The rarest of green initiatives: something that works and we know consumers will welcome
2023 can be the year we get the policy foundations right to support future heat decarbonisation.
As the days lengthen and winter’s grip weakens, many people in the UK will breathe a collective sigh of relief and hope for better times and lower energy bills ahead. No doubt our leaders will be hoping for the same. The sense of political crisis that has gripped the nation for much of 2022 has abated slightly, but the government still faces many very difficult challenges. A central policy focus is driving economic growth. But with local elections due this year and national elections in 2024, it must balance the need to make hard economic choices with the political imperative of rebuilding its popularity. This will be no easy task.
Heat policy is one area where the government is in an unenviable position. Legal targets mean that action must be taken quickly – not least because heating is responsible for nearly a quarter of all UK carbon emissions – but action costs money and collectively we are in a parlous state. UK consumers, as elsewhere in Europe, are still experiencing high price inflation, limiting their spending power, and the government cannot afford the generous green subsidies that are likely to be necessary. With deadlines looming, it faces some unpalatable choices; if it sticks to its original off-gas grid heat policy plans, the costs to rural consumers will be high, and the consequences could be politically disastrous.
At OFTEC we want to help the government ease this burden on consumers whilst still supporting the drive to net zero. We know that households and businesses are more likely to embrace change if it is easy and inexpensive. Our HVO field demonstration, involving up to 150 domestic and non-domestic properties, has captured the imagination of all involved with it. It’s so easy, you simply change the fuel, adjust the boiler and your carbon emissions fall by 88% - it’s no wonder the participants are excited and eager to tell their stories. Its meant the project has generated some positive headlines, gaining welcome political interest that has now translated into action.
Recently, a bill was launched in the UK Parliament to put in place the measures that would enable HVO to be supplied for heating at a cost closer to traditional heating oil. However, to be successful, the government must be persuaded to support the plan, effectively modifying their stated pro-electrification heat policy.
A key benefit of this approach is that the support required could be cost neutral to the government. Another is that the industry is ready to deliver the solution. A third is that it enables immediate progress towards achieving carbon budgets in a way that consumers will support. Importantly, it also need not deflect the government from its heat pump objectives. It makes them more achievable because attention can focus on easier wins, rather than attempting to force their deployment into hard-to-retrofit rural buildings, with all the potential challenges that poses.
In short, it’s that rarest of green initiatives, something that works and that we know consumers will welcome. However, convincing the government to give consumers the choice will not be easy and OFTEC, working with our industry partners, is doing everything it can to make the case. Alongside the obvious merits of HVO, the evidence that more options are needed is stacking up. After seven months of operation, the government’s Boiler Upgrade Scheme, which is designed to support the deployment of heat pumps, has spent less than a third of its annual funding. The reasons for the poor uptake are likely to be complex, but high installation costs and the current economic headwinds will be key factors.
Fortunately, there is still a window of opportunity to make the necessary corrections to policy. The government has not yet published its responses to earlier consultations on decarbonising off-gas grid heating, it’s Biofuel Strategy is still in the works, and the Energy Bill is still being discussed in Parliament.
This means 2023 is likely to be a critical year for the future of the liquid fuel heating industry, and for everyone potentially affected by the government’s heat decarbonisation plans, most notably rural households and businesses. Let’s hope it is a positive one for all concerned.
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.