Briefing

MGN 681: New lithium‑ion battery rules – key updates for yacht owners

A quiet shift with major consequences

MGN 681¹applies to all vessels carrying lithium-ion batteries for small electric craft (water toys, tenders, personal watercraft). It is aimed at commercial yachts, charter yachts, and other large yachts registered under the flag of a Red Ensign Group member, including the UK, Cayman Islands, Gibraltar, Isle of Man, and several other British Overseas Territories.

Even if your vessel isn’t Red Ensign-flagged, MGN 681 is widely recognised as best practice across the industry.² Other regulatory bodies have introduced their own separate requirements; owners should check with their individual flag state, classification society and their insurers.³

Insurers may consider compliance with MGN 681 as best practice and something that a reasonably prudent owner would take into account when managing its yacht. An owner choosing not to follow the MGN may be asked by insurers to demonstrate the implementation of alternative measures providing at least an equivalent level of safety. In certain circumstances, an insurer may consider that non-compliance may give rise to grounds for them to pull cover.

The publication of Amendment 1 to MGN 681 by the MCA at the end of 2025 represents a significant development in the regulations. While framed as “guidance”, the amendments to MGN 681 materially change the expectations around the storage, charging and management of lithium‑ion batteries carried onboard small electric craft and water toys.

The changes impact e-tenders, e‑foils, Seabobs, electric personal watercraft (PWC) and drones, and extend far beyond fire safety policy and reach into design decisions, refit considerations, chartering obligations and insurance.

In this article we look at what has changed, why it matters and what practical steps owners should be taking.

Why was MGN 681 updated?

Lithium‑ion batteries are now ubiquitous on yachts. Over the past decade, more and more equipment used on board a yacht is powered by or contains a lithium-ion battery. Electric water toys have transitioned from being occasionally encountered novelties to an expected onboard amenity.

Industry data shows that fires (increasingly those with unexplained origins) are a significant cause of yacht-related claims. Industry awareness continues to grow following the loss of M/Y KANGA in 2018 which Transport Malta attributed to a lithium-ion battery fire.⁴ The fire on board the M/Y FLAGSHIP in 2024 was also confirmed by the US National Transportation Safety Board (NTSB) to have been caused after the lithium-ion batteries on board went into thermal runaway.⁵ It is also believed that a fire in January 2025 that damaged three yachts in Port de la Lave, France, was started by a lithium-ion battery.

Against this backdrop, the MCA concluded that traditional approaches and treating electric toys like petrol‑powered equivalents was no longer appropriate.

What has changed?

The original MGN 681 focused largely on best practice. Amendment 1 puts the onus on owners to have in place functional and performance‑based requirements, particularly for battery charging and storage arrangements.

1. Certified charging and storage only

The most important change is that lithium‑ion batteries may now only be charged onboard within a certified container or space meeting the standards set out in the MGN. Informal solutions, such as charging on open racks, in deck lockers or in unprotected garages, etc. are no longer considered compliant.

2. Containers must do more than “contain”

Charging cabinets are no longer passive fire‑resistant boxes. Amendment 1 sets out explicit functional expectations, including:

Temperature‑rise detection and automatic alarms
Automatic shutdown of charging in the event of overheating or fault
Fire‑suppression capability without opening the container
Controlled off‑gas venting to prevent explosive atmospheres
Defined and validated maximum battery capacity (kWh) per container
Fire insulation and explosion‑resistant construction

These requirements are codified in paragraphs 4.12 to 4.13 of the amended MGN and represent a higher bar than many legacy installations can meet.

The certification deadline owners cannot ignore

By1 January 2027, all lithium‑ion battery charging and storage containers on UK‑registered yachts must be certified by a UK Nominated Body⁶ as meeting the requirement of MGN 681 Amendment 1.

While existing installations may remain in use until that date, the MCA has made it clear that early replacement is “strongly recommended”. A prime opportunity to consider this is if the yacht is undergoing major refits or upgrades in the next year.

Implications for owners

Budget and refit planning

Compliant battery cabinets are substantially more complex and expensive than earlier solutions. The cabinets fitted to larger yachts will require integration into the yacht’s current onboard systems which will include: power supply, ventilation, sensors and alarms, fire suppression. The cabinets also need to be explosion resistant and capable of withstanding a thermal event without rupturing.

Ventilation is likely to require significant work as the compartments are to be provided with ducted mechanical ventilation capable of extracting toxic and explosive gases released during a battery fire, and this needs to be separate from the other ventilation system onboard.

Charter and commercial considerations

For commercial yachts operating under the Red Ensign Large Yacht Code, MGN 681 is effectively mandatory.⁷ Non‑compliance with these requirements may result in:

Detention and restriction
The vessel being considered as unseaworthy for the purposes of chartering
Loss of insurance cover

Insurance and liability exposure

Failure to follow MGN 681 may expose owners to coverage issues or reduced recovery following a casualty or notification of a claim, particularly where charging practices can be shown to fall below published standards. Underwriters are increasingly likely to scrutinise compliance with MGNs as part of any investigation into causation as whether an owner was following best practice in the management of the yacht.

What should owners be doing now?

Given that there is less than a year to implement the requirements under MGN 681, we recommend that all owners and/or their managers adopt a structured approach to determining what onboard measures may be required to ensure compliance:

Audit all lithium‑ion batteries onboard, including toys, tenders, drones and spares
Assess the existing storage and charging arrangements on board against the requirements set out in MGN 681 Amendment 1
Engage flag, class and insurers early to check and verify what is required – particularly if you are planning any type of refit or repair work
Install certified equipment rather than interim fixes that may require subsequent revision
Update onboard procedures and crew training to reflect the new risk profile

MGN 681 is not simply about buying a compliant cabinet; it requires a system‑based approach to fire prevention and operational discipline that should be updated and reflected in the onboard documentation for the yacht.

To assist, we have prepared the following checklist for owners to use with the five-point action plan above:

Scope & applicability confirmation
Is the yacht subject to MGN 681 (UK / Red Ensign Group flagged, or following REG Yacht Code)?	MGN 681 Cayman Island Ship Registry	✓
Is the yacht subject to some other equivalent requirement to MGN 681?	USCG Safety Alert 14-15	✓
Does the yacht carry any form of lithium-ion powered craft?	• Tenders • E foils / jetboards • Seabobs / underwater scooters • Electric PWCs • Drones • Spare lithium ion batteries	✓
Is the yacht operating commercially, privately or dual use?		✓
Inventory & risk assessment
Create a full inventory and record the following details (as a minimum) for each lithium-ion battery on board	• Manufacturer and model • Individual battery capacity (Wh / kWh) • Charging method and charger OEM approval • Normal storage location	✓
Conduct or update a formal lithium-ion battery fire risk assessment for each battery		✓
Incorporate findings into the yacht’s SMS / operational risk register		✓
Storage & charging location review
Identify all battery storage and charging locations onboard	Confirm that: • Batteries are not charged in open lockers, garages or accommodation; and • Charging does not take place near fuel, lubricants or flammable stores	✓
Verify that any dedicated charging space complies with Section 14.1 of the Large Yacht Code (LYC) (or its equivalent) and/or is being replaced by a certified cabinet		✓
Charging & storage container compliance
Confirm all lithium-ion battery charging is conducted only within compliant containers or approved spaces		✓
Ensure containers meet all functional requirements set out in MGN 681	This includes: • Charging capability with container closed • Temperature rise detection and alarms • Automatic charging shutdown on fault or overheating • Fire suppression without opening container • Controlled off gas venting • Fire insulation and explosion resistant construction • Defined and validated maximum capacity (kWh)	✓
Check the cabinet is suitable for the total installed battery capacity (not just number of toys)		✓
Certification & approval
Check whether existing cabinets are already certified by a UK Nominated Body		✓
Where cabinets are to be replaced, ensure all containers will achieve UK Type Approval by 1 January 2027		✓
Documentation	Ensure that copies of the following are retained on board: • Certification documents • Test reports • Manufacturer compliance statements	✓
Electrical systems	• Check that the electrical supply is properly rated and protected • Integrated with vessel power management • Confirm compatibility with original equipment manufacturer (OEM) chargers only • Ensure alarms are audible and visible and integrated with ship alarm monitoring where required • Confirm forced ventilation or off gas management does not compromise vessel safety	✓
Fire detection	• Confirm that the detection systems are appropriate for lithium ion fire risks • Check that the crew can identify signs of thermal runaway and respond to alarms appropriately • Confirm emergency procedures address: o Toxic gas release o Re ignition risk o Prolonged cooling and isolation	✓
Confirm flag state and/or class acceptance of selected solution		✓
Crew training & procedures
Update on board documentation and plan crew training and drills	• The on board procedures should be updated to address: o Battery handling o Charging schedules o Fault reporting	✓
Train the crew	• Conduct crew training covering: o Lithium ion fire characteristics o Container operation and alarms o Emergency response actions	✓
Record training in vessel logs and crew records		✓

HFW has significant experience advising on the complex risks associated with the carriage of lithium‑ion batteries, supporting clients to navigate evolving regulatory frameworks, allocate risk, and manage fire and casualty exposure across the shipping lifecycle. If you are interested in finding out more about HFW’s work in this area, or require guidance, please contact our team.