The blaze was started by a vat of hot tar left on the back of a lorry in a garage at Holme End Works, Calder Brook, Mytholmroyd.
The fire was so intense the steel doors of the garage glowed yellow and the roof – which contained asbestos – cracked and collapsed. Three vehicles were also damaged.
Now nearby residents are concerned about the health implications. Jane Eidson, who lives near the depot, said: "There was a lot of smoke, some hissing and a bang.
"I'm not very happy about the asbestos. We were all standing around watching the fire."
Her husband, Anthony, said: "Asbestos is everywhere around Hebden Bridge because we used to manufacture it around here. It is buried everywhere you can think of and we shouldn't be surprised." No warnings were issued about the asbestos as the fire raged. Residents were not advised to close windows and it is understood the council has not been in touch since to discuss any health implications.
Calderdale Council now faces a repair bill running into tens of thousands of pounds. One lorry was destroyed and two others were damaged by smoke and water.
Yesterday the collapsed garage block was still smouldering. Fire investigators have been on the scene searching for clues.
The fire is believed to have started after council workers locked up the depot and left the tar heater alight – a common practice.
Steven Sutcliffe, who owns Calderbrook Garage, said: "The metal doors turned yellow because of the heat. We heard a bang and the doors shook. They were planning to remove the asbestos soon but now the building has been destroyed."
A council spokesman said investigations were continuing.