Officers from Environment Agency Wales have launched an investigation after an incinerator breached strict emission limits set out in its environmental permit.
Test results from the Materials Recovery and Energy Centre at Crymlyn Burrows, Swansea, have indicated that the site has exceeded the permitted limit for dioxin emissions on two occasions.
The operator is co-operating fully with the Agency and has stopped all operations until the cause of the breaches can be established.
The operators accepted a formal caution from the Agency last year following emission breaches from the site in 2010. A stricter monitoring regime is in place following those incidents.
The operator has already started cleaning work on a section of the plant as this could be the cause of the breach.
Dioxins are produced by fires, including bonfires and car exhausts, which can have an impact on people's health if they enter the food chain.
Steve Brown, Area Manager for Environment Agency Wales said:
"Environmental permits are there to make sure that local people and the environment are protected from the impact of sites like these.Huw Brunt from the Public Health Wales said:
"They have strict conditions and emission controls which we will enforce. The operator is complying fully with our investigation.
"We will make sure they do all that they can to rectify this problem as a matter of urgency and we will consider taking further action if it is appropriate."
"Raised levels of dioxin emissions over a short time period are unlikely to pose an appreciable health risk to the local population.Environment Agency Wales is continuing to investigate and collect evidence and consider if further action should be taken against the operators of the site.
"However, a number of breaches of the dioxin emission limit have been reported at this site over the past couple of years.
"This recurring problem raises associated public health concerns and we would like to see this situation resolved as soon as possible."
The incinerator will not start routinely operating again until the company can demonstrate it is in compliance with its permit.