Complaining residents were partly blamed for the closure of the 108-year-old Wombwell Foundry in 2003.
Union reps said their environmental demands had driven ‘a big nail in the coffin’ - despite neighbouring homes being built more than 50 years after it opened.
At the time, Peter Fairham, Amicus convener, said they had spent more than £1.5m on environmental issues in an effort to please neighbours.
But the demands kept coming as the lobby gained influence, hitting the foundry’s fortunes.
The closure of the business was ordered after a year of poor results following a downturn in the steel market, fierce competition from the developing world and a malaise in British engineering, including at steel giant Corus.
A buy-out plan backed by the workforce was rejected by owners Hill and Smith and the firm closed with the loss of 103 jobs.
Peter Fairham said they had spent thousands on environmental equipment including £750,000 on a chimney which cleaned furnace fumes far above international standards and a road sweeper to remove dust.
He added: “Everything they have asked for we have tried to adhere to. We must have spent over £1.5m on environment issues, it hasn’t shut us but it helped.
“The environment lobby has too much influence, as soon as we dealt with one complaint there would be another. There are a lot of elements in the decision to close the foundry but this was a major one.”
The workforce buy-out plan was rejected by the foundry’s owners partly on the grounds that it would be too cash-strapped to meet its future environmental obligations, he added.