Understanding the upcoming changes to pollution reporting
The Environment Agency (EA) and Natural Resources Wales (NRW) have published significant changes to how they record pollution incidents. These changes will affect how we measure water companies’ performance from January 2026. We want to explain what’s happening and why it matters.
What’s changing?
From 2026, the environmental regulators will be counting pollution incidents differently under their new Environmental Performance Assessment (EPA) methodology and Water Industry Regulation Incidents (WIRI) guidance in England. There are three main changes:
- Stricter classification: Water companies will no longer be able to downgrade category 3 pollution incidents to category 4 using “no impact claims”. This applies in both England and Wales and means any pollution entering waterways will be categorised as at least a minor impact incident.
- Enhanced monitoring in England: Spills detected by monitoring equipment on dry days will now count as pollution incidents. This change currently applies to England only.
- Enhanced rating system: The EA and NRW are also introducing a new 5-point numeric rating system (1-5) replacing star ratings, with companies rated from ‘Excellent’ to ‘Failing’ based on performance metrics.
These changes mean we’ll likely see a significant increase in the number of recorded pollution incidents, not because performance has worsened, but because monitoring has become more comprehensive.
Why this matters for performance measurement
At Ofwat, we hold water companies accountable for pollution incidents through our performance commitments. Our targets were set based on the previous methodology for recording incidents.
With the new reporting methodology, it would be unfair to measure companies against targets that were set using different rules. It would be like changing how we score goals in football halfway through a match.
How we’re responding
We’re updating our approach to ensure fair and effective regulation:
In England:
- We propose moving to a ranking system that compares companies to each other, rather than to fixed targets.
- This focuses on which companies are performing better than others, regardless of the reporting method.
In Wales:
- We propose ranking Dŵr Cymru against English companies, while reflecting the different approach to reporting in Wales.
- For Hafren Dyfrdwy we’ll remove financial penalties but the company will need to explain any changes in their performance annually.
What this means for environmental protection
These changes don’t mean we’re lowering our standards. In fact, they reflect a more thorough approach to monitoring pollution.
By improving how incidents are recorded, we get a more accurate picture of what’s happening in our waterways. This transparency helps drive real improvements in water quality over time.
The goal remains the same: fewer pollution incidents and cleaner rivers and seas.
Next steps
We’ll be consulting on these changes in detail and working closely with water companies, environmental regulators and other stakeholders to implement them effectively. The new methodology applies to data collected from 1 January 2026, with the first reports under the new system released in 2027.
For full details, please see our consultation document: Consultation on changes to three PR24 environmental performance commitments