The smell of a thousand dirty yogurt pots pervades a small warehouse on the edge of Prague. As a loader busily shovels recycled plastic pellets into a silo, Jan Suchopar laughs and explains that while the scrubby grey matter that will be turned into transport pallets or road barriers may have been sorted and ground, it's also still unwashed.

The executive director of plastic recycling firm Stabilplastik also points out that it wasn't Czechs that threw out these yogurt pots, but Germans. Suchopar says his company is forced to import the pellets because a ton costs €100 ($104) in Germany but four to five times as much in the Czech Republic.

The reason for that is simple, says another Stabilplastik executive, Patrik Luxemberk. Although Czech households may have enthusiastically adopted the habit of depositing their waste in recycling bins — around 70% do so regularly — a vital step further down the line is missing.

Czech Ministry of the Environment data officially show that around 42% of plastic waste collected is recycled. Practically everyone else insists that the number is closer to 20%.

The problem, says Suchopar, is that the company contracted by the state to collect the waste, EKO-KOM, does not have the finances to properly sort and recycle it.

"We're trying to close the loop," says Suchopar. "We've spoken with the ministries, the waste collectors, the packaging producers. But it's like tilting at windmills."

EU fines for burning plastic

EKO-KOM holds a monopoly on collecting the contents of Czech recycling bins. But the fees that the firm collects from companies that flood the market with plastic packaging are only enough to cover the collection and basic sorting.

Pavel Zednicek from the Institut Cirkularni Ekonomiky (INCIEN) argues that PET bottles constitute around 20% of plastic waste and could be easily sorted and recycled, "making them competitive with primary materials."

"That's the key. Other plastics don't have the purity and are tricky to sort, so are mostly burned or put in landfills," the head of the institute, which promotes circular economic systems in Czechia, told DW.

The two Stabilplastik executives believe EKO-KOM could raise the fees it charges. However, the company is owned by the packaging producers, and they'd prefer to leave Czech taxpayers to pay the bill, they assert. "The EU imposes fines when sorted recyclable plastic waste is taken to a landfill or incinerated. Czechia is paying a fine of €800 per ton," said Luxemberk.

According to government data, Czechs threw over 264,000 tons of plastics into recycling bins in 2020. That suggests that, even at the ministry's contested recycling rate, around 150,000 ton was either exported, burned, or buried.

However, Jan Marsak, head of waste management at the Czech environment ministry, denies that fines are being paid. "We've reached all the targets," he claimed. "And we're on course to hit the new, stricter EU targets that will be in place from 2025," he told DW.

Brussels' strategy for plastics in the circular economy imposes a goal of recycling 60% of the 26 million tons or so of plastic waste generated annually in Europe by that date.

However, a source at the ministry, who wants to remain anonymous, told DW that Czechia is already paying some fines, and warns that much larger penalties are on the way. "We're struggling to meet the targets. It's a very sensitive topic among officials," the source said.

Prague had a recycling rate of just 30% last year. Despite having recently opened a new modern sorting facility, doubling that rate within three years is not going to happen, the source stated bluntly.

Nestle, others seek guarantee

Those responsible for implementing Czechia's circular economy refute the criticism from the likes of Stabilplastik. Marsak insists that while it's "possible" that some companies have to import materials, there are "lots of companies that use Czech recycled plastic waste."

And EKO-KOM insists that the system is running more than smoothly.

"There are not many activities in which we can unequivocally state that Czechs are among the top in Europe," the company said in a recent public statement that claimed the country is among the top six EU states in recycling rates. It accused critics like Stabilplastik of cherry-picking data to promote their own interests.

EKO-KOM is so happy with its performance that it recently decided to give its board members a raise. That was too much, however, even for some of its own shareholders.

"Since it is not possible to improve the low level of recycling in the Czech Republic … instead of increasing the remuneration of board members, we should spend the collected money on finding solutions to eliminate packaging waste, become fully circular and make our nature and communities clean," thundered Alexander Pasquale, owner of Mattoni 1873, Central Europe's biggest mineral water producer.

Nestle and some other multinational shareholders would also like to see a change,claims INCIEN's Pavel Zednicek. "They say they're willing to pay higher fees for a guarantee that their waste will be recycled. They have serious sustainability targets on which they have to report to investors and banks."

Activists and critics hint that it's not only the old yogurt pots that smell. They point to EKO-KOM's operations, and its financial relations with its shareholders, which are not at all transparent. 

Indeed, there's plenty of speculation regarding the "powerful groups" that run the Czech waste business. Although it's illegal to put plastics from recycling bins in landfill, it's an open secret that that's exactly where most of the contents of the yellow bins end up.

Marsak said that he does not see a lack of transparency in the waste industry, but noted that "the sector is sensitive, and of course, all industries have their interests."

Investments needed into recycling infrastructure

Stabilplastik's Jan Suchopar finds working within the Czech circular economy "extremely difficult," as high costs and uncertainty are compounded by a lack of investment in infrastructure and weak state support. He described prices of primary materials as "erratic" which "makes life tough for recyclers."

"Germany has policies in place to make the system more stable. It has higher investment into recycling infrastructure and mandatory content of recycling materials," he said.

That also means a tough sell for Stabilplastik at the other end of the recycling chain, as the company struggles to sell its pallets, which have an overall environmental impact 77% lower than that of traditional wooden rivals, at home. Of the 4,000 tons the company produces annually, 70% is exported to Germany, Scandinavia and other Western European countries.

Environment official Jan Marsak claims the ministry is working to improve the situation and that it has ambitious targets. However, he also noted that "the development of the circular economy involves lots of parties with many different interests."

Such ambivalence leaves campaigners like Pavel Zednicek convinced that the circular economy loop will only be closed by significant public pressure for which people would need reliable and accurate information. "People are told that Czechia is doing well in recycling. It's simply not true."

Edited by: Uwe Hessler