Thousands of tons of waste that was shown as having been recycled is ending up on council landfill sites.
Bales of plastic bottles mixed with paper, cans and even glass are having to be dumped.
Piles of recycled waste-paper contaminated with plastic bags and wood are being sent to landfill.
Yet it was all supposed to have been sorted and ready to be used by manufacturers.
In response to the news, arc21 a waste management group which represents 11 local councils, said the amount of dry recyclable material from households recycled last year in its areas was over 90,000 tonnes.
It said these figures were independently validated by the Northern Ireland Environment Agency.
"Householders in the arc21 area can be absolutely assured that the material properly placed in their recycling bins is recycled and I would encourage them to support their councils recycling schemes as much as they possibly can, by maintaining and indeed stepping up their current levels of recycling," the group's Ricky Burnett said.
Arc21 represents Antrim, Ards, Ballymena, Belfast, Carrickfergus, Castlereagh, Down, Larne, Lisburn Newtownabbey and North Down councils.
The BBC was contacted by manufacturers after some had become increasingly concerned at the high level of recycled waste they were having to turn away.
Some were even considering importing recycled waste from outside Northern Ireland to overcome the problem.
The problem seems to be caused by how the waste is collected and sorted.
While some material is picked up from individual houses in kerbside boxes and is sorted on the spot, a lot of waste is put into recycling bins.
These take paper, plastic bottles and cartons, cans and even textiles and drink cartons. Some councils even allow small electrical items to be added.
This mixed waste is then at the mercy of large sorting facilities that use both manual sorting and automated machinery to separate the waste.
But this method isn't always able to come up with the right quality.
Plastic manufacturers, for example, would like nothing worse than 2-6% contamination by paper or card or the odd can, but they are getting bales of plastic that are often a lot higher and in some cases even reach 35-40% contamination.
"We've been getting things like this piece of steel bar from a construction site," explains Stefan Cherry of Cherry Polymers as he holds up a metre-long reinforcing bar.
His company makes plastic pipes from recycled bottles.
"We've had more vulgar things like dead animals, food waste, nappies, cartons and even shopping bags," he said.
All that is in plastic waste that was supposed to have been sorted before it was sent to him.
In the yard outside the plastic chipping facility in County Antrim sit bales of plastic - 100 tons of it, and its all to be land-filled.
It is so contaminated by other products it can't be used.
Cherry Polymers had to buy it in and now have to pay to have it dumped. It all puts pressure on the bottom line and potential jobs.
In the paper recycling plant of Huhamaki near Lurgan, Philip Woolsey surveys the huge piles of waste paper they process every day.
"It got to the stage for us where we couldn't use the paper that we were purchasing. That drove us to change our supplier and now we use a kerb-side recycling," he said.
"There was just too much alternative material in it; plastics, textiles and metals. It just gets to a point where it's too much for our machinery to handle."
Stefan Cherry worries about glass.
They got a bale of plastic contaminated with glass. Before they could stop the process, the shards of glass had ripped up conveyor belts and cost the company thousands of pounds.
He says the situation is getting worse.
"The issue is that the councils have been forced to get recycling rates up and as more materials are added into the co-mingled wheelie bins the quality of materials really drops.
"The other problem is pushing the tonnage through the sorting plants. The more they try to get through the plant, the more the quality seems to drop and that is really the big issue".
An added problem is that not all councils collect or sort out the material in the same way. As a result the quality varies between groups of councils. Some achieve contamination as low as 1 - 2% and their materials are sought after.
It is those at the other end of the contamination scale who are causing the problem.
Northern Ireland is on target to meet its 35% recycling target for 2010.
But if the figure for the amount of recycled materials shown as actually being dumped is subtracted it might be a very different story.
There is also the question of jobs and the economy. Many of the manufacturing processes using recycled materials depend on a steady flow of materials.
If these can't be relied on, then the viability of some companies becomes finely balanced.
So, environmental reasons aside, recycling properly is increasingly important to Northern Ireland.