A suspected fuel laundering site has been dismantled and 45,000 litres of fuel seized as part of an investigation into what is believed to be multi-million pound fuel fraud.
HM Revenue and Customs (HMRC), supported by the PSNI, searched an address near Newry on Wednesday.
HMRC said it had the potential to produce in excess of 10m litres of fuel a year and a £6.5m revenue loss.
Two men were arrested and have been released on bail.
HMRC described it as a "suspected distillation-type fuel laundering plant".
Specialised equipment thought to be being used in the laundering process was also seized.
Steve Tracey, Assistant Director of Fraud Investigation Service at HMRC, said that such plants "pose a serious risk to the public".
He said the methods used were often dangerous.
"Fuel launderers abandon harmful waste and transport fuel in vehicles that are unfit for purpose and unsafe.
"We believe criminals are now experimenting with processes that carry a risk of explosion as they seek to defeat fuel markers," he added.
HMRC said in 2016-17, the illicit market for diesel in Northern Ireland resulted in an estimated loss of £30m in duty and a further £10m in VAT, giving a total loss of £40m.