to a recent HMRC report, estimated sales of illegal diesel have risen from 12 per cent of all diesel sold to 25 per cent.
Estimates from the organisation suggest the UK government lost about £70 million in revenue last year, considerably less than the estimates of about £250 million in 2006.
In January it was revealed that no person has been jailed for fuel smuggling in Northern Ireland in the last decade.
But two heavy goods hauliers face losing their licence for using non-duty paid diesel and 17 more are under investigation, Stormont Minister for the Environment Alex Attwood said.
Byproduct sludge
Mr Attwood said a byproduct sludge produced during the laundering process had been dumped in the same part of South Armagh 10 times.
The Minister said Holyhead in Wales was being used as a gateway to Great Britain by haulage firms using black market fuel because controls were not as tough as those in Scotland.
“The situation is acute and there is going to be a need to escalate all the enforcement action,” Mr Attwood added.
He said hauliers had told him yesterday that half of companies in the industry were using illegal fuel to undercut them.
The Minister told the Northern Ireland Assembly small firms in Northern Ireland who have served people well for many years were facing the most immediate threat from competitors using illegal fuel.
“There is a need to have a gear change, a lot of work has been going on but a lot of further work is required,” he said.
Mr Attwood said figures showed up to 30 per cent of heavy goods vehicles were not in compliance with regulations, which includes using illegal fuel and other offences.
"We believe that there are hauliers who are using Dublin Port in order to move their goods into Britain," he said.
“Whilst there appears to be a lot of rigour in terms of the Scottish ports, in our view there is not similar enforcement at the Welsh ports.”
He promised to write to the relevant authorities and referred to a map he keeps in his office of the locations of illegal waste byproduct dumps.
“It brings home in stark terms what the scale of the problem is and the confidence of organised crime that it can dump this sludge in the same place with confidence and, if you like, impunity.”
PA