Our priorities remain to obtain support for the use of renewable liquid fuels in heating, through a financial mechanism similar to the Road Transport Fuel Obligation (RTFO), and by getting the duty on HVO aligned with kerosene. Both measures will enable HVO to be offered at an affordable price to end users.
Last year was our most effective yet in making the case for fuels like HVO, and we also succeeded in pushing back government plans to phase out oil heating from 2026 to 2035. However, readers should be in no doubt that government focus remains on electrification as the primary means to decarbonise heating.
This is true in almost all regions of the UK, and in the Republic of Ireland. Put simply, policy makers believe that by 2050 the primary heating for most buildings will be electric, and that this is the only way to achieve net zero.
Given that oil heating is a small part of the heating sector, as an industry we still face significant challenges in getting our message across.
Delays
We are particularly concerned that the Department for Energy Security and Net Zero (DESNZ) is delaying progress. Evidence from meetings and correspondence suggests that, far from being supportive of renewable liquid fuels, the department remains somewhat sceptical about the role fuels such as HVO will play.
The promised consultation has been pushed back to September and, with the expected General Election adding uncertainty, we have had to take action.
OFTEC and UKIFDA arranged for MP supporters to send a joint letter to the DESNZ minister, Claire Coutinho, which was backed up with a separate letter from the trade associations, setting out at length our concerns and requesting a meeting.
We also sent a detailed policy document to the Treasury, explaining the benefits of aligning the duty levied on HVO with kerosene, and asked that this be done as part of the Budget. MPs also supported this work, but as yet the Chancellor has not agreed to the change.
Alongside work with the Government, we are in direct contact with heat policy leads from Labour and the Liberal Democrats, with meetings taking place in an effort to influence their election manifestoes.
What’s happening in Scotland, Northern Ireland and Wales?
The Scottish Government’s consultation on proposals for its Heat in Buildings Bill closed in March. No consultation illustrates better the gap between what the Government is proposing, and what is actually practical, than this one.
The Scottish plan proposes to completely outlaw the use of any heating system that produces emissions at the point of use by 2045.
Any heating that results in direct emissions is termed a “polluting heating system” in the plans, so even the use of renewable liquid fuels will be banned. Conversely, heat pumps, electric boilers, storage heaters and other forms of direct electric heating are cited as examples of clean heating.
While it’s theoretically possible to fit a heat pump successfully in almost any building, cost and practicality are a significant factor in remote rural parts of Scotland where, as elsewhere in the UK, the housing stock is often old and thermally inefficient.
Worse still, the electricity grid will require considerable upgrading, costing billions of pounds. It’s notable that the consultation says nothing about the likely cost to consumers and the last thing we want is for households to be forced to rip out wet heating systems and go back to storage heaters!
So, as we did for the recent Welsh Government’s heat and buildings and net zero skills consultations, OFTEC and UKIFDA wrote a robust joint response. Political support in Scotland has also been forthcoming, with rural MPs and MSPs horrified by the plans, so we hope that a sensible compromise can be reached.
We will continue to engage constructively with both Westminster and all the devolved administrations around the UK to represent the liquid fuel heating industry and the needs of our customers.
Image credit: Mitchell & Webber
