Habitats compensation for offshore wind: a closer look at the new draft regime

The UK Government has laid before Parliament the draft Conservation of Habitats and Species (Offshore Wind) (Amendment etc.) Regulations 2026 (“the 2026 Regulations”), and an accompanying Explanatory Memorandum, which mark  a structural adjustment to the way compensatory measures for offshore wind are to be treated. In parallel, DEFRA  has produced a policy summary of the reforms. 

The 2026 Regulations are made under powers in the Energy Act 2023. These are set to come into force on 21 May 2026. They will apply to UK wide offshore waters (i.e. beyond 12nm) and the inshore waters of England, Wales and Northern Ireland where the UK Government has jurisdiction. It is worth noting that the Welsh Ministers have the option to publish their own regulations, guidance and compensation hierarchy and the Scottish Government has already laid its own statutory instrument, the Conservation of Habitats and Species (Offshore Wind) (Miscellaneous Amendments) (Scotland) Regulations 2026, which will introduce a corresponding compensatory measures regime for offshore wind in Scottish waters and will publish further guidance in due course. 

The 2026 Regulations apply only to offshore wind and associated infrastructure, and do not extend to other offshore developments or development onshore.

My colleagues Jen Ashwell and Adam Richards explore the details below.

Purpose and Policy Direction 

The 2026 Regulations sit within the Government’s broader intention to streamline and accelerate offshore wind consenting, reflecting both the scale of the offshore wind build‑out required under the Clean Power 2030 mission and the long‑identified challenges in securing compensatory measures through the existing Habitats Regulations. 

At the heart of the reforms is a bespoke compensatory measures process for “relevant offshore wind plans or projects” under section 293 of the Energy Act 2023. This route is designed to maintain protection of the UK Marine Protected Area (MPA) network while resolving practical difficulties developers have faced in identifying feasible like‑for‑like measures under the current framework. 

To achieve this, the 2026 Regulations remove or modify certain duties that ordinarily apply under the Conservation of Habitats and Species Regulations 2017, and functions are instead governed by the new Energy Act compensatory measures regime.

Key Amendments at a glance 

1. Introduction of a mandatory compensation hierarchy: one of the significant reforms is the introduction of a statutory compensation hierarchy, set out in draft in DEFRA’s policy paper and to be elaborated through guidance to align with commencement of the new regulations.  The hierarchy is designed to prioritise the most ecologically beneficial, deliverable and strategic compensatory options, marking a shift away from the strict like‑for‑like paradigm that has historically raised challenges for offshore wind projects. In summary, the hierarchy: 

• Prioritises measures that most effectively address the conservation deficit for the impacted feature(s), but allows broader ecologically meaningful alternatives where justified by evidence; 

• Enables strategic or pooled measures, including mechanisms delivered through the Marine Recovery Fund (MRF), where these can achieve faster, more reliable or larger‑scale ecological improvements;

• Retains essential environmental safeguards.  The hierarchy is not intended to dilute legal obligations to secure adequate compensation to maintain the coherence of SAC/SPA site networks. 

This structure reflects the Government’s aim to offer greater realism and deliverability in compensation design while embedding safeguards consistent with international nature conservation commitments.

2. Disapplication of certain existing Habitats Regulations duties: rather than a duty to ensure the coherence of the national site network, there is reference to compensatory measures needing to “benefit the UK MPA network” in a manner which is “reasonably proportionate” to the adverse effect of the relevant offshore wind plan or project. The meaning of this terminology is due to be explained in the further guidance. The guidance will also explain what is meant by measures being “secured” and “in place” and circumstances when it may be appropriate for compensatory measures to be delivered post-impact. This reflects the shift away from the EU‑retained Habitats architecture for offshore wind compensation and towards a new, purpose‑built statutory process.

3. Ministerial Approval required for wider compensatory measures: where compensatory measures extend beyond the directly affected feature(s), for example, a strategic or pooled habitat enhancement, ministerial approval will be required before such measures can be deployed.  This step is intended to embed oversight and ensure consistency, particularly as new strategic measures are developed under the Collaboration on Offshore Wind Strategic Compensation (COWSC) programme.

4. Greater flexibility and improved deliverability: a central motivation for the reforms is the challenge developers have faced in identifying feasible compensatory measures under the existing Habitats regime, particularly where like‑for‑like measures have been scarce. The 2026 Regulations seek to avoid consenting delays by enabling:

• More flexible compensatory approaches, including strategic measures;

• Access to the MRF allowing developers to fund measures delivered regionally or nationally;

• A clearer, more predictable decision‑making framework, backed by forthcoming Government guidance.

Looking ahead

Further Government guidance is expected to be published when the new Regulations come into force in May 2026. That guidance will also explain a new concept of “marine irreplaceable habitats”, which appear to be distinct from MPAs. 

If you have any questions or queries in relation to the above then please contact Jen Ashwell, director, or Adam Richards, solicitor, in our Planning and Compulsory Purchase team.