Offshore wind - strategic compensation policy: strategic environmental assessment

Non-Technical Summary

Introduction

Globally, twin reinforcing crises are being faced; climate change acts as a contributor to biodiversity loss, and biodiversity loss will exacerbate the climate crisis^[1]. The Scottish Government has set out its commitment to addressing these twin crises in two plans: the Scottish Biodiversity Strategy^[2] and Scotland’s Climate Change Plan^[3]. This commitment is supported by the policy principles in Scotland’s National Planning Framework 4 (NPF4) which aims to facilitate development that addresses the global climate emergency and nature crisis, resulting in a policy outcome of zero carbon, nature positive spaces^[4].

Scotland holds an abundance of renewable energy resources and a key component for meeting Scotland’s net zero targets is further offshore wind development. Seabed leasing rounds for offshore windfarms were launched by Crown Estate Scotland (CES) in 2022 and 2023, known as ScotWind and Innovation and Targeted Oil and Gas (INTOG). Scottish Government’s Offshore Wind Directorate (OWD) is updating the Sectoral Marine Plan for Offshore Wind Energy (SMP-OWE) to take account of these leased capacities and to set out a strategic framework for delivery of offshore wind in Scotland^[5].

To help address the global climate emergency and nature crisis, the Strategic Compensation Policy for Offshore Wind (hereafter referred to as the ‘Strategic Compensation Policy’) is being developed by the Scottish Government to introduce amendments to the process for how compensatory measures can be identified and implemented under the Habitats Regulations for offshore wind plans and projects in Scottish waters. This policy is being developed in close collaboration with the UK, Wales and Northern Ireland Governments. The agreed policy will underpin new UK Government and Scottish Government Legislative Instruments. The Scottish Government will also release statutory guidance which will provide offshore wind developers and delivery partners in Scotland with practical guidance to support them in putting the legislative reforms to the Habitats Regulations into practice. The Strategic Compensation Policy aims to support:

• The protection of the marine environment and maximisation of environmental enhancement and restoration opportunities at a pace to meet Scottish Government 2030 and 2045 biodiversity and climate change targets, through blended effort across the public and private sectors; and
• A coordinated approach to the implementation of compensatory measures so they have the largest possible benefit for the environment and so that securing compensatory measures is not a limiting factor to consenting offshore wind.

The spatial extent of the Strategic Compensation Policy is the Scottish inshore region (0 – 12 NM) and the Scottish offshore region (12 – 200 NM), with specific focus being on offshore wind developments. It is recognised that whilst the spatial extent of the policy relates to the above, compensation measures could come forward beyond these areas. For example, compensation measures could take place on land, or outside of Scotland/Scottish waters. The Strategic Compensation Policy has not yet been implemented, and this SEA assesses options for the principles within the policy.

What is Strategic Environmental Assessment?

The Environmental Assessment (Scotland) Act 2005 (“the 2005 Act”) requires that certain public plans, programmes and strategies be assessed for their potential effects on the environment. Strategic Environmental Assessment (SEA) is the process used to fulfil this requirement and includes consultation with the public and the Consultation Authorities.

SEA identifies the likely significant environmental impacts of plans and policies and proposed reasonable alternatives to them. SEA also identifies mitigation measures that are required to avoid or minimise any significant adverse effects and highlights opportunities for enhancements of beneficial effects. Taking place at an early stage in the plan or policy preparation process, it ensures that decision-making is informed by relevant environmental information. SEA provides opportunities for the public to consider this information and use it to inform their views on the draft plan or policy. In accordance with the 2005 Act and Scottish policy, Scottish Ministers are committed to applying the SEA process as part of the development of the Strategic Compensation Policy.

A screening and scoping exercise was undertaken by Scottish Government in accordance with the requirements of the 2005 Act. Comments were invited from the Scottish Consultation Authorities. The outcome from the Screening and Scoping Report and the consultation responses confirmed the need for an SEA as there is potential for significant environmental effects to occur as a direct result of the proposals. Their views are taken into account in this report which summarises the findings of the SEA.

Further details of the SEA process are set out in Section 1.2 of the main report.

What is contained in the Strategic Compensation Policy?

The Strategic Compensation Policy includes strategic compensation for offshore wind. Once adopted, this policy will be applicable to any relevant future offshore wind projects and associated offshore transmission infrastructure^[6]. It should be noted that the Strategic Compensation Policy does not identify specific spatial locations or details of compensatory measures.

The policy includes core principles regarding:

• Defining ‘the network’;
• Overall coherence;
• Selecting measures; and
• Additionality.

Principles regarding implementation and monitoring measures are also included in the policy relating to:

• Timing of measures;
• Monitoring of measures; and
• Adaptive management.

Further details of the Strategic Compensation Policy are set out in Section 2.1 of the main report.

How was the Strategic Environmental Assessment undertaken?

The SEA provides a high-level assessment of the potential environmental effects that are likely to result from the Strategic Compensation Policy, and consideration of a series of key questions (‘SEA objectives’). These SEA objectives reflect the scope of the assessment as well the environmental protection objectives from relevant legislation. The assessment has identified the individual and overall (cumulative) potential beneficial and adverse effects of the policy on a number of SEA topics, specifically Biodiversity, Flora and Fauna; Soil; Water; Climatic Factors; Cultural Heritage; and Landscape/Seascape. In order to recognise the interlinkages of these SEA topics, Soil and Water have collectively been given consideration under the overarching topic ‘Biodiversity, Flora and Fauna’.

A total of 12 options for principles have been assessed in the SEA across six SEA topics and nine SEA objectives.

At this stage, it is only possible to undertake a high-level SEA to consider the type of impacts that could arise from the Strategic Compensation Policy, as no specific spatial locations or details of compensatory measures are identified by the Strategic Compensation Policy.

The potential economic and social impacts that may result from the Strategic Compensation Policy does not form part of the scope of this SEA. Additional assessments may be undertaken, as appropriate, to help estimate the socio-economic benefits, costs, and risks associated with the policy.

Further details of the approach to the assessment are set out in Section 3 of the main report.

Which reasonable alternatives have been assessed?

In accordance with the 2005 Act, there is a requirement to consider reasonable alternatives that fulfil the objective of the plan as part of the SEA. The different options for each principle represent ‘alternatives’ for assessment in the SEA and are all equally weighted. Twelve options have been assessed across four core principles. At the time of writing, specific options to be taken forward and implemented have not yet been selected by Scottish Government.

The overarching option of ‘do nothing’ (i.e., not to implement the Strategic Compensation Policy) is also considered as a reasonable alternative.

Further details of reasonable alternatives are set out in Section 3.5 of the main report.

What is the current state of the environment?

The Scottish marine environment covers an area of over 462,000 km². The Scottish marine environment comprises a wide variety of habitats including intertidal rocky and sediment shores, subtidal rocky reefs and sandy / muddy sea bed to deep-sea sediment sea floor as well as the water column itself. Scotland has over 18,000 km of coastline and its inshore and offshore areas are among the largest of any country in Europe, representing 13% of all European seas.

Scotland’s marine environment supports a diverse complex of different habitats, which in turn support a wide range of marine plants and animals. Estimates suggest there are around 6,500 species of animals and plants (excluding microbial flora and seabirds) in Scotland’s seas.

At a high level, key pressures to species and habitats in Scotland’s inshore waters can be caused by climate change, coastal developments, dredging for sediments, pollution, marine litter, seabed abrasion, and the introduction and spread of invasive non-native species, in addition to localised pressures from specific activities in the area that particular species or habitats may be found. The effect of pressures is dependent on their intensity and the sensitivity and vulnerability of marine and coastal species and habitats to the pressures.

Benthic (seafloor) habitats are vital natural resources, as many marine species rely, directly or indirectly, on the seafloor to feed, hide, rest or reproduce. Generally benthic habitats are characterised by low mobility species. Benthic marine habitats within the Scottish marine environment can be characterised into three broad groups: intertidal habitats; subtidal (inshore and shelf sea); and deep sea habitats (found predominantly in offshore waters, and to a very limited extent inshore).

The pelagic environment/water column operates at a large scale in terms of physical, chemical, and biological processes, which can have consequences through the food chain and other habitat types^[7]. As well as providing an important role in climate regulation, the pelagic environment provides vital habitat that supports a wide range of mobile species.

Scotland’s marine environment has a range of mobile species with several populations considered to be either of international or national importance. Mobile species in Scottish waters include the following groups:

• Seals (grey and harbour seals);
• Cetaceans (23 species have been recorded in Scottish waters over the last 25 years; of these, 11 are regularly sighted^[8]);
• Birds (both breeding seabirds and overwintering waterbirds);
• Fish, incorporating marine and diadromous species, including sharks, rays and skates; and
• European otter (inshore waters only).

The importance of Scotland’s marine ecosystems is reflected in the range of designations which protect them at international and national levels. The Scottish MPA network consists of 247 sites, 233 of these are for nature conservation purposes, covering 37% of Scotland’s seas.

Scotland has a wide range of geological (rocks, minerals, fossils and structures), geomorphological (landforms and processes) and soil features that make up the marine and coastal landscape. The condition of these features influences the quality of habitats and in turn the viability and health of both flora and fauna populations.

Scotland’s seas (out to 3 NM from territorial baseline) are mostly classed as being of high or good ecological status under the Water Framework Directive (WFD). There are some poorer quality waters in certain areas. In terms of Good Ecological Status (GES) under the Marine Strategy Regulations (which applies out to the limit of Scotland’s Exclusive Economic Zone (EEZ)), GES has been achieved for four out of 15 descriptors. Environmental status has declined since 2012 for birds, and has remained stable for cetaceans, pelagic habitats, benthic habitats, non-indigenous species, eutrophication, changes in hydrological conditions, litter and input of anthropogenic sound. Environmental status has improved since 2012 for seals, fish, commercial fish and shellfish, food webs, contaminants, and contaminants in seafood.

The key pressures on the climate are derived from the continued global emission of greenhouse gases, including carbon dioxide. These emissions are recognised as leading to changes in the global climate (including changes in temperatures, precipitation, and storm density) in turn causing changes in the physical characteristics of the oceans, including potential changes in sea temperatures, circulation, salinity, pH and sea level rise.

Multiple habitats across Scottish seas and coastal areas can be termed blue carbon habitats due to their ability to store and/or sequester carbon. Their effectiveness as carbon sinks is highly dependent upon their long-term capacity to store carbon. Key blue carbon habitats include seagrass, saltmarsh, kelp beds, and biogenic reefs.

There are numerous scheduled monuments and listed buildings along the Scottish coastline, with designated wrecks and military remains sites identified both inshore and offshore. Three of Scotland’s six designated World Heritage Sites (WHS) are on the coast (St. Kilda; The Heart of Neolithic Orkney; The Forth Bridge). Other key coastal features include a number of Category A listed lighthouses, ecclesiastical remains, coastal heritage museums, military defences, harbours, forts and castles. There are nine Historic MPAs designated within Scottish waters.

Scotland’s landscapes and seascapes are a shared resource for everyone and bring many social and health benefits to people. There are many pressures on the landscapes and seascapes around the Scottish coastline including; coastal and marine development, changing physical processes and the projected effects of climate change. Approximately 13% of Scotland has been classified as a National Scenic Area (NSA)^[9]. There are 40 NSAs, with 27 located within or adjacent to coastal areas.

Further details of the environmental baseline are set out in Appendix 1 of the main report.

What are the likely significant environmental effects of the Plan?

This SEA has been undertaken as a high-level assessment of the potential environmental effects that are likely to result from the Strategic Compensation Policy.

Compensatory measures can have a broad range of environmental effects, which will vary depending on the receptor that is the target of the measure being taken. The key potential environmental effects or impact pathways that are likely to arise from the policy are summarised as follows:

• Potential neutralising and beneficial effects from compensatory measures taken for environmental impacts of offshore wind farms; and
• Potential adverse effects resulting from the displacement of activities from regions of compensatory measures into new areas and the intensification of activities in areas where these activities already occur.

Alongside the above, depending on the details of implementation, there is the potential for adverse effects resulting from the gradual erosion in the condition of certain habitats and species. This is because the greater flexibility in the application of compensatory measures under some principles could result in the specific features/designations impacted by an offshore wind development not necessarily benefitting from the measure. Potential adverse effects from this has been considered in the assessment of individual principles.

Overall, the level of potential beneficial, neutral, and adverse effects will depend on the details of implementation and which options for the principles under consideration are taken forward. Twelve options have been assessed across four core principles. Of these, six are assessed as having overall potential beneficial effects, five as having overall potential neutral effects, and one as having overall potential adverse effects.

Depending on the details of implementation, there could be potential adverse effects from Option B of the ‘coherence of the network’ principle if taken forward (where obligations for ‘coherence of the network’ are reduced). Overall, however, there are no anticipated significant adverse environmental effects from the Strategic Compensation Policy.

It should be noted, that whilst some options have been assessed as having a potential neutral effect, this would often relate to the option representing the status quo, and therefore would not be expected to result in a significant change in environmental effects to the current baseline.

In terms of implementation and monitoring measures considered in the Strategic Compensation Policy, those with more stringent requirements were assessed to more likely result in potential beneficial environmental effects due to the greater certainty of achieving the intended outcomes.

Each of the options for the principles under consideration has been assessed as reasonable alternatives and are all equally weighted. The overarching option of ‘do nothing’ (i.e., not to implement the Strategic Compensation Policy) is also considered a reasonable alternative. Without the implementation of the Strategic Compensation Policy, there is a risk that consenting of offshore wind is delayed or unable to proceed, 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.

Further details of the environmental effects are set out in Section 4 of the main report.

What are the cumulative effects of the Plan?

Cumulative effects have been considered in two ways in the assessment:

• First, as the cumulative effect of the implementation of the different principles under consideration; and
• Second, the cumulative effect of the implementation of the Strategic Compensation Policy alongside other plans and programmes.

The cumulative effects of the implementation of the different principles will vary depending on which option for each principle is taken forward. The greatest potential for beneficial cumulative effects across the principles and objectives has been assessed to result from:

• Defining the Network: Option B (network means all MPAs);
• Overall Coherence: Option D (overall marine environment);
• 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: either Option A or B (maintain requirement for additionality or remove requirement for additionality).

When considering cumulative effects with other plans, programmes, and strategies, there could be cumulative beneficial effects from enhanced protection as well as cumulative adverse effects from potential displacement of fishing activity (e.g., from fisheries management measures being considered for inshore MPAs and PMFs or from the SMP-OWE). However, potential displacement effects from the Strategic Compensation Policy have not been assessed as being significant at this stage. The full environmental effects of the policy will depend on the details of implementation and the measures brought forward.

Further details are set out in Section 4.10 of the main report.

How will significant environmental effects be mitigated and monitored?

Potential displacement effects from the Strategic Compensation Policy have not been assessed as being significant at this stage. The full environmental effects of the policy will depend on the details of implementation and the measures brought forward.

Depending on the details of implementation, there could be potential adverse effects from Option B of the ‘coherence of the network’ principle if taken forward (where obligations for ‘coherence of the network’ are reduced). Overall, however, there are no anticipated significant adverse environmental effects from the Strategic Compensation Policy.

The Environmental Report has not identified any additional factors beyond those addressed in policy-making that would need to be monitored. If a monitoring strategy were to be developed, it should be undertaken in a proportionate manner, with existing data sources, environmental indicators, and monitoring programmes being utilised where possible. It should be noted however, that environmental benefits of enhanced marine protection can take many years in some cases to be measurable.

Further details of mitigation and monitoring are set out in Section 4.12 of the main report.