Summary
What does environmental non-compliance cost in 2026? In May 2025, Ofwat fined Thames Water £122.7 million for wastewater failures and dividend payments, the largest penalty ever imposed on a UK water company. Elsewhere the exposure varies: up to EUR 50,000 per violation under Germany’s BImSchG, $124,426 per day under the US Clean Air Act, C$10 million for a first greenwashing violation in Canada, and £300,000 or 10% of global turnover from the UK’s CMA. First action: map which of these regimes covers your sites, products and claims, then check the next deadline, California SB 253 on November 10, 2026.
Not legal advice. This article is general information for businesses, based on official sources checked in October 2026. Laws, thresholds and deadlines change, and how they apply depends on your company’s facts. Check the current text of each law or ask a qualified lawyer before you act.
Thames Water serves around 16 million customers across London and the Thames Valley. For years, its sewage spills made headlines, and for years most businesses read those headlines as a water industry problem.
Then the regulator acted.
On 28 May 2025, Ofwat announced penalties totalling £122.7 million after two investigations, one into wastewater compliance and one into dividend payments. The case matters far beyond water. It shows a regulator looking at how a company runs its compliance systems and how it treats its shareholders, not only at individual spills. This guide compares what that kind of enforcement looks like in Germany, the UK, the US and Canada.
What Did Ofwat Fine Thames Water For?
Ofwat fined Thames Water £122.7 million in May 2025 for failures in its wastewater operations and for dividend payments that breached its licence. Multiple outlets reported it as the largest fine ever imposed on a water company. Check Ofwat’s own announcement for the exact breakdown before quoting figures.
Two points stand out for any business. First, the penalty followed investigations of governance, not just of pollution events. Second, the dividend investigation tested Condition P30 of the company’s licence, which links shareholder payouts to performance. A regulator that checks both the environmental record and the cash leaving the company changes the risk picture for boards.
What Do Environmental Fines Look Like in Each Market?
Penalties differ sharply by country, so one number never tells the whole story. The table below sets the main regimes side by side as of November 2026.
| Market | Rule and Enforcer | Maximum Penalty | Key Date |
|---|---|---|---|
| Germany | Bundes-Immissionsschutzgesetz (BImSchG), enforced by the state authorities | Up to EUR 50,000 per violation; criminal liability under Sections 324 to 330d of the Criminal Code for serious cases | Ongoing |
| Germany | Lieferkettensorgfaltspflichtengesetz (LkSG), enforced by BAFA | Up to EUR 8 million, or up to 2% of average annual turnover for companies above EUR 400 million | Applies to 1,000+ employees in Germany; BAFA annual report abolished |
| EU | Corporate Sustainability Reporting Directive (CSRD), enforced by Member States | Set by each Member State | Applies above 1,000 employees and EUR 450 million turnover; second wave reports in 2028; transposition by March 19, 2027 |
| EU | EU Emissions Trading System (EU ETS) | EUR 100 per tonne of excess CO2, adjusted for inflation, plus the duty to surrender the allowance | Maritime coverage 100% from 2026 |
| UK | Environmental Permitting Regulations 2016, enforced by the Environment Agency | Unlimited fines in the Crown Court for serious breaches | Ongoing |
| UK | Digital Markets, Competition and Consumers Act 2024, enforced by the CMA | Up to £300,000 or 10% of global turnover, whichever is higher | Direct fining since April 6, 2025 |
| US | Clean Air Act, enforced by the EPA | Up to $124,426 per day per violation | Ongoing |
| US | Clean Water Act, enforced by the EPA | Up to $68,445 per day per violation | Ongoing |
| US | California SB 253, enforced by CARB | Up to $500,000 per reporting year | First reports due November 10, 2026 |
| Canada | Competition Act greenwashing provisions, enforced by the Competition Bureau | C$10 million for a first corporate violation, or three times the benefit, or 3% of worldwide revenue | Private actions since June 20, 2025 |
| Canada | Fighting Against Forced Labour and Child Labour in Supply Chains Act (S-211), overseen by Public Safety Canada | Fines up to C$250,000 | Report due May 31 each year |
How Does Germany Punish Environmental Breaches?
Germany combines administrative fines with criminal law. State authorities enforce the BImSchG and the Kreislaufwirtschaftsgesetz (KrWG), which allow fines of up to EUR 50,000 and EUR 100,000 per violation respectively. Intentional or serious cases can reach prosecutors under the Criminal Code, and individuals can face prison.
Supply chains add a second layer. The LkSG applies to companies with 1,000 or more employees in Germany, and BAFA can request records and investigate complaints. The annual BAFA report has gone, but the duty to run a risk analysis and keep documentation stays. Our guide to ESG non-compliance penalties explains how these fines stack with EU rules.
What Changed in EU Reporting Penalties After Omnibus I?
The EU cut the number of companies in scope, but it did not remove the penalties. Omnibus I, Directive (EU) 2026/470, limits the CSRD to companies with more than 1,000 employees and more than EUR 450 million in net turnover. Member States set the penalties, so a German group and a French group can face different fines for the same failure.
The Corporate Sustainability Due Diligence Directive (CSDDD) now applies from July 26, 2029 to companies with more than 5,000 employees and more than EUR 1.5 billion in turnover. Fines can reach 3% of net worldwide turnover. The EU ETS keeps its own penalty of EUR 100 per tonne of excess emissions, and from 2026 it covers maritime shipping in full.
How Hard Does UK Enforcement Hit?
UK enforcement now works through two channels. The Environment Agency, SEPA and Natural Resources Wales enforce permits under the Environmental Permitting Regulations 2016, and courts can impose unlimited fines for serious breaches. Sector regulators such as Ofwat add their own powers, as the Thames Water case shows.
The second channel is consumer law. Since April 6, 2025, the Competition and Markets Authority can fine businesses directly, up to £300,000 or 10% of global turnover, for misleading environmental claims. Read our UK environmental regulations guide for the permit side of the picture.
What Penalties Apply in the United States?
The US relies on daily penalties that add up quickly. The Environmental Protection Agency (EPA) can seek up to $124,426 per day per violation under the Clean Air Act and up to $68,445 per day under the Clean Water Act. A violation that runs for 30 days under the Clean Air Act can therefore pass $3.7 million before any settlement talks.
Climate reporting adds a state-level risk. California SB 253 requires US-organized companies with more than $1 billion in revenue that do business in California to report Scope 1 and Scope 2 emissions by November 10, 2026, and the California Air Resources Board (CARB) can assess up to $500,000 per reporting year. The federal SEC climate rule is stayed, so California is the binding rule today. Our carbon reporting requirements guide covers the details.
What Penalties Apply in Canada?
Canada penalises misleading green claims and weak supply chain reporting. The Competition Act sets greenwashing penalties of up to C$10 million for a first corporate violation, or three times the benefit, or 3% of worldwide revenue. Since June 20, 2025, private parties can seek leave from the Competition Tribunal to bring cases.
Under S-211, producers and importers that meet two of three size tests (C$20 million in assets, C$40 million in revenue, 250 employees) must file a report by May 31 each year. Fines reach C$250,000. The Competition Bureau’s guidance on environmental claims explains what substantiation it expects.
What Should You Do Before the Next Deadline?
Start with an honest map of your exposure, then close the gaps in order of deadline. Thames Water shows that boards, not just site managers, carry the risk.
- Map your regimes: List every site, product line and claim against the table above
- Check permits: Confirm expiry dates and monitoring for each permit in Germany, the UK, the US and Canada
- Meet November 10, 2026: Decide whether California SB 253 applies, and file Scope 1 and Scope 2 if it does
- Audit green claims: Remove generic terms such as “eco-friendly” unless you can prove them, since the EU ban applies from September 27, 2026
- Calendar the filings: Put S-211 (May 31), EUDR (December 30, 2026) and the CSRD transposition date (March 19, 2027) into one compliance calendar
- Give the board a report: Present a short compliance status at least twice a year and record the discussion
Environmental Non-Compliance Penalty Checklist (2026)
- [ ] Permits reviewed, with expiry dates and monitoring checked
- [ ] CSRD scope tested against 1,000 employees and EUR 450 million turnover
- [ ] California SB 253 applicability decided before November 10, 2026
- [ ] Green claims audited against the CMA code, the EU ban and the Competition Bureau guidance
- [ ] EU ETS exposure and surrender duties calculated where relevant
- [ ] LkSG and S-211 applicability confirmed and documented
- [ ] Board-level compliance reporting in place
Frequently Asked Questions
What was Thames Water fined in 2025?
Ofwat fined Thames Water £122.7 million in May 2025 after two investigations, one into wastewater compliance and one into dividend payments. It was the largest penalty Ofwat had imposed on a water company.
What is the maximum fine for environmental breaches in the UK?
Courts can impose unlimited fines for serious permit breaches under the Environmental Permitting Regulations 2016. The CMA can separately fine up to £300,000 or 10% of global turnover for misleading green claims.
What are the penalties for CSRD non-compliance?
Each EU Member State sets its own penalties, so amounts differ by country. Since Omnibus I, the CSRD covers only companies above 1,000 employees and EUR 450 million in net turnover. Check how your Member State has transposed the changes.
What does California SB 253 cost if I miss the deadline?
CARB can assess up to $500,000 per reporting year. The first Scope 1 and Scope 2 reports are due November 10, 2026. Check CARB’s current guidance on how it will treat first-cycle filings.
How much can Canada fine for greenwashing?
Up to C$10 million for a first corporate violation, or three times the benefit, or 3% of worldwide revenue. Private parties have been able to seek leave to bring cases since June 20, 2025.
Can German authorities fine a company and prosecute its managers?
Yes. Administrative fines under laws such as the BImSchG can run alongside criminal proceedings under the Criminal Code for serious or intentional violations, and individuals can face prison.
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