In this paper the dynamic model for the composting of contaminated soils with petroleum products is presented. The main objectives of this study is to gain a deeper understanding about the dynamic relations between composting process and demand in the market and to determine how different policies will influence the model and therefore the total amount of recycled contaminated soil. The methodology applied consists of system dynamic model, which describes the relationships between a cause and effect in complex and dynamic systems that have delays, feedbacks and non-linearities. The developed model passed both the behaviour validity and the tests of behavioural sensitivity. The validation indicated that the model is capable of generating “the right behaviour for the right reasons”. This paper shows the results of four various policies (including reference scenario) and sensitivity analysis. The results of the research indicate that the most sensitive parameter is the volume available for composting, which is the main factor that influences the amount of recycled material.