Offshore wind - strategic compensation policy: business and regulatory impact assessment

Executive Summary

The policy has been developed to provide a more flexible and pragmatic approach to environmental compensation (referred to as compensation) requirements under the Habitats Regulations for offshore wind, unlocking barriers to offshore wind and its associated benefits and providing new opportunities for positive investment in Scotland’s marine environment.

The policy has been developed under the UK Energy Act 2023, which provides for amendments to the Habitats Regulations (and related matters) as they apply to relevant offshore wind activities. Therefore, the only option considered for implementing this policy is a regulatory approach with associated guidance.

This partial Business and Regulatory Impact Assessment (BRIA) provides a qualitative assessment of the impact of the policy on key impacted areas such as the offshore wind industry (including related business activities such as supply chain and manufacturing), commercial fisheries, other users of Scotland’s marine environment, and regulatory bodies. In summary, this qualitative assessment has concluded that:

• The policy will have positive impacts for the offshore wind industry and related businesses (e.g., supply chain businesses) as it will provide opportunities for a wider range of compensation to be secured for offshore wind development.
• The policy could have potential negative impacts on commercial fisheries due to the expansion of offshore wind development and the introduction of spatially defined compensatory measures.
• Other marine users (e.g., commercial shipping) may be impacted by the expansion of offshore wind development and spatial demands for compensatory measures, which will increase demand for use of marine space.

The policy will now be consulted on for a six-week period. The policy presented in this consultation has been informed by stakeholder engagement including a series of Scottish Government workshops held in the summer of 2024. These workshops were attended by representatives from a varied group of stakeholders and gathered views on proposed policy options for development.

Whilst this BRIA takes a qualitative approach given the scope of the policy, the Scottish Government has also recently completed a quantitative assessment of the potential impacts associated with Scotland’s wider offshore wind ambitions as part of developing the draft updated Sectoral Marine Plan for Offshore Wind Energy (SMP-OWE).

The draft updated SMP-OWE sets the strategic planning framework for the projects from the ScotWind and Innovation and Targeted Oil and Gas (INTOG) leasing rounds and an additional 1GW capacity for potential future Test and Demonstration projects and is currently out for consultation until 22 August 2025. Interested groups may also wish to consider the Social and Economic Impact Assessment and the partial BRIA developed as part of that consultation.

For completeness, this partial BRIA will be reviewed and updated as part of developing the final BRIA, to accompany the policy following completion of public consultation.