Offshore wind - strategic compensation policy: consultation

3. Enabling Wider Measures

Section 3 details the approach to enabling wider measures which would be implemented via the EAR SSI and guidance.

The UK Government’s concurrent consultation on reforms to environmental compensation for offshore wind is also proposing legislative changes in line with the below proposals. To respond to proposed legislative changes regarding wider compensatory measures that would apply to the Scottish offshore region, respondents should refer to the UK Government consultation.

To facilitate the delivery of offshore wind to progress toward Clean Power by 2030 and our net zero and nature targets in tandem, there is a need to address existing barriers to the availability of ecologically effective compensation for offshore wind. A more flexible approach to the identification of compensatory measures is required, to widen the range of appropriate compensatory measures beyond those which are currently permitted and are sometimes described in broad terms as ‘like-for-like’ measures (i.e. measures which are targeted at the impacted feature).

Widening the range of appropriate compensatory measures to those which address a pressure acting on the marine environment has the potential to deliver positive marine ecosystem benefits for the protected site network even if these benefits cannot be directly linked back to the targeted impacted feature by the relevant offshore wind plan or project.

The Scottish Government therefore proposes to amend the current requirement in the Habitats Regulations that necessary compensatory measures must be secured to ensure the overall coherence of the network is protected, in order to enable a wider range of measures. The proposed approach is set out below.

3.1 What are Wider Measures?

Wider measures are defined as compensatory measures that provide an ecological benefit to the protected site network as a whole rather than the specific feature impacted. Wider measures can add value by, for example, targeting a similar feature to the feature impacted or large scale pressures on the protected site network.

Under this proposed approach, for illustrative purposes, ‘similar features’ may be a protected site feature that is of a comparable type to the feature impacted e.g. for seabirds – if a surface feeding seabird is impacted than an alternative surface feeding seabird species which has a similar function or service might be deemed a similar feature. The appropriateness of a particular wider measure for a given impact on a protected site feature will always be considered on a case-by-case basis.

Under this proposed approach, for illustrative purposes, ‘large scale pressures’ may be activities, or mechanisms in which an activity is, impacting the protected site network at scale, e.g. across multiple sites. For example, physical impacts on habitats, input of materials or other activities impacting water quality, or climate change-related impacts.

When identifying appropriate compensatory measures, it is proposed that a compensation hierarchy be applied (see section 3.3 on the Compensation Hierarchy).

As set out in the UK consultation, in England wider compensatory measures must be approved by the Defra Secretary of State and entered into the Library of Strategic Compensatory Measures (LoSCM). It is expected that wider measures should then be delivered through the UK Marine Recovery Fund (MRF). Scottish Government are minded to provide offshore wind developers with the flexibility to propose and deliver wider measures themselves, including where those measures would qualify as strategic compensation (see section 1.3 on Strategic Compensation).

3.2 Proposed Changes in the EAR SSI

To enable wider measures, we are considering amending the Habitats Regulations to require that:

• compensatory measures which benefit the protected site network overall must be secured for relevant offshore wind activities (as defined in the Energy Act 2023); and
• the ecological benefit of those compensatory measures must be reasonably proportionate to the level of damage to the protected site network.

We are also considering the introduction of a compensation hierarchy which could be referenced in the EAR SSI with the detail included in guidance. Further detail on the compensation hierarchy can be found in section 3.3. Guidance would set out the circumstances in which it may be appropriate to move down the compensation hierarchy to wider measures e.g. where there is justification that moving down the hierarchy to a wider measure will have a greater ecological benefit on the protected site network.

We propose including the policy detail on wider measures in guidance that will be applicable to the Scottish inshore region (which would provide guidance in relation to the EAR SSI) and to the Scottish offshore region (which would provide guidance in relation to the UK SI).

3.3 Compensation Hierarchy

To accompany the enabling of wider measures as set out in sections 3.1-3.2 a3.1 What are Wider Measures?bove, we are proposing a compensation hierarchy which offshore wind developers would be required to step through. The proposed approach to the compensation hierarchy is set out below.

We have developed the below proposed compensation hierarchy through collaborative work with the UK Government and with input from Scottish stakeholders from targeted workshops held in Summer 2024. The hierarchy outlines a three-tiered compensation hierarchy that describes the types of compensatory measures that should be considered at each tier and includes high level examples.

3.3.1 Tier 1 – Benefit to the Impacted Feature

Tier 1 of the compensation hierarchy would be compensatory measures that provide ecological benefit(s) for the impacted feature in a measurable way, i.e. where there is clear evidence that the intervention will be effective in benefiting the impacted feature.

The following points in relation to location should be considered in sequence:

• Does the measure benefit the impacted feature at the impacted site?
• Does the measure benefit the impacted feature at a different site inside the protected site network?

When considering measures that target the impacted feature there may be circumstances where interventions at a different location are more effective than at the impacted site. Ecological effectiveness of the measure needs to be considered alongside a preference for measures that take into account local conditions.

For example, if Atlantic Puffin was the impacted feature, compensation could be predator reduction for Atlantic Puffin.

3.3.2 Tier 2 – Benefit to a Similar Feature

Tier 2 of the compensation hierarchy would be compensatory measures that provide sufficient evidence of ecological benefit(s) to features, or groups of features which are ecologically similar to the impacted feature. For example, if a surface feeding seabird is impacted, then a similar feature would be a similar surface feeding seabird species. Likewise for habitats, a similar feature would be a similar large scale habitat which has similar functions or services.

Consideration should be given to the functions and location of the feature that is being impacted and how well this is matched by a proposed measure (e.g. an ecologically similar but different habitat feature that also provides suitable function to that of the impacted feature including in terms of fish spawning).

These types of measures could be delivered alongside measures directly targeted at the impacted feature, or they could be delivered individually due to a lack of measures targeted directly at the impacted feature or if it can be justified that the measure will deliver greater ecological benefits to the protected site network.

For example, if Atlantic Puffin was the impacted feature, compensation could be predator reduction for another Auk e.g. Razorbills at a different site. This could be delivered as part of a package alongside a predator reduction measure for Atlantic Puffin at the impacted site or if there were insufficient Tier 1 compensatory measures available to compensate for the level of impact then the measure could be delivered on its own.

3.3.3 Tier 3 – Benefit to Protected Site Network

Tier 3 of the compensation hierarchy would be compensatory measures that provide sufficient evidence of ecological benefit(s) to the protected site network more widely.

For example, benefit could be delivered to the protected site network more widely by targeting large scale pressures that impact a number of protected features or sites, or conservation objectives of another protected feature of the protected site network which may have no link to the impacted feature e.g. measurable wider improvements in water quality, and restoration of habitats in other sites.

These types of measures could be delivered alongside measures targeted directly at the impacted feature or a similar feature. They could be delivered individually if there is a lack of measures targeted at the impacted feature or a similar feature, or if it can be justified that the measure will deliver greater ecological benefits to the protected site network.

For example, if Atlantic Puffin was the impacted feature, compensation could be funding a water quality improvement programme or delivering a habitat restoration programme, both of which are designed to address broader pressures on protected features in the network.

3.3.4 Flexibility in the Compensation Hierarchy

We propose permitting some flexibility in stepping through the hierarchy. Specifically, it would be permissible to use a Tier 2 measures even if there are Tier 1 available or Tier 3 even if there are Tier 1 or 2 available, if there is evidence that a wider measure would have a greater ecological benefit on the protected site network than a measure above it in the compensation hierarchy.

3.4 Evidencing Wider Measures

We also propose setting out in guidance how wider measures can benefit the protected site network and how this benefit can be demonstrated.

For wider measures, we propose clarifying that the protected site network can be benefited via action that:

• enables the network, or a feature or features within it, to recover more quickly from damage and/or improve its current condition; or
• alleviates key pressures impacting the network; or
• improves the networks resilience to climate change and other stressors; and
• can be monitored for effectiveness (monitoring could be action-based or outcomes-based).

If concluding that a wider measure is appropriate, the Scottish Ministers should ensure there is sufficient evidence to demonstrate that the compensation hierarchy approach has been followed (Tier 1 to Tier 3).

There should be evidence demonstrating that a measure will deliver ecological benefit to either the impacted feature directly (Tier 1), to a feature similar to the impacted feature[s] (Tier 2), or to the protected site network (Tier 3).

Proposals to use wider measures should be informed by best available scientific evidence, which could be in the form of showing consideration of a logical case based on well understood ecological principles and their applicability to the Scottish environment, by hypotheses based on expert advice and/or existing monitoring information. We would expect to see evidence that demonstrates measurable benefit, along with an assessment of uncertainty, and that the expected outcome relates to the feature the measure is targeted at, or if a measure under Tier 3 of the compensation hierarchy, to the protected site network.

Whether a wider measure has a greater ecological benefit than measures available for the impacted feature is likely to be assessed on a case-by-case basis. This would include consideration of the ecological benefit to the protected site network and factors such as whether the wider measure can:

• Provide a direct or indirect benefit, via the improvement of conservation objectives, to a larger proportion of the network. This may be by number of protected sites, area of benthic habitat, number, or proportion of species population, than would benefit from available compensatory measures that would be targeted at the impacted feature.
• Alleviate pressure on more than one site within the network, or on a number or population of species than would benefit from available compensatory measures for the impacted feature.

It is proposed that extra contingency be built in for more uncertain measures where there is limited scientific evidence. This could include a higher compensation ratio, enhanced adaptive management (AM) plans (see section 4.8 on Adaptive Management), enhanced monitoring or building in additional time to allow for measures to show effectiveness. Ultimately, it is for Scottish Ministers to be satisfied having considered proposals and all relevant advice.

At project-level if it is proposed to move down the hierarchy to a wider measure on the basis that this will have a greater ecological benefit on the protected site network, the applicant should clearly set out their justification in their section 36 consent or marine licence application. All evidence relating to wider measures should be provided within the project’s compensation plans.

At plan-level, if the plan authority proposes moving down the hierarchy to a wider measure, the justification for this must be clearly set out to Scottish Ministers approving the plan and included in the consent applications for the projects forming the plan.

3.5 Application to the Marine (Scotland) Act 2010

The Energy Act 2023 also gives the Scottish Ministers powers to amend the Marine (Scotland) Act 2010 in addition to the Habitats Regulations. Taking this approach would potentially mean that the Measures of Equivalent Environmental Benefit (MEEB) test underpinning Marine Protected Area assessments would be removed and aligned with the proposals to enable wider measures set out above to support a consistent approach to compensatory measures across environmental impact assessments for offshore wind. The Scottish Government is not currently minded to extend the policy set out in this consultation (including proposed legislative amendments) to the Marine (Scotland) Act 2010. However, we would welcome views on whether this approach should be taken.

3.6 Additionality

Under the Habitats Regulations, the principle of additionality means that compensation must be additional to the normal practices required for the protection and management of projected sites. Measures that are already being or will be undertaken by government bodies to ensure a site is in favourable conservation status or that protected features are in favourable condition should not be considered as compensation. It is within the remit of Statutory Nature Conservation Bodies (SNCBs) to provide information on planned management activity to help offshore wind developers avoid additionality conflicts.

The UK Government is exploring potential ways to provide clarity around the additionality principle and create more opportunities to facilitate progress towards conservation objectives at protected sites in the marine environment. More specifically, the UK Government is aiming to provide clarity on what is additional by outlining how normal practice for site management measures should be identified.

The Scottish Government already permits investment in site management measures where they might not otherwise be delivered, for example, where Government is not able to act. However, we are considering providing clarification on this in guidance and possibly in legislation to provide certainty for offshore wind developers and other stakeholders.