Westminster Policy News & Legislative Analysis

UK Offshore Wind Compensation Rules Change from 21 May 2026

The Conservation of Habitats and Species (Offshore Wind) (Amendment etc.) Regulations 2026 were made on 8 May 2026 and come into force on 21 May 2026. The statutory instrument, published on legislation.gov.uk and signed by DEFRA minister Emma Hardy, was made under section 293 of the Energy Act 2023 after consultation and approval by both Houses of Parliament. The Regulations apply across England and Wales, Scotland and Northern Ireland, but they are targeted rather than universal. According to the Explanatory Note, they cover 'relevant offshore wind plans or projects' for which the Secretary of State is the appropriate authority, broadly including activity in UK offshore waters, the English inshore region and some activity in the Welsh and Northern Ireland inshore regions. The policy purpose is to set a bespoke compensation regime where offshore wind is allowed to proceed despite a negative habitats assessment.

The legal change is substantial because it amends both the Conservation of Habitats and Species Regulations 2017 and the Conservation of Offshore Marine Habitats and Species Regulations 2017. For relevant offshore wind cases, the familiar compensation duties in regulation 68 of the inshore regime and regulation 36 of the offshore regime are switched off and replaced with new provisions: regulation 68ZA for the inshore framework and regulation 36A for the offshore framework. The instrument also disapplies certain existing duties linked to the Habitats and Birds Directives when authorities are carrying out the new compensation function. In practical terms, compensation for these offshore wind cases no longer sits solely within the general habitats regime. It now operates through a dedicated statutory route created under the Energy Act 2023 and inserted into the 2017 regulations.

At the centre of the new scheme is a new duty to secure 'appropriate compensatory measures'. The Regulations say those measures must benefit the UK marine protected area network in a manner that is reasonably proportionate to the adverse effects, or predicted adverse effects, of the offshore wind plan or project on the integrity of the protected site. That wording matters. Under the new model, the legal test is not framed only around replacing damage at the affected site itself. The assessment is tied to the wider UK MPA network, while still requiring a proportionate response to the ecological harm identified in the assessment. The instrument therefore gives decision-makers a more explicit statutory basis for looking beyond one-for-one site replacement, provided the measures remain proportionate and pass the other tests in the Regulations.

The second major change is the introduction of a formal compensation hierarchy. The Secretary of State must publish the hierarchy for the inshore regime, and the relevant authority must publish it for the offshore regime. The hierarchy must set categories of compensatory measures, establish the normal order in which they should be selected, and explain when it may be appropriate to depart from that order. The default expectation is that compensatory measures should prioritise benefits to the features of the European site, European offshore marine site or Ramsar site that are, or may be, harmed by the project. The Regulations also allow an exception where other measures would offer greater ecological benefit to the UK MPA network. That creates a structured order of preference rather than a free-form discretion, but it still leaves room for wider ecological judgement where the evidence supports it.

The instrument then draws a clear line around 'wider compensatory measures'. These are measures that benefit the UK MPA network other than by benefiting the particular features directly affected by the project. Wider measures can still be used, but they require ministerial approval. Depending on the case, that approval must come from the Secretary of State, the Welsh Ministers or, in parts of the offshore regime, the Scottish Ministers. Governance is written into the regime in more detail than before. Guidance must be published on how compensatory decisions are to be made, including how proportionality to ecological harm is to be assessed. The appropriate authority must have regard to that guidance. Proposed revisions to the guidance and the hierarchy must be consulted on with the devolved administrations and, where relevant, the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. The Welsh Ministers are also given a choice in certain cases to publish their own guidance and hierarchy rather than rely on the Secretary of State's version.

The Regulations do not stop at individual consents. They also amend the planning framework for national policy statements, marine policy statements and marine plans where those documents include a relevant offshore wind plan or project. In those cases, the existing regulation 109 route is switched off to the extent that the negative assessment arises from the offshore wind element, and the new compensatory measures test is imported instead. That is a material drafting point for promoters and advisers because it brings compensation issues into plan-making as well as project authorisation. A compensation strategy may therefore need to withstand scrutiny not only at consent stage but also when offshore wind is embedded in a wider planning or marine policy document. The Regulations are designed to keep the compensation test aligned across those decision points rather than leave separate rules operating in parallel.

The final part of the instrument is about review and accountability. The Secretary of State must review both the regulatory provisions and any guidance issued in connection with them, with the first report due before 30 April 2031 and later reports at intervals of no more than five years. The review must consider the impact on the environment and on the offshore wind activity to which the regime applies. Parallel review duties are placed on the Scottish Ministers and, where they publish their own materials, the Welsh Ministers in relation to guidance and the compensation hierarchy. For offshore wind developers, that means compensation design is likely to become a more formal and evidence-heavy part of project development from an earlier stage. For regulators, the published guidance and hierarchy will become central decision documents. For environmental bodies, the regime offers more transparency about how offshore wind compensation is chosen, approved and revisited over time. From 21 May 2026, the statutory test for habitat compensation in these offshore wind cases is more explicit, more centralised and more tightly tied to the UK marine protected area network.