Offshore wind - strategic compensation policy: strategic environmental assessment - post adoption statement

6 Reasons for Selecting the Strategic Compensation Policy for Offshore Wind as Adopted

6.1.1 The 2005 Act requires that the Scottish Government identify, describe and evaluate the likely significant effects on the environment of any reasonable alternatives to the plan or programme, taking into account its objectives and geographical scope. Each of the options for the principles under consideration were assessed and were all equally weighted. The overarching option of ‘do nothing’ (i.e., not to implement the Strategic Compensation Policy) was also considered as a reasonable alternative. Without the implementation of the Strategic Compensation policy, there is a risk that consenting of offshore wind is delayed and that compensatory measures do not have the largest possible benefit to the marine environment. This would potentially impact delivery of biodiversity and climate change targets.

6.1.2 Following the comments made by respondents to the 2025 Environmental Report^[17], Scottish Government developed the final Strategic Compensation Policy for Offshore Wind and the principles to be included.

6.1.3 The finalised Strategic Compensation Policy for Offshore Wind, to be implemented through a SSI and associated guidance, was developed in line with Scottish Government ambition to maximise the opportunities of the Energy Act to enable offshore wind delivery whilst also maximising opportunities for nature.

6.1.4 As set out in Section 5.1.3, with regard to the overarching proposed reformed approach to the Habitats Regulations for offshore wind, responses ranged from supportive, supportive with conditions to challenging. Many respondents highlighted the need for ecologically relevant safeguards and robust and transparent governance and decisions making processes.

6.1.5 Scottish Government remains committed to a proportionate and balanced approach to the reforms that supports offshore wind while protecting the marine environment. Scottish Government supports the view that enabling greater flexibility in the delivery of compensatory measures will help enable environmental benefits without introducing unnecessary barriers to offshore wind delivery, which is essential for meeting net zero and combatting the climate crisis. Scottish Government’s approach is intended to be clear, transparent and supportive of broader nature recovery. The finalised approach also intends to align closely with the associated reforms being taken forward by the UK Government to enable UK-wide policy alignment.

6.1.6 As such, the OW EAR SSI will be laid in the Scottish Parliament to deliver reforms to the Habitats Regulations as they apply to offshore wind in the Scottish inshore region (0-12 NM). In parallel the UK SI will provide reforms that apply in the Scottish offshore region (beyond 12 NM). The intention is that the SI and SSI will achieve mirror reforms as far as possible.

6.1.7 The following options from Table 1 will be taken forward by Scottish Government in the final Strategic Compensation Policy:

• Defining the Network: Option B – Network means all MPAs;
• Overall Coherence: Option C – All MPAs;
• Selecting Compensatory Measures: Option D – Measures do not need to directly link to the feature impacted, but need to follow a ‘selection framework’; and
• Additionality for Compensation: Option A – Maintain requirement for additionality.

6.1.8 As set out in Section 4.1.11 potential adverse effects were identified from Option B of the ‘overall coherence’ principle if taken forward (where obligations for ‘coherence of the network’ are reduced). This principle is not being taken forward by Scottish Government.

6.1.9 Respondents to the consultation called for guidance on the reforms to be clear and more expansive on the detail of the proposals set out in the consultation. The Scottish Government will release statutory guidance, once the legislation comes into force, which will provide offshore wind developers and delivery partners in Scotland with practical guidance to support them in applying the UK wide Habitats Regulations reforms in practice.

6.1.10 The reforms to be set out in the OW EAR SSI will amend the compensation requirements under the Habitats Regulations for offshore wind so that compensatory measures which benefit the UK MPA Network overall must be secured for relevant offshore wind activities (as defined in the Energy Act 2023); and that the ecological benefit of those compensatory measures must be reasonably proportionate to the level of damage to the network. The MPA network will include SACs, SPAs, Sites of Special Scientific Interest (SSSIs), and all MPAs (e.g., Nature Conservation MPAs (NCMPAs) and Marine Conservation Zones (MCZs)).

6.1.11 Scottish Government considered the comments received in the consultation for alternative terms to use in the reformed compensation test such as ‘reasonably commensurate’. Considering options, the term of ‘reasonably proportionate’ was ultimately decided upon as it is considered to provide the maximum flexibility and creating a flexible and practical approach to compensation is a key aim of the reforms.

6.1.12 Scottish Government recognise some of the concern raised that the term ‘reasonably proportionate’ potentially suggests that socio-economic considerations would be included in the judgement of proportionality which could result in environmental regression. The guidance will therefore be explicit that the reasonably proportionate test is only based on environmental considerations.

6.1.13 In the consultation there were calls for clarity on how to assess whether a compensatory measure is reasonably proportionate to the damage to the network caused and how to demonstrate ecological benefit to the network. Scottish Government also understand calls for this to be proportionate but also ecologically relevant. What is considered to be reasonably proportionate will be case-specific, but guidance will provide a clear framework on how this will be assessed.

6.1.14 Consistent with the approach taken to consultation, and in response to respondents’ desire for strong environmental safeguards, Scottish Government propose that when seeking to secure a wider compensatory measure, the compensation hierarchy must be followed. A legislative requirement for a compensation hierarchy will be included in the SSI with further detail on practical application of the hierarchy to be set out in guidance. Guidance will provide information to help developers and plan promoters understand what is needed to justify moving through the compensation hierarchy to wider measures.

6.1.15 In response to views highlighting the importance of the mitigation hierarchy being applied for proposed offshore wind developments, guidance will set out the requirement of the mitigation hierarchy as a critical safeguard, which must be applied fully and sequentially before the derogation stage. The requirement to first consider whether damage can be avoided, then reduced, then mitigated, remains essential.

6.1.16 The consultation also asked whether the proposed reforms should be extended to the Marine Scotland Act with implications of aligning the Measures of Equivalent Environmental Benefit (MEEB) test within offshore MPA assessments with the new wider compensatory measure test under the reformed Habitats Regulations. Following consideration of consultation responses and further engagement with UK Government, other Devolved Governments and SNCBs, the decision was made that the proposed legislative changes will only be made to the requirement for compensatory measures in the Habitats Regulations. There will be no changes to offshore MPA assessments and the MEEB approach under the Marine Scotland Act.

6.1.17 As consulted on, Scottish Government will also not be introducing an approach whereby wider compensatory measures would not be permitted for ‘Marine Irreplaceable Habitats’, as was consulted on by the UK Government in its associated consultation. Guidance however will clarify the justification for this, which is because this is not a policy used in Scottish planning or consenting, therefore it would not be sensible to introduce a restriction for wider measures in relation to this.

6.1.18 With regard to the identification and implementation of strategic compensatory measures:

• The SEA assessed two policy options with regard to additionality. Option A was to maintain additionality and define ‘normal practice’ and Option B was to remove the requirement for additionality. Option A will be taken forward and clarity on additionality requirements will be provided in guidance.
• The SEA assessed two policy options with regard to the timing of compensation. Option A was that measures should be in place and operational at the time damage occurs and Option B that measures do not need to be in place at the time damage occurs, but that overcompensation would be required. Option B will be taken forward and clarity on overcompensation requirements will be provided in guidance.

6.1.19 The SEA assessed two policy options with regard to adaptive management. Option A was that potential alternative options should be considered and detailed at the start of proposing measures and Option B was that alternative actions can be decided on following a review of monitoring data and the decision to implement adaptive management. Option A will be taken forward and clarity on adaptive management will be provided in guidance.

6.1.20 As set out in the consultation, Scottish Government will clarify and set out expectations around dealing with small impacts and overcompensation.

6.1.21 Calls for effective, robust, ecologically relevant and transparent monitoring was a key theme in the consultation responses. As consulted on, the SSI will set out a requirement for a review of the SSI and guidance every five years.

6.1.22 The SEA assessed two policy options with regard to monitoring measures. Option A was that benefits to impacted features must be monitored and Option B was for a monitoring tiered system whereby (1) benefits to the impacted features must be adequately monitoring but where this is not possible, then (2) progress toward another objective of the measure must be monitored, for example progress toward achieving Good Environmental Status (GES) under the Marine Strategy. Option 2 will be taken forward, and guidance will clarify Scottish Government expectations for monitoring of strategic compensatory measures including how monitoring will play a role in governance and decision-making processes.

6.1.23 In relation to monitoring measures, as consulted on, Scottish Government continues to support a UK-wide compensation register and will continue to explore options for such a mechanism with the UK Government and other devolved governments.

6.1.24 Many respondents to the consultation highlighted the importance of robust, transparent, fair and equal governance and decision making for the implementation of strategic compensatory measures.

6.1.25 Scottish Government is developing a governance framework for delivering strategic compensation in Scotland. Scottish Government will continue to engage with stakeholders on the development of a robust, clear and streamlined approach to governance. This is intended to align governance and monitoring processes with wider planning and consenting processes to ensure as simple and as clear a process as possible. Scottish Government will continue to explore options for the establishment of a technical advisory group, as consulted on, which could provide support on selection and implementation of strategic compensation for offshore wind in Scotland.

6.1.26 Scottish Government acknowledges the concerns raised by fishing industry representatives through the consultation about cumulative spatial pressures from offshore wind on the fishing sector and how the proposals to widen compensatory measures could increase restrictions and pressures on the sector. Scottish Government will engage and work with the fishing sector to fully understand potential impacts of strategic compensation delivery on the sector. This impact will be assessed through a separate piece of work to develop a Scottish Portfolio of Strategic Compensatory Measures, with research projects being undertaken to understand the practical feasibility, benefits and impacts of potential strategic compensatory measures, including the impacts of measures on local communities and other marine industries.

6.1.27 The outcomes of these projects will be made available to offshore wind developers and other interested stakeholders in due course. The projects will form the evidence base of potential strategic measures and will inform what measures are selected by Government to be included in the Scottish Portfolio of Strategic Compensatory Measures and those which may be delivered through a Scottish Marine Recovery Fund.

6.1.28 The Scottish Government is committed to work in partnership with stakeholders to assess the impacts of specific compensatory measures as they are further defined, to ensure they are successful, have the greatest ecological benefit possible and wherever possible that they avoid any negative or unintended consequences. It is recognised that, where appropriate, individual compensatory measures, especially those at a large scale may need to undergo further assessment of specific impacts and targeted stakeholder engagement.

6.1.29 Scottish Government maintains that the delivery of strategic compensation and wider compensatory measures will maximise environmental benefit and nature restoration opportunities whilst enabling offshore wind delivery in Scotland and its benefits for the Scottish economy and the environment.