Hull and Holderness Magistrates Court handed the fine to Stobart Biomass over its waste transfer operation at Albert Dock in Hull.
The company was storing waste wood chips in 2011 and 2012 for the waste-to-energy industry.
The UK Environment Agency said it had given the company guidance to ensure that stored wood would not cause any problems to the local environment or nearby communities.
The agency’s investigation however found that the company did not take any measures to prevent dust being blown onto nearby areas during high winds in dry conditions.
Local residents were said to have reported about dust being blown onto their properties, windows and cars.
The Environment Agency said a pile of woodchip and household waste was also located close to the dockside where some of it was falling into the water that may affect the Humber Estuary.
The Environment Agency environmental crime team leader Joanne Holt said waste management operations can potentially cause many problems to the local environment and neighbourhood and companies must ensure they meet all of their environmental obligations.
"In this case, Stobart Biomass were warned about the potential problems that waste wood piles could cause, but they failed to ensure that it was stored in an appropriate manner," Holt added.
The court has also ordered Stobart Biomass to pay legal costs of £5,512.73 and a victim surcharge of £15.
