A new oil licensing regime and a beefed-up supply chain reporting system has led to the virtual elimination of fuel laundering, according to the Comptroller and Auditor General's 2015 report.
An audited random sampling of traders earlier this year yielded evidence of full compliance.
Data collected by Monaghan and Louth county councils meanwhile, indicate a significant reduction in containers dumped containing diesel sludge.
Incidents in Co Monaghan fell from 186 in January-July 2015 to 11 a year later. The comparable figure in Co Louth dropped from 239 to 69.
Since 2008 there have been over 1,000 cases of sludge dumping with associated clean-up costs of €6.7 million.
The majority have been in Louth with 539 cases, while Monaghan county council dealt with 459 cases.
Monaghan authorities estimate that 1,000 litres of dumped waste represents 100,000 litres of washed fuel on the market.
In 2011, an EU directive came into force which required the sulphur content of agricultural, industry and home heating fuel to be reduced to the same level as road diesel.
This made laundered fuel more difficult to detect, thus increasing the risk of greater laundering, according to the Comptroller's report.
In 2015, 215,132 litres of laundered fuel were seized in 47 separate incidents. This resulted in the closure of 15 filling stations and two convictions.
In a 638-case sampling programme over the past year there were 31 positive detections, with six prosecutions initiated.
In 2015 €2.6 billion was collected by Revenue in excise duty on oil. This represents 47 per cent of the total excise duty of €5.5 billion collected that year.
The Comptroller's report remarks that the successful Revenue and HMRC joint move to source and implement a new marker in both jurisdictions during 2015 was a significant achievement in the war against washed diesel.
The report recommends that Revenue begin measuring the tax gap in excise duties and beef up its IT system to eliminate anomalies.
It also recommends increased communication between Revenue districts on the issue.