THE Environment Agency celebrated after High Court judges ruled that Cemfuel, the controversial liquid fuel, is a hazardous waste.
And Castle Cement, which brought the test case to the London court, was ordered to pay the agency's substantial legal costs.
The company burns the mixture of waste solvents and oils as fuel at its Ribble Valley and Lincolnshire plants, and applied last year for Cemfuel to be reclassified as a fuel.
If the firm had been successful, it would not have been subject to the agency's intensive monitoring regime, brought in under European law last year.
But in the test case, judges ruled the Environment Agency had been right in classifying it as a hazardous waste despite its useful properties as a fuel.
Mr Justice Burnton said it was waste until the moment it was actually used as a fuel.
He said: "Its constituent wastes are not recovered until it is incinerated."
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