The Marine Recovery Funds Regulations 2025 (SI 2025/1230) were made by the Secretary of State on 24 November 2025, laid before Parliament on 25 November 2025 and come into force on 17 December 2025. Using powers in sections 292 and 331(2)(a) of the Energy Act 2023, the instrument establishes Marine Recovery Funds (MRFs) to finance measures that compensate for adverse environmental effects from relevant offshore wind activities. The Regulations extend to England, Wales, Scotland and Northern Ireland.
The regime aligns with the Energy Act 2023 definitions: “adverse environmental effects” in section 291(4), “relevant offshore wind activity” in section 290, “marine recovery fund” in section 292(2) and “consent” in section 295(1). In practice, the Regulations create a pathway for developers to discharge, in whole or in part, a compensation condition attached to consent by making an MRF payment into a fund overseen by the Secretary of State.
The Secretary of State may establish one or more funds and decide which offshore wind activities are in scope for payments into and out of a given fund. A fund may be UK‑wide, limited to a single territory, or cover any combination of England, Scotland, Wales and Northern Ireland. Where a territory‑specific fund is created, compensatory measures may be delivered within that territory’s inshore or offshore region, or outside it, consistent with the territorial definitions in section 295(2) of the Energy Act 2023.
The Secretary of State must operate and manage each MRF but may delegate these functions. Delegation to a Scottish, Welsh or Northern Ireland public authority requires the consent of the Scottish Ministers, the Welsh Ministers or DAERA respectively and may be limited to a particular territory. Delegations can be cancelled following consultation, and cancellation does not prevent the Secretary of State from exercising the functions directly. The department may reimburse costs incurred by another person in operating or managing an MRF on its behalf.
Before any MRF monies are used to deliver or acquire a compensatory measure, the Secretary of State must approve that measure. Approvals may limit geography or duration and can cover measures already delivered in full or in part. For transparency, the Secretary of State must publish a list of approved measures to inform applicants and consenting authorities.
The application process is set administratively by the Secretary of State. It may include an expression of interest, an initial agreement to make a proposed MRF payment, and a deposit or reservation fee to hold an approved measure. Applications may be run in defined windows, may be abridged where consent has already been granted, and can be transferred to another person. Procedures can differ between funds and be amended over time. Reservations can cover whole measures, parts of measures, or a combination.
An application can only be approved once the authority that imposed the compensation condition has determined how far an MRF payment would discharge that condition. On approval, the Secretary of State allocates sufficient approved measures to address the whole condition or the relevant part, sets the MRF payment amount and its terms, and offers an MRF contract. Payment amounts may include contributions for developing measures for approval and for subsequent monitoring and adaptation.
Each MRF contract must identify the offshore wind activities, the adverse environmental effects being compensated, the compensation condition, the allocated measure and the expected outcomes. It also sets out the payment amount and terms and specifies the monitoring period during which outcomes will be assessed.
To recover administrative costs, the Secretary of State may charge fees to MRF applicants or participants. Fees can be non‑refundable and may be set, in whole or in part, by reference to the estimated value of the approved measure. The Secretary of State must publish details of the application procedure, the fee schedule and any amendments to either.
Payments into an MRF may be made by the Secretary of State, by an applicant in anticipation of contracting, or by a participant under a contract. Once a participant pays either the whole amount or the first instalment, responsibility for delivering the allocated measure passes to the Secretary of State, who must deliver in accordance with the contract.
Payments out of an MRF may support the development and approval of measures, delivery of all or part of approved measures whether or not allocated, acquisition of approved measures already delivered, and the monitoring, adaptation and decommissioning of allocated measures. The structure enables both strategic commissioning and project‑specific delivery.
During the monitoring period specified in the contract, the Secretary of State must assess whether the allocated measure is achieving its expected outcomes. Where outcomes are not being met, or could be achieved more appropriately, the Secretary of State may adapt the measure, replace it with another approved measure, add an additional approved measure, or combine these steps. Adaptations do not affect a measure’s approved status. Measures may be decommissioned at or after the monitoring period, or prepared for allocation to another applicant.
Funds initially created for fewer than all UK territories may be extended to additional territories. The Secretary of State may also close all or part of a fund to new applicants, subject to consultation with the devolved administration for any affected territory, and must continue to manage existing contracts. Any consultation on cancelling a delegation or closing a fund must allow a minimum of 12 weeks.
Before making the Regulations, the Secretary of State consulted the Scottish Ministers, the Welsh Ministers and DAERA, as required by section 292(12) of the Energy Act 2023. The instrument was signed for the Department for Environment, Food and Rural Affairs by the Parliamentary Under Secretary of State, Emma Hardy, on 24 November 2025.
For developers, the Regulations create a centralised contractual route to finance environmental compensation. Consenting authorities remain responsible for determining the extent to which a payment discharges a project’s compensation condition, while the Secretary of State assumes delivery responsibility once payments begin. Project teams should plan for reservation deposits, potential non‑refundable fees and the inclusion of monitoring and adaptation costs in the MRF payment, and align consent milestones with application windows.
Environmental delivery bodies and supply chains may see opportunities to bring forward measures for approval, including measures delivered ahead of allocation to a project, given that funds can acquire already delivered approved measures. The Secretary of State’s powers to adapt or replace measures embed performance management and long‑term monitoring into contracts.
The Regulations enter into force on 17 December 2025. DEFRA must publish the MRF application procedure, fee information and the list of approved measures. An impact assessment and an Explanatory Memorandum are available from DEFRA and are published alongside the instrument on legislation.gov.uk.