The management of produced water (PW) discharges from offshore oil and gas installations in the North Atlantic is under the auspices of OSPAR (Oslo/Paris convention for Protection of the Marine Environment of the North‐East Atlantic). In 2010, OSPAR introduced the risk‐based approach (RBA) for PW management. The RBA includes a hazard assessment estimating PW ecotoxicity using two approaches: whole‐effluent toxicity (WET) and substance‐based (SB). Set against the framework of the WET and SB approach, we conducted a literature review on the magnitude and cause of PW ecotoxicity, respectively, and on the challenges of estimating these. A large variability in the reported magnitude of PW WET was found, with EC50 or LC50 values ranging from <1% to >100%, and a median of 11% (n = 301). Across the literature, metals, hydrocarbons, and production chemicals were identified as causing ecotoxicity. However, this review reveals how knowledge gaps on PW composition and high sample and species dependency of PW ecotoxicity make clear identification and generalization difficult. It also highlights how limitations regarding the availability and reliability of ecotoxicity data result in large uncertainties in the subsequent risk estimates, which is not adequately reflected in the RBA output (e.g., environmental impact factors). Thus, it is recommended to increase the focus on improving ecotoxicity data quality before further use in the RBA, and that WET should play a more pronounced role in the testing strategy. To increase the reliability of the SB approach, more attention should be paid to the actual composition of PW. Bioassay‐directed chemical analysis, combining outcomes of WET and SB in toxicity identification evaluations, may hold the key to identifying drivers of ecotoxicity in PW. Finally, an uncertainty appraisal must be an integrated part of all reporting of risk estimates in the RBA, to avoid mitigation actions based on uncertainties rather than reliable ecotoxicity estimations. Integr Environ Assess Manag 2022;00:1–16. © 2022 The Authors. Integrated Environmental Assessment and Management published by Wiley Periodicals LLC on behalf of Society of Environmental Toxicology & Chemistry (SETAC).