<p>Many countries’ laws stipulate compensation from responsible parties for environmental damage events, while the amount of environmental damage is commonly determined through environmental damage valuation. However, in the process of quantifying environmental damage, there are often cases where the facts of the environmental damage are unclear, the ecological environment has naturally recovered, the restoration efforts cannot fully restore the ecological damage, or the cost of restoration projects far exceeds their benefits. In response to these situations, China implemented Technical Guidelines for Identification and Assessment of Ecological Environment Damage Part 2: Water Pollution Virtual Disposal Cost Approach (GB/T 39793.2–2020) in 2021. This approach calculates the amount of damage to surface water environments. However, the practical application issues such as the inconsistent scope, inaccurate calculation of unit treatment costs, and biased parameter selection still exist. This study, based on GB/T 39793.2–2020 and combined with a case of illegal oil discharge, illustrated how to avoid common mistakes in practical application and calculated the amount of environmental damage, using a new method to calculate unit treatment costs. The results showed that the unit treatment cost for oil removal and wastewater cleaning was approximately 74.1 yuan/ton, and the environmental damage from illegal wastewater discharges amounted to approximately 186,000 yuan. This study will advance research on the virtual disposal cost approach to water pollution and provide crucial technical references for future ecological environment damage assessments.</p> Graphical Abstract <p></p>