The publication of the consultation for the establishment of the Marine Recovery Fund by the UK Government represents a major step forward in removing one of the key barriers to deployment of offshore wind in the UK.
For offshore wind developers, navigating the requirements of the Habitats Regulations has frequently been more challenging than the choppiest conditions in the North Sea. To obtain their key consents and meet those requirements, the vast majority of offshore wind projects are required to deliver compensatory measures for impacts on protected habitats and species as part of a “derogation case”. Compensatory measures are intended to offset the impacts on protected habitats and species which are predicted to arise as a result of the proposed offshore wind farm. Under the Habitats Regulations, it is the duty of the consenting authority to secure the delivery of compensatory measures.
To date, individual offshore wind developers have proposed measures intended to offset their own impacts: no more, no less. However, the industry has long recognised that clubbing together can result in the speedier delivery of more effective ecological compensation than the individual developers acting alone. For the largest projects, strategic compensation can provide the necessary scale of compensation required to offset impacts. For smaller projects, developers can contribute to a larger measure instead of delivering their own project-specific measure, the cost of which may be disproportionate to the size of the project and the ecological impact.
Originally announced back in 2022, the Marine Recovery Fund provides a strategic solution to the need to deliver ecological compensation. Developers pay into the MRF to fund one or more pre-approved compensation measures which have the buy-in of key environmental stakeholders. The existence of pre-approved measures avoids the need for lengthy debates during the consenting process as to the efficacy and suitability of a particular compensation measure proposed by an individual developer.
The April consultation on the MRF provides many of the answers to the questions posed by industry and is a much-needed confidence boost that the current Government is truly committed to removing blockers to the deployment of offshore wind. The MRF will be managed by Defra and is expected to be up and running by autumn 2025. There is a lot to achieve in that time, including passing secondary legislation, resourcing up the civil service to manage the MRF and put all the necessary financial systems in place. Adequate resourcing of both Defra and statutory nature conservation bodies, who have a critical role in developing the compensation measures forming part of the MRF, is fundamental to the success of the MRF. Otherwise, the root cause of delay will simply move from the consenting process to the MRF application process.
A separate MRF is planned for Scotland, intended to be based on similar principles to the UK MRF. Scotland cannot afford to take a “wait and see” approach. Tangible progress on the development of the Scottish MRF must be made quickly to prevent further delays to the deployment of Scottish offshore wind projects and to avoid Scottish projects losing competitiveness against their English counterparts.