Upcoming changes to pollution reporting will affect how Ofwat measures water companies’ performance from January 2026 - the regulator has launched a new consultation on proposals to change how it measures in response to significant changes in how the Environment Agency (EA) and Natural Resources Wales (NRW) record pollution incidents.

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.

Ofwat says these changes mean It is likely to 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

Currently Ofwat holds water companies accountable for pollution incidents through its performance commitments - the 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,” Ofwat says.

In England:

Ofwat proposes to move 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:

Ofwat propose to rank Dŵr Cymru against English companies, while reflecting the different approach to reporting in Wales.

For Hafren Dyfrdwy the regulator will remove financial penalties but the company will need to explain any changes in their performance annually.

What this means for environmental protection

Ofwat says the changes reflect a more thorough approach to monitoring pollution - and do not mean the regulator is lowering its standards.

Ofwat will be consulting on the 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.

The consultation is seeking views on Ofwat’s proposed changes to three performance commitments affected by updates to the Environmental Performance Assessment (EPA) methodology. The affected performance commitments are:

• total pollution incidents;
• serious pollution incidents; and
• discharge permit compliance.

Deadline to submit responses to the consultation on the proposed cghanges is 10 December 2025. Responses should be sent to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , with the subject ‘Response EPA changes’.

Click here to download Consultation on changes to three PR24 environmental performance commitments

Click here to download Consultation on changes to three PR24 environmental performance commitments – Annex: Draft performance commitment definitions