Its costs of disposing of oil-covered sidings and tracks have increased 50-fold since the ban on co-disposal of hazardous and non-hazardous waste came into force in July.
That law change slashed the number of sites taking listed refuse from 240 to 11, creating a massive increase in the cost of waste transportation for the railways engineer.
Before the implementation of the directive, its costs were in the region of only a couple of hundred thousand pounds, according to Network Rail contract and commercial manager Jonathan Pain.
Pains comments were made at the Minimising Construction Waste conference last week.
A Network Rail spokesman added: At the conference Pain did express that there is the potential for an increase in costs of £10m. This is why Network Rail is developing new recycling schemes and initiatives with our contractors to become more efficient, reduce costs and deliver a greener railway.
These schemes include onsite treatment of used materials and the recovery of spent ballast.
The firm is also working with contractors to ensure that all material is separated onsite to avoid cross-contamination and minimise the amount of materials sent to landfill.