Three company directors were Monday arrested in Brabant, the Netherlands, for blending fuel oil with hazardous waste, Dutch media reports.
The Dutch Public Prosecutor (OM) alleges that the contaminated fuel was sold for use on ships as well as in heating and combustion plants.
The illegal practice could have netted the as yet unnamed company "millions of Euros" in profit since 2010.
An investigation into the company began after fuel testing of trucks, conducted in 2011 as part of a campaign by police and regulatory bodies, revealed fuel oil contained waste.
A fourth company executive was expected to testify on Monday.
Commentators said the practice of mixing hazardous waste with fuel oil is damaging to the health of those operating facilities where the fuel was being burnt as well as to the environment.
In addition, distortion of competition occurs as the mixed fuel can be sold more cheaply.
Last year, another waste management firm was fined €480,000 ($551,000) for acquiring oil mixed with hazardous waste, contaminating it further and selling it as fuel oil.
In 2012 Dutch Police organised a three day investigation into the illegal practice of blending hazardous substances into bunker fuel at the Port of Rotterdam.