Author: Ross McGregor, associate technical director
Progress, practicalities and remaining questions
In May 2026, the Scottish Government introduced The Conservation of Habitats and Species (Offshore Wind) (Miscellaneous Amendments) (Scotland) Regulations 2026, alongside supporting guidance. Together, these establish a new framework for addressing compensation measures for offshore wind projects that cannot demonstrate no adverse effect on site integrity for a Special Protection Area (SPA), Special Area of Conservation (SAC) or certain other Marine Protected Areas (MPAs).
Overall, the regulations and guidance represent an evolution rather than a fundamental change in approach. Much recent practice around compensation remains relevant, but the new framework introduces greater clarity and formalisation. Its strongest features are the creation of a clear compensation hierarchy, a consistent emphasis on proportionality and detailed guidance on how the regulations should be applied. However, challenges remain around evidence requirements, timing, monitoring and the treatment of compensation outcomes over time.
The compensation hierarchy: a welcome step forward
One of the most useful additions is the introduction of a three-tier compensation hierarchy. Tier 1 measures address the affected features identified by the Appropriate Assessment, ideally within the affected UK MPA. Tier 2 measures focus on “ecologically similar” features, while Tier 3 measures deliver broader improvements to the marine environment that benefit either the impacted feature or the UK MPA network more generally.
This hierarchy provides welcome flexibility, but its practical application may be less straightforward than it first appears. The guidance requires options to be assessed sequentially, with lower-tier measures considered only where higher-tier measures are unavailable. While logical from a regulatory perspective, this may not always support the most effective ecological outcome. In practice, a package combining measures across tiers may deliver greater benefits than a single intervention, particularly where several pressures affect a site.
Proportionality is a significant improvement
The emphasis on proportionality throughout the regulations and guidance is particularly encouraging. Requirements should be proportionate to the scale of predicted impacts identified through the Appropriate Assessment, and this principle applies to compensation tiers, evidence requirements and risk management measures.
Importantly, proportionality must be determined solely on ecological grounds. Cost, commercial considerations and project economics are explicitly excluded. This should support a more transparent and consistent decision-making process while keeping compensation requirements aligned with environmental impact.
Detailed guidance is useful, but uncertainty remains
The guidance provides welcome detail on the information decision-makers require when assessing compensation proposals. This should help developers understand expectations and improve the consistency of submissions. However, some terms are not clearly defined, creating scope for differing interpretations.
For projects progressing through the new process, this uncertainty is likely to require detailed engagement with regulators and stakeholders, particularly in the early stages of implementation. As experience develops and precedents emerge, many uncertainties may reduce, but in the short term they could add pressure to project schedules and consenting programmes.
Evidence requirements may prove challenging
The guidance outlines extensive evidence requirements for proposed compensation measures. While this provides transparency, the requirements appear highly prescriptive. The guidance states that evidence requirements should be proportionate to the scale of compensation being delivered, but offers limited clarity on which elements may be less critical where smaller or lower-risk outcomes are required.
This could create uncertainty for developers assessing the evidential standard needed for individual measures. Positively, the guidance acknowledges that additional ecological benefits, even where they relate to features that do not require compensation, can be taken into account. This wider recognition of environmental gains is sensible and pragmatic.
Greater clarity is needed on timing
Before the new regulations, compensation measures generally needed to be secured before consent could be granted. The new guidance uses terms such as “delivered”, “implemented”, “fully functional” and “realised” when describing timing requirements. Each has a distinct meaning, but the guidance does not always explain how they relate to regulatory expectations.
This creates uncertainty over what level of readiness is required before impacts occur. The guidance does, however, recognise the role of over-compensation where there may be timing mismatches between project impacts and ecological benefits, or uncertainty over how quickly benefits will materialise. This flexibility is helpful, but greater consistency in terminology would improve confidence.
Monitoring and banking compensation remains a concern
The most challenging aspect of the guidance may be its approach to monitoring compensation outcomes. It focuses largely on cases where project impacts are lower than predicted or compensation measures deliver greater benefits than anticipated.
Both scenarios are important, but given the precautionary approach typically applied to impact assessment and compensation design, many projects may ultimately provide more compensation than is strictly required. The guidance suggests these excess benefits cannot be transferred or “banked” for future projects.
This could affect the long-term availability of compensation opportunities. If effective measures are allocated to early projects and surplus benefits cannot be reused, future developments may face greater difficulty identifying suitable or cost-effective options. A more efficient system could allow measures to be implemented in advance, with ecological benefits quantified through monitoring and allocated to projects based on actual, rather than predicted, impacts.
Conclusion
Overall, the new regulations and guidance should be welcomed. They provide greater flexibility in compensation design, a stronger emphasis on proportionality and clearer expectations for decision-making.
Uncertainties remain around evidence requirements, timing and the long-term management of compensation outcomes, but many are likely to be refined through implementation and ongoing dialogue between industry, regulators and stakeholders. The shared goal is a compensation process that is proportionate, practical, evidence-based and capable of delivering meaningful ecological outcomes. The new framework is an important step towards that goal, even if further refinement will be needed as experience grows.