Offshore wind - strategic compensation policy: strategic environmental assessment

4 Results of the SEA

4.1 Introduction

4.1.1 The purpose of this section is to report the results of the SEA. At this stage, it has only been possible to undertake a high-level SEA to consider the type of impacts that could arise from implementation of the Strategic Compensation Policy.

4.1.2 As outlined in Section 3.6.10, only indicative criteria to define the nature or type of potential effects that may result from the proposal and reasonable alternatives have been used (i.e. beneficial (+), adverse (-) or neutral (o)).

4.1.3 A high level overview of the implications of Strategic Compensation Policy on the topics and SEA objectives is provided in this section. The approach to the assessment is outlined in Section 3 and a summary of the assessment against each SEA topic and objective is given in Table 1.

4.1.4 Following the overview of potential environmental effects, each of the individual principles set out in Section 3.3 is assessed, capturing their potential beneficial, adverse, and neutral environmental effects. As required by the 2005 Act, consideration has also been given to reasonable alternatives. The different options for each principle have represented ‘alternatives’ for assessment and are all equally weighted. The overarching option of ‘do nothing’ (i.e., not to implement the Strategic Compensation Policy) is also considered as a reasonable alternative.

4.1.5 The assessment considered the environmental effects of each option compared to the current baseline. For example, if a principle maintains the ‘status quo’ the environmental effects are considered to be ‘neutral’ as this will not result in a change in circumstances to the current baseline.

4.2 Overview of potential environmental effects

4.2.1 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. As outlined in Section 3.6.6, the key potential environmental effects or impact pathways that are likely to arise from the implementation of the policy are 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.

4.2.2 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.

4.2.3 The delivery of compensatory measures in the marine environment is still fairly novel with understanding regarding potential measures and their environmental effects evolving. Under the Offshore Wind Industry Council (OWIC) project (delivered with The Crown Estate and Offshore Wind Evidence and Change Programme), £3.5M is being used to provide evidence on best practice, research, and practical pilot projects to inform the approach to strategic compensation around offshore wind farms^[190]. Investment is targeted at four measures:

• Provision of artificial nesting for seabirds;
• Habitat restoration and creation;
• Seabird predation reduction; and
• Removal of defunct infrastructure.

4.2.4 Scottish Government are identifying themes and actions specific to Scotland.

4.2.5 Individual offshore wind farm projects have produced compensation reports which provide useful information regarding opportunities and the potential effects of compensation measures. For example, criteria have been considered to assess the suitability of potential compensatory measures in the Green Volt Offshore Ornithology Compensation Report^[191]. These include specificity, effectiveness, delivery timeframe, technical delivery, conservation value, and extent. The Crown Estate Offshore Wind Leasing Round 4 Kittiwake Strategic Compensation Plan^[192] similarly applied criteria to refine a long list of potential compensation options for kittiwake. Ornithological compensation measures have also been scoped regionally within Scotland by developer groups and include measures such as by-catch mitigation, avian predator control, provision of artificial nesting sites, seagrass and native oyster restoration, and marine litter removal (amongst others)^[193].

4.2.6 Recognising the potential for impacts to seabirds from offshore wind farms, studies have particularly focussed on understanding potential compensation measures for SPA features. A Scottish Government 2024 report reviewed potential strategic ornithological compensatory measures, assessing their practical and ecological feasibility in the Scottish context^[194]. A 2022 Natural England report reviewed potential compensation measures for nine qualifying features of eight SPAs, and identified the closure of sandeel and sprat fisheries in UK waters as the most important compensation measure that could be applied^[195]. Research by ECOWINGS (Ecosystem Change, Offshore Wind, Net Gain and Seabirds) focuses on a region of the UK North Sea, with key species of interest including Black-legged Kittiwake, Common Guillemot, Razorbill, and Atlantic Puffin^[196]. Research by ECOWINGS is focusing on:

• Investigating the effects of offshore wind farms on predator-prey interactions and competition among seabird species;
• Quantifying the cumulative effects of offshore wind on seabirds and the wider ecosystem;
• Testing a set of compensation scenarios to achieve net environmental gain for seabirds; and
• Ensuring that the strategic compensatory measures are robust to future projections of climate change.

4.2.7 Recognising that under the principles for assessment, options include ‘measures that contribute to improving the overall status of the marine environment’ and ‘measures do not need to directly link to the feature impacted’, consideration has been given to the potential environmental effects of wider measures. Understanding of potential effects can be drawn from restoration projects. The Scottish Marine Environmental Enhancement Fund (SMEEF) facilitates investment in marine and coastal enhancement in Scotland and has mapped current marine restoration projects in Scotland^[197]. These are currently predominantly located inshore, in shallow water focusing on habitats and species such as seagrass and native oyster. However, there has been some interest in horse mussels and further species and habitats may be looked at in future. The ‘Nature Enhancement at Marine Offshore Energy Sites’ (NEMOES) study is a key SMEEF research project to investigate the role offshore renewables could play in contributing to marine nature enhancement in Scottish waters^[198], however results from this study are unavailable at the time of writing.

4.2.8 The scale and nature of restoration and enhancement projects to date in Scotland have very limited potential for adverse effects as a result of displacement of activities. In situations where displacement of activities may occur, these could result in potential adverse environmental effects in other areas, where such activities are not managed. The risk of this would depend on the nature and scale of the measures implemented, and the ability of the sector to adapt, given other potential restrictions they may be under. There is potential for transboundary effects on EU Member States if activities are displaced outwith areas under Scottish jurisdiction.

4.2.9 The studies identified highlight that compensatory measures are currently being explored and understood. Combined with the uncertainty in where they will be applied, and to which receptors, this Environmental Report only undertakes a broad, high level assessment below of the potential environmental effects for each principle within the Strategic Compensation Policy.

4.3 Assessment of principles: Introduction

4.3.1 The following sections assess the potential effects of each of the individual principles:

• Defining the network;
• Overall coherence;
• Selecting compensatory measures; and
• Additionality for compensation.

4.3.2 Implementation and monitoring measures are also assessed.

4.3.3 An assessment of each principle against the SEA objectives is provided in Sections 4.4 – 4.8 and summarised in Table 1.

4.4 Assessment of principles: Defining the network

4.4.1 The definition of the network is currently set out in the Habitats Regulations, as “the national site network”, and consists of SACs and SPAs^[199]. The Habitats Regulations require ‘the appropriate authority’ to secure any necessary compensatory measure to ensure that the overall coherence of ‘the network’ is protected. The definition of the network therefore influences what sites are considered within it, and potentially what sites can have compensatory measures applied to them.

Option A: Network means only SACs and SPAs

4.4.2 This option would maintain the status quo, so that compensatory measures would be applied for SACs and SPAs only.

Potential beneficial effects

4.4.3 This option does not change the status quo and is therefore not expected to result in a change to the current baseline.

Potential neutral effects

4.4.4 The application of this principle would help to prevent deterioration in the overall network of SACs and SPAs in Scottish waters which may be affected by offshore wind development.

4.4.5 As set out in the Environmental Baseline (Sections 7.3.30 and 7.3.31) there are 45 SACs in Scottish waters found inshore, two that straddle inshore and offshore areas, and eight designated entirely in Scotland’s offshore waters. In terms of SPAs, Scotland has a suite of 14 marine SPAs, complementing 30 colony SPAs (with marine extensions). All these sites have the potential to benefit from this policy principle, depending on where compensatory measures are applied.

4.4.6 This option has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.4.7 No potential adverse effects have been identified for this option.

Option B: Network means all MPAs

4.4.8 This option would expand the definition of the network to also include NCMPAs designated under the Marine Scotland Act 2010 (s79(2)) and MCZs designated under the Marine and Coastal Access Act 2009 (s123). The 2010 and 2009 Acts set out requirements to ‘form a network’, and this includes NCMPAs, MCZs and ‘relevant conservation sites’ (which include SACs and SPAs). Changing the definition of ‘the network’ in the Habitats Regulations to also include NCMPAs and MCZs would therefore bring greater parity between the key legislation for the designation and management of the different MPA designations.

Potential beneficial effects

4.4.9 Depending on the details of implementation, the application of this principle could have the effect of expanding the application of compensatory measures to benefit NCMPAs and MCZs. As set out in the Environmental Baseline (Section 7.3.32), there are 36 NCMPAs located in Scottish seas, 13 of which are offshore. All these sites have the potential to benefit from this policy principle, depending on where compensatory measures are applied.

Potential neutral effects

4.4.10 The application of this principle would help to prevent deterioration in the overall network of SACs and SPAs in Scottish waters which may be affected by offshore wind development. This has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.4.11 There could be considered a risk under this option that compensatory measures could be directed away from SACs/SPAs, reducing their condition. This, however, will depend on the details of implementation and how the ‘overall coherence’ principle is defined and implemented (see Section 4.5). How ‘overall coherence’ is assessed and implemented is considered to more greatly influence where compensatory measures are directed, rather than how the network is defined. Therefore, no potential adverse effects have been identified for this option.

Review against SEA objectives

4.4.12 SEA Topics:

• Biodiversity, Flora, and Fauna (SEA objectives 1, 2)
• Soil (SEA objectives 3, 4, 5)
• Water (SEA objective 6)

Option A: neutral

4.4.13 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: beneficial

4.4.14 By extending the definition to include NCMPAs and MCZs this option will help to maintain and enhance the ecological coherence of the MPA network and include within it a wider range of geological and geomorphological interest. By extending to these designations, it will also draw in a wider range of species and habitats, and a broader range of hydrological conditions.

4.4.15 There could be considered a risk under this option that compensatory measures could be directed away from SACs/SPAs which could affect whether conservation objectives are achieved. This however is considered to more greatly be influenced by how the ‘coherence of the network’ is defined, and therefore no potential adverse effects have been identified for this option.

4.4.16 SEA Topics:

• Climatic Factors (SEA objective 7)

Option A: neutral

4.4.17 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: beneficial

4.4.18 With the definition of the network including NCMPAs and MCZs, compensatory measures could be secured for a wider range of designations. Carbon stocks across the MPA network therefore have the potential to benefit from this option if a compensatory measure brings benefits to blue carbon habitats.

4.4.19 SEA Topics:

• Cultural Heritage (SEA objective 8)
• Landscape/Seascape (SEA objective 9)

Option A: neutral

4.4.20 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: neutral

4.4.21 Cultural heritage and landscape/seascape are not protected features of the MPA network as defined under this option. Extending the definition of ‘the network’ to NCMPAs and MCZs is therefore assessed to have a neutral effect on these SEA objectives.

4.5 Assessment of principles: Overall coherence

4.5.1 As set out in Section 4.4.1, the Habitats Regulations require ‘the appropriate authority’ to secure any necessary compensatory measure to ensure that the ‘overall coherence’ of the network is protected. How ‘overall coherence’ is defined will influence what designations, areas, and receptors can have compensatory measures applied to them. Final decisions regarding how overall coherence is defined will be influenced by final decisions regarding how ‘the network’ is defined, as the two are inextricably linked.

Option A: Only SACs and SPAs

4.5.2 This option would maintain the status quo, so that overall coherence would consider SACs and SPAs only.

Potential beneficial effects

4.5.3 This option is not expected to result in a change to the current baseline.

Potential neutral effects

4.5.4 As set out in Section 4.4.5 and 4.4.6, this option has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.5.5 No potential adverse effects have been identified for this option.

Option B: Only SACs and SPAs, but reduced obligations

4.5.6 Under this option the coherence wording in the Habitats Regulations would be amended to remove the requirement to ‘protect’ coherence and amend this to ‘have regard to’ coherence. The term ‘have regard to’ has been previously interpreted to mean ‘to inform itself and give reasonable consideration to’^[200].

Potential beneficial effects

4.5.7 No potential beneficial effects have been identified for this option beyond the current baseline.

Potential neutral effects

4.5.8 This option would maintain the current system of compensatory measures being focussed on SACs and SPAs but could provide greater flexibility in the application of compensatory measures. Depending on case specifics, this could result in a range of potential environmental effects and has therefore been assessed as neutral.

Potential adverse effects

4.5.9 This option would reduce current duties under the Habitats Regulations regarding ‘overall coherence of the network’. Depending on the details of implementation, this could result in fewer compensatory measures being secured for SACs and SPAs. This could also impact upon climatic factors if blue carbon habitats are impacted.

Option C: All MPAs

4.5.10 As set out in Section 4.4.8, this option would expand the definition of coherence to also include NCMPAs designated under the Marine Scotland Act 2010 (s79(2)) and MCZs designated under the Marine and Coastal Access Act 2009 (s123).

Potential beneficial effects

4.5.11 Depending on the details of implementation, the application of this principle could have the effect of expanding the application of compensatory measures to benefit NCMPAs and MCZs. As set out in the Environmental Baseline (Section 7.3.32), there are 36 NCMPAs located in Scottish seas, 13 of which are offshore. All these sites have the potential to benefit from this policy principle, depending on where compensatory measures are applied.

Potential neutral effects

4.5.12 The application of this principle would help to prevent deterioration in the overall network of SACs and SPAs in Scottish waters which may be affected by offshore wind development. This has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.5.13 The potential environmental effects of this option will depend on how overall coherence is assessed. As set out in Chaniotis et al., (2018)^[201], the UK administrations follow a number of key principles in the development of the MPA network, including:

• Features: the network should represent the range of habitats and species for which MPAs are considered appropriate – with a greater proportion of particularly threatened and/or declining features;
• Representativity: the network should include areas that best represent the range of habitats and species;
• Connectivity: the network should comprise MPAs that are well-distributed and take into account linkages between marine ecosystems;
• Resilience: the network should include more than one example of a feature in individual MPAs and ensure they are a sufficient size to deliver conservation benefits; and
• Management: the network should ensure the protection of marine habitats and species for which an MPA has been identified.

4.5.14 Scottish Government considers the network to currently be coherent^[202].

4.5.15 By including all MPAs in the definition of the network, there could be considered a risk under this option that compensatory measures could be directed away from SACs/SPAs, reducing their condition, and therefore having a potential adverse effect on SEA objective (2) (see Section 0). This will depend on the details of implementation. However, if the coherence principles (as set out in Section 4.5.13) are still met in the application of compensatory measures, on the whole there are not considered to be potential adverse effects identified for this option.

Option D: Overall marine environment

4.5.16 Under this option, ‘overall coherence’ would include the overall marine environment, rather than being focused only on MPAs. Compensatory measures could be considered that improve the overall status of the marine environment, therefore allowing a higher degree of flexibility in their application.

Potential beneficial effects

4.5.17 A broader range of compensatory measures could be applied that could benefit the wider marine environment. The higher degree of flexibility could account for marine environment priorities at a given time. As outlined in the Environmental Baseline (Section 7.5.8), the 2019 UK updated assessment and Good Environmental Status^[203] reports for the North-East Atlantic Ocean marine region to not have achieved GES for birds, fish, benthic habitats, non-indigenous species, commercial fish and litter. It has partially achieved GES for cetaceans, seals, pelagic habitats, food webs and underwater noise. Greater flexibility in the application of compensatory measures could enable a more holistic approach and the targeting of measures on a broader range of receptors that have been identified as needing improvement in condition/status.

Potential neutral effects

4.5.18 No potential neutral effects have been identified for this option.

Potential adverse effects

4.5.19 The greater flexibility in the application of compensatory measures under this option could result in the specific features impacted by an offshore wind development not necessarily benefitting from the measure. Depending on the details of implementation, this could result in the unintended effect of a gradual erosion in the condition of certain habitats and species within the MPA network, reducing their condition, and therefore having a potential adverse effect on SEA objective (2) (see Section 4.5.20).

Review against SEA objectives

4.5.20 SEA Topics:

• Biodiversity, Flora, and Fauna (SEA objectives 1, 2)
• Soil (SEA objectives 3, 4, 5)
• Water (SEA objective 6)

Option A: neutral

4.5.21 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: adverse

4.5.22 This option would reduce current duties under the Habitats Regulations regarding ‘overall coherence of the network’. Depending on the details of implementation, this could result in less compensatory measures being secured for SACs and SPAs, resulting in potentially adverse effects.

Option C: neutral

4.5.23 By extending overall coherence to include NCMPAs and MCZs this option will help to maintain and enhance the ecological coherence of the MPA network and include within it a wider range of geological and geomorphological interest. By extending to these designations, it will also draw in a wider range of species and habitats, and a broader range of hydrological conditions, helping to ensure representativity of marine features. However, there could be considered a risk under this option that compensatory measures could be directed away from SACs/SPAs which, affecting whether conservation objectives are achieved. This option is therefore considered to have an overall neutral effect on these SEA objectives.

Option D: neutral

4.5.24 A broader range of compensatory measures could be applied that could benefit the wider marine environment. This could help to support the achievement of wider GES indicators. However, if compensatory measures are not targeted at the features impacted, there is a risk that conservation objectives of MPAs are not achieved. This option is therefore considered to have an overall neutral effect on these SEA objectives.

4.5.25 SEA Topics:

• Climatic Factors (SEA objective 7)

Option A: neutral

4.5.26 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: adverse

4.5.27 This option could have potential adverse effects on climatic factors if blue carbon habitats are impacted, and compensatory measures not directed towards blue carbon habitats.

Option C: beneficial

4.5.28 With the definition of coherence including NCMPAs and MCZs, compensatory measures could be secured for a wider range of designations. Carbon stocks across the MPA network therefore have the potential to benefit from this option if a compensatory measure brings benefits to blue carbon habitats.

Option D: beneficial

4.5.29 This option gives the potential to focus more on achieving climate resilience. Carbon stocks across the wider marine environment (as well as in MPAs) have the potential to benefit from this option.

4.5.30 +SEA Topics:

• Cultural Heritage (SEA objective 8)
• Landscape/Seascape (SEA objective 9)

Option A: neutral

4.5.31 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: neutral

4.5.32 Cultural heritage and landscape/seascape are not protected features of the MPA network as defined under this option. This option is therefore assessed to have a neutral effect on the SEA objectives.

Option C: neutral

4.5.33 Cultural heritage and landscape/seascape are not protected features of the MPA network as defined under this option. Extending the coherence of the network to include NCMPAs and MCZs is therefore assessed to have a neutral effect on the SEA objective.

Option D: beneficial

4.5.34 Depending on the details of implementation, this option gives the potential to consider to a greater extent cultural heritage and landscape/seascape.

4.6 Assessment of principles: Selecting Compensatory Measures

4.6.1 The draft Strategic Compensation Policy sets out that protecting the marine environment can be viewed at the scales shown below.

• Feature or Interest
• Population (Individuals in the species that are found in Scottish waters)
• Species
• Habitat type
• Protected Area Network
• Individual Site
• Associated Site Network
• Wider Site Network
• Marine Ecosystem
• Protected Area Network
• Ecosystem resilience
• Good Environmental Status

4.6.2 Each of the scales set out above is interlinked. For example, focusing on enhancing the protected area network, such as improving those sites which are most vulnerable, will provide benefits to those species and habitats that rely on protected area sites, and strengthening the resilience of the ecosystem as a whole by helping to restore biodiversity and achieve GES indicators.

Option A: Measures should directly link to the feature impacted

4.6.3 Under this option, to maintain coherence, compensatory measures should be directly linked to the feature impacted (e.g. the habitat or species) but may be taken at different sites within ‘the network’ as long as they contribute to the favourable conservation status of the impacted feature. This option is most aligned to the current baseline, where a compensatory measure is identified to directly link to the feature impacted. For example, the erection of nesting platforms to compensate for impacts to kittiwakes from the Hornsea Three wind farm^[204].

Potential beneficial effects

4.6.4 This option is not expected to result in a change to the current baseline.

Potential neutral effects

4.6.5 This option has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.6.6 No potential adverse effects have been identified for this option.

Option B: Measures do not need to directly link to the feature impacted, but need to improve the network

4.6.7 By amending or removing the requirement to ‘protect’ coherence, measures may also be taken that seek to enhance the overall resilience of the network and its ability to host the species and habitats listed in the annexes of the Habitats Regulations. These measures are not necessarily directly linked to the impacted feature. The scope of environmental effects under this option will be influenced by how the ‘network’ (see Section 4.4) and ‘coherence’ (see Section 4.5) are defined.

Potential beneficial effects

4.6.8 Enabling compensation to be delivered beyond the feature impacted will make available a broader range of compensation measures that can be delivered. This could result in wider benefits to the network and for compensation measures to be targeted at identified priorities to improve the network. This could potentially also assist with ‘climate-smart’ adaptive management by enabling protection of ecosystem functions.

Potential neutral effects

4.6.9 No potential neutral effects have been identified for this option.

Potential adverse effects

4.6.10 The greater flexibility in the application of compensatory measures under this option could result in the specific features impacted by an offshore wind development not necessarily benefitting from the measure. Depending on the details of implementation, this could result in the unintended effect of a gradual erosion in the condition of certain habitats and species in the network.

Option C: Measures do not need to directly link to the feature impacted, but need to improve the wider marine environment

4.6.11 These measures would seek to deliver against wider objectives, such as achieving GES under the Marine Strategy.

Potential beneficial effects

4.6.12 Similar to potential beneficial effects outlined in Section 4.5.17, under this option a broader range of compensatory measures could be applied that could benefit the wider marine environment. The higher degree of flexibility could account for marine environment priorities at a given time. As outlined in the Environmental Baseline (Section 7.5.8), the 2019 UK updated assessment and Good Environmental Status^[205] reports for the North-East Atlantic Ocean marine region to not have achieved GES for birds, fish, benthic habitats, non-indigenous species, commercial fish and litter. It has partially achieved GES for cetaceans, seals, pelagic habitats, food webs and underwater noise. Greater flexibility in the application of compensatory measures could enable a more holistic approach and the targeting of measures on a broader range of receptors that have been identified as needing improvement in condition/status. This could potentially also assist with ‘climate-smart’ adaptive management by enabling protection of ecosystem functions.

Potential neutral effects

4.6.13 No potential neutral effects have been identified for this option.

Potential adverse effects

4.6.14 Similar to potential adverse effects outlined in Section 4.5.19, the greater flexibility in the application of compensatory measures under this option could result in the specific features impacted by an offshore wind development not necessarily benefitting from the measure. Depending on the details of implementation, this could result in the unintended effect of a gradual erosion in the condition of certain habitats and species, and also certain MPAs.

Option D: Measures do not need to directly link to the feature impacted, but need follow a ‘selection framework’

4.6.15 Under this option a framework is set up whereby measures are selected in order of priority from:

1) Measures that directly link to the feature impacted.

2) Measures that improve the network associated with that feature (i.e. SAC/SPA).

3) Measures that improve the resilience of the network in terms of all MPAs.

4) Measures that improve the wider marine environment (as in Option C).

Potential beneficial effects

4.6.16 This option brings the beneficial effects of Options A – C. By following a ‘selection framework’, a broader range of compensation measures will still be enabled that could benefit the network and the wider marine environment.

Potential neutral effects

4.6.17 No potential neutral effects have been identified for this option.

Potential adverse effects

4.6.18 Whether potential adverse effects occur will depend on the details of implementation and the extent to which decision-making progresses down the hierarchy. Ensuring that measures directly link to the impacted feature are first considered will provide safeguards to avoid the unintended effect of a gradual erosion in the condition of certain habitats and species in the network, and also certain MPAs. Implementation of the framework considering the ‘critical threshold’ (i.e. whether the population of the species in Scotland can no longer survive in the long term) will further help to protect the condition of habitats and species in the network. On this basis, potential adverse effects would be minimised, but there is the potential that similar adverse effects could be observed as for Option C (see Section 4.6.14). This could result in the unintended effect of a gradual erosion in the condition of certain habitats and species, and also certain MPAs.

Review against SEA objectives

4.6.19 SEA Topics:

• Biodiversity, Flora, and Fauna (SEA objectives 1, 2)
• Soil (SEA objectives 3, 4, 5)
• Water (SEA objective 6)

Option A: neutral

4.6.20 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: neutral

4.6.21 This option could result in wider benefits to the network and for compensation measures to be targeted at identified priorities to improve the network. This could help to maintain and enhance the ecological coherence of the MPA network and support the achievement of GES. The greater flexibility in the delivery of compensation measures (i.e., not needing to directly link to the feature impacted) could also help to achieve Soil SEA objectives (e.g., compensation for impacts to a bird feature could be secured for a seabed feature).

4.6.22 With regards to SEA objective 2, whilst potential beneficial effects have been identified above, there is a risk that if a specific site is impacted by an offshore wind development and the compensation is not targeted at the impacted feature, then individual site conservation objectives may not be achieved. This would have a potential adverse effect.

4.6.23 There is assessed to be an overall neutral effect on these SEA objectives.

Option C: neutral

4.6.24 A broader range of compensatory measures could be applied that could benefit the wider marine environment. This could help to support the achievement of wider GES indicators. However, if compensatory measures are not targeted at the features impacted, there is a risk that conservation objectives of MPAs are not achieved.

4.6.25 There is assessed to be an overall neutral effect on these SEA objectives.

Option D: neutral

4.6.26 By following a ‘selection framework’, a broader range of compensation measures will still be enabled that could benefit the network and the wider marine environment. This could help to enhance marine and coastal ecosystems and support the achievement of GES.

4.6.27 Ensuring that measures that directly link to the impacted feature are first considered within the framework will provide safeguards to ensure conservation objectives of MPAs are achieved. However, if compensatory measures are not targeted at the features impacted, there is a risk that conservation objectives of MPAs are not achieved.

4.6.28 The greater flexibility in the delivery of compensation measures (i.e., not always needing to directly link to the feature impacted) could help to achieve Soil SEA objectives (e.g., compensation for impacts to a bird feature could be secured for a seabed feature).

4.6.29 There is assessed to be an overall neutral effect on these SEA objectives.

4.6.30 SEA Topics:

• Climatic Factors (SEA objective 7)

Option A: neutral

4.6.31 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: beneficial

4.6.32 This option could potentially assist with ‘climate-smart’ adaptive management by enabling protection of ecosystem functions, therefore contributing to the achievement of the climate SEA objective.

Option C: beneficial

4.6.33 Under this option there is potentially greater scope to include actions that could enhance coastal resilience for a wider range of reasons (other than only to support a particular habitat or species).

4.6.34 This option gives the potential to focus more on achieving climate resilience. Carbon stocks across the wider marine environment (as well as in MPAs) have the potential to benefit from this option. It could also potentially assist with ‘climate-smart’ adaptive management by enabling protection of ecosystem functions, therefore contributing to the achievement of the climate SEA objective.

Option D: beneficial

4.6.35 Carbon stocks across the wider marine environment (as well as in MPAs) have the potential to benefit from this option. It could also potentially assist with ‘climate-smart’ adaptive management by enabling protection of ecosystem functions, therefore contributing to the achievement of the climate SEA objective.

4.6.36 SEA Topics:

• Cultural Heritage (SEA objective 8)
• Landscape/Seascape (SEA objective 9)

Option A: neutral

4.6.37 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: neutral

4.6.38 This option remains focussed on ‘the network’ (which depending on how the network is defined, could include SACs and SPAs, or all MPAs). Cultural heritage and landscape/seascape are not protected features of the MPA network as defined in Section 4.3 (‘defining the network’). This option is therefore assessed to have a neutral effect on these SEA objectives.

Option C: beneficial

4.6.39 Depending on the details of implementation, this option gives the potential to consider to a greater extent cultural heritage and landscape/seascape.

Option D: beneficial

4.6.40 Depending on the details of implementation, this option gives the potential to consider to a greater extent cultural heritage and landscape/seascape.

4.7 Assessment of principles: Additionality for Compensation

4.7.1 In accordance with s.291(3) of the Energy Act 2023^[206], compensatory measures taken by an authority in exercise of any of that authority's functions can be counted as compensation for an offshore wind development. This can include functions that are not necessarily related to compensatory measures for offshore wind development.

Option A: Maintain requirement for additionality

4.7.2 It is an accepted concept that measures need to be ‘additional’ to normal/standard practice. Under this option, additionality is retained and Scottish Government would look to define ‘normal practice/standard practice’ as:

• Conservation measures included as required in Site Management Plans adopted in accordance with the requirements of the Habitats Regulations or the 2009 and 2010 Marine Acts, regardless of funding provision;
• Conservation measures included as required in Conservation Advice documents. Where these documents include activities under ‘Advice to Support Management’, normal practice only includes those activities that have been enacted; and
• Conservation measures that are currently resourced at the time of application (i.e. funding, people, equipment etc.) and currently operational or will be operational with a determined start date. Compensatory measures can still augment these in scope (e.g. inclusion of other species, geographic scope) and/or in time (continue these conservation measures on after funding (or other resources) have ceased under the current programme).

4.7.3 Things that are beyond scope of normal practice are considered to be:

• Broadscale measures that are not specifically related to site management.
• Measures which go beyond the requirement to prevent deterioration of a site, such as large scale measures for site improvement purposes.

Potential beneficial effects

4.7.4 This option largely aligns with the status quo and is therefore not expected to result in a change to the current baseline.

Potential neutral effects

4.7.5 This option has been assessed as having an overall neutral effect because it is not expected to result in a change to the current baseline.

Potential adverse effects

4.7.6 No potential adverse effects have been identified for this option.

Option B: Remove requirement for additionality

4.7.7 Under this option, the requirement for additionality would be removed for offshore windfarm developers.

Potential beneficial effects

4.7.8 Removing the requirement for additionality could enable ‘normal practice’ measures to be accelerated, therefore assisting the delivery of site management and the achievement of conservation objectives at a faster pace, bringing potential beneficial effects. For example, greater resourcing could enable outcomes to be achieved over a shorter time period.

Potential neutral effects

4.7.9 Depending on the type, location, and timing of the measure implemented, this option could result in potential neutral effects. For example, through the delivery of a measure (and at the same pace) to one that is already resourced and operational.

Potential adverse effects

4.7.10 The Statutory Nature Conservation Bodies (SNCBs) have an important role in advising upon the management measures for sites and the suitability of compensatory measures. This would ensure that if anything is brought forward as ‘normal practice’, it would be an appropriate management measure for the site and would not have adverse effects. No potential adverse effects have therefore been identified for this option.

Review against SEA objectives

4.7.11 SEA Topics:

• Biodiversity, Flora, and Fauna (SEA objectives 1, 2)
• Soil (SEA objectives 3, 4, 5)
• Water (SEA objective 6)
• Climatic Factors (SEA objective 7)
• Cultural Heritage (SEA objective 8)
• Landscape/Seascape (SEA objective 9)

Option A: neutral

4.7.12 This option does not result in a change from the status quo and is therefore considered to have an overall neutral effect on the SEA objectives.

Option B: neutral

4.7.13 Depending on the type, location, and timing of the measure implemented the environmental effects of this option can vary and include potential beneficial, and neutral effects. The option has been assessed to have an overall neutral effect on the SEA objectives, compared to current practice/baseline.

4.8 Assessment of implementation and monitoring measures

4.8.1 Monitoring is an essential process for determining whether measures achieve their agreed outcomes.

4.8.2 Adaptive management offers a dynamic approach that may need to be employed through the delivery of measures; this process needs to be informed by robust monitoring to enable data driven decision making.

4.8.3 In addition to ensuring compliance with legislative requirements monitoring is valuable dealing with uncertainty and shifting baselines. Empirical data on the effectiveness of measures will facilitate a better understanding around the certainty of measures to deliver to objectives and be utilised effectively as compensation for offshore wind development. Information obtained from monitoring may also contribute to environmental baseline data and wider scientific knowledge.

4.8.4 Implementation and monitoring measures under consideration in the Strategic Compensation Policy are set out in Section 3.3.4. They include:

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

4.8.5 Two options are considered for each measure, with Option A representing a more stringent measure.

4.8.6 There may be differences in the practicalities of delivering each of the options, but in terms of environmental effects, Option A for all implementation and monitoring measures is more likely to result in beneficial environmental effects as they increase the certainty in successful environmental outcomes being achieved.

4.9 Summary of effects

4.9.1 The potential impacts of each principle (and the options under consideration) are summarised against each SEA objective at a qualitative level in Table 1 below.

4.9.2 Overall, the Strategic Compensation Policy is assessed to have potential beneficial effects. The level of this 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.

4.9.3 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 change in environmental effects compared to the current baseline.

4.9.4 In terms of implementation and monitoring measures (see Section 3.3.5 for details), Option A has been assessed in all cases to more likely result in potential beneficial environmental effects. This is because this option presents more stringent requirements, and as such would increase the certainty in successful environmental outcomes being achieved from the principles.

Table 1 Summary of effects of Strategic Compensation Policy principles against SEA objectives (1 – 9)

Principle	Option	1	2	3	4	5	6	7	8	9	Overall
Defining the Network	Option A	o	o	o	o	o	o	o	o	o	o
Defining the Network	Option B	+	+	+	+	+	+	+	o	o	+
Overall Coherence	Option A	o	o	o	o	o	o	o	o	o	o
Overall Coherence	Option B	-	-	-	-	-	-	-	o	o	-
Overall Coherence	Option C	+	o	+	+	+	+	+	o	o	+
Overall Coherence	Option D	+	-	+	+	+	+	+	+	+	+
Selecting Compensatory Measures	Option A	o	o	o	o	o	o	o	o	o	o
Selecting Compensatory Measures	Option B	+	o	+	+	+	+	+	o	o	+
Selecting Compensatory Measures	Option C	+	-	+	+	+	+	+	+	+	+
Selecting Compensatory Measures	Option D	+	-	+	+	+	+	+	+	+	+
Additionality for Compensation	Option A	o	o	o	o	o	o	o	o	o	o
Additionality for Compensation	Option B	o	o	o	o	o	o	o	o	o	o

Key:

+ Overall potential beneficial environmental effect

o Overall potential neutral environmental effect

- Overall potential adverse environmental effect

4.10 Reasonable alternatives

4.10.1 As outlined in Section 3.3.2, the different options for each principle represent ‘alternatives’ for assessment. They are all equally weighted and the effects of each are summarised in Table 1.

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

4.10.3 In the ‘do nothing’ scenario, the implementation of compensatory measures would remain as it currently is. The future evolution of the environmental baseline identified in Section 7 (Appendix 1) would be expected to occur. As outlined in Section 1.1.8, the Strategic Compensation Policy aims to support:

• The protection of the marine environment and maximisation of marine enhancement in Scottish waters 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 marine environment and so that securing compensatory measures is not a limiting factor to consenting offshore wind.

4.10.4 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.

4.11 Cumulative effects

4.11.1 As set out in Section 3.8, cumulative effects have been considered in two ways in the assessment:

• First, as the cumulative effect of the implementation of the different principles outlined in Section 3.3; and
• Second, the cumulative effect of the implementation of the Strategic Compensation Policy alongside other plans and programmes.

Cumulative effects of the implementation of the Strategic Compensation Policy principles

4.11.2 Table 1 summarises the effects of each of the principal options under consideration for the Strategic Compensation Policy. This demonstrates that the cumulative effects of the implementation of the different principles will vary depending on which option for each principle is taken forward.

4.11.3 Twelve options have been assessed across four core principles. Depending on the options taken forward, the assessment shows that the Strategic Compensation Policy could have overall potential neutral or beneficial effects for the SEA objectives. 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 follow a ‘selection framework’); and
• Additionality for Compensation: either Option A or B (maintain requirement for additionality or remove requirement for additionality).

4.11.4 The lowest potential for beneficial cumulative effects across the principles and objectives has been assessed to result from:

• Defining the Network: Option A (network means only SACs and SPAs);
• Overall Coherence: Option B (only SACs and SPAs, but reduced obligations);
• Selecting Compensatory Measures: Option A (measures should directly link to the feature impacted); and
• Additionality for Compensation: either Option A or B (maintain requirement for additionality or remove requirement for additionality).

Cumulative effects of the Strategic Compensation Policy with other plans, programmes and strategies

4.11.5 As outlined in Section 3.8.2, other plans, programmes, and strategies that may similarly impact key environmental receptors include the SMP-OWE, NESO’s HND and HND-FUE work, the NMP2, proposals for management measures applying to offshore MPAs, proposals for management measures applying to PMFs and inshore MPAs, and the Scottish Government Marine and Coastal Restoration Plan^[207].

4.11.6 The SMP-OWE is being assessed under a separate SEA. There may be cumulative adverse effects of displacement (if fishing activity is displaced from areas of offshore wind development and also displaced from areas of compensatory measures). However, potential displacement effects from the Strategic Compensation Policy have not been assessed at this stage to be significant. The full environmental effects of the policy will depend on the details of implementation and the measures brought forward.

4.11.7 NESO’s HND and HND-FUE are also being assessed under a separate SEA. The results of this are not published at the time of writing. It is therefore only possible to identify potential high level cumulative effects. Potential positive effects from transmission infrastructure could include habitat enhancement, such as the creation of artificial reefs, new roosting structures and exclusion of habitat damaging activity. This could bring potential beneficial cumulative effects with the Strategic Compensation Policy. Transmission infrastructure could result in the potential displacement of fishing activity (if they cross fishing grounds), both during installation and operation when cables may become exposed or if hard protection is used. However, potential displacement effects from the Strategic Compensation Policy have not been assessed at this stage to be significant. Potential adverse cumulative effects are therefore expected to be minor if they occur.

4.11.8 Scotland’s National Marine Plan 2 is under development and an SEA scoping report has been undertaken^[208]. As this assessment has not yet been undertaken, it is not possible to identify in detail potential cumulative effects.

4.11.9 A new round of fisheries management measures is being assessed under the SEA provisions (and consulted upon) for the remaining inshore MPAs (where management is not already in place), as well as PMFs identified as most at risk from bottom-contacting mobile fishing gear outwith MPAs. The proposed fisheries management measures for offshore MPAs have also recently been assessed under the SEA provisions. Depending on the compensation measures implemented under the Strategic Compensation Policy, there could be cumulative beneficial effects from enhanced protection as well as cumulative adverse effects from potential displacement of fishing activity. Overall, the proposed measures for offshore MPAs are assessed as having a beneficial impact for the overarching topic Biodiversity, Flora and Fauna. In terms of adverse effects for offshore MPAs measures, the effects from displacement of fishing activities are assessed as generally being minor.

4.11.10 The Scottish Government Marine and Coastal Restoration Plan^[209] is currently under development. As this assessment has not yet been undertaken, it is not possible to identify in detail potential cumulative effects. It is anticipated that these could be both beneficial (from environmental enhancement from measures implemented under either plan/policy) or potentially adverse (if displacement of activities occurs).

4.12 Transboundary effects

4.12.1 Consideration has been given to the potential for transboundary effects. The scope of the Strategic Compensation Policy is restricted to Scottish waters. The Strategic Compensation Policy would therefore not apply to compensatory measures required for another jurisdiction.

4.12.2 Potential beneficial effects will therefore be focussed on Scotland but given the dynamic nature of the marine environment and the highly mobile nature of some species, the policy could also result in potential wider beneficial effects, outwith of Scottish waters.

4.12.3 In terms of potential adverse transboundary effects (Section 4.2.8), potential displacement effects from the Strategic Compensation Policy have not been assessed as being significant at this stage. Therefore, no potential adverse transboundary effects have been identified. The full environmental effects of the policy will depend on the details of implementation and the measures brought forward.

4.13 Mitigation and monitoring

4.13.1 Monitoring is an important component of SEA, as it seeks to ensure that plans avoid generating unforeseen adverse environmental effects. UK Government planning policy guidance^[210] advises that details of monitoring arrangements may be included in the report, the Post Adoption Statement or in the plan itself. Monitoring arrangements should be sufficient to enable any unforeseen adverse effects to be identified at an early stage and to enable appropriate remedial actions.

4.13.2 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.

4.13.3 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.

4.13.4 Final proposals for mitigation and suggested monitoring will be provided in the Post Adoption Statement. These will focus on the environmental effects identified in this assessment.

4.14 Conclusions

4.14.1 The Strategic Compensation Policy falls under Section 5(4) of the 2005 Act and is therefore subject to SEA. 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 policy. This SEA provides a high-level and qualitative assessment of the potential environmental effects that are likely to result from the Strategic Compensation Policy.

4.14.2 In the longer term, continuing pressures from development of marine industry, human activities, and climate change are likely to be the key factors in driving changes from the current environmental baseline. This includes effects from fishing practices, coastal development and other activities in the marine environment (recreation, anchoring, aquaculture, commercial shipping, offshore renewables, dredging etc.).

4.14.3 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.

4.14.4 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.

4.14.5 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.

4.14.6 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 change in environmental effects to the current baseline.

4.14.7 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.

4.14.8 In accordance with the 2005 Act, consideration has also been given to reasonable alternatives. Each of the options for the principles under consideration has been assessed and are all equally weighted. The overarching option of ‘do nothing’ (i.e., not to implement the Strategic Compensation Policy) is 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.

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

• First as the cumulative effect of the implementation of the different principles outlined in Section 3.3; and
• Second, the cumulative effect of the implementation of the Strategic Compensation Policy alongside other plans and programmes.

4.14.10 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 follow a ‘selection framework’); and
• Additionality for Compensation: either Option A or B (maintain requirement for additionality or remove requirement for additionality).

4.14.11 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 and NESO’s HND and HND-FUE work). However, potential displacement effects from the Strategic Compensation Policy have not been assessed at this stage to be significant. The full environmental effects of the policy will depend on the details of implementation and the measures brought forward.

4.14.12 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.