Government proposes Energy Bill amendment in response to industry calls to incentivise HVO

The government has, this morning, released an amendment to the Energy Bill that mirrors proposals put forward by former environment secretary George Eustice in response to the industry’s Future Ready Fuels campaign.

Recognising widespread concerns over the potential financial impacts on rural off-grid homeowners of the proposed 2026 oil boiler ban and a ‘heat pump’ first strategy, the amendment, if accepted, enables government to incentivise a switch to renewable liquid fuels.

The creation of a renewable liquid heating fuel obligation comparable to the Renewable Transport Fuel Obligation (RTFO), which has been hugely successful since its introduction in 2008, would remove the financial barrier to the widespread adoption of HVO in domestic heating accelerating the decarbonisation of this sector.

The amendment requires parliamentary backing and will be debated next Tuesday but being government-led, is likely to be accepted. With the mechanism requiring a change of primary legislation, this will then lead to a period of consultation.

Technology agnosticism

The news of the proposed amendment follows yesterday’s announcement that the government will also consult on proposed revisions to the Boiler Upgrade Scheme including increasing the grants available for the installation of heat pumps in certain homes.

Together, these announcements are indicative of a government that has listened to genuine concerns around the ‘heat pump first’ strategy and its potential unjust impacts on rural communities. The move to a more technology-agnostic approach has been welcomed by the industry.

Commenting on today’s news, Ken Cronin, CEO UKIFDA, said: “I am pleased the government has listened and these announcements together will create a dual, technology-agnostic approach to rural home heating, which is what we requested.

“This is clearly excellent news and a significant step forward, and it comes after a tremendous effort from the industry but, with the requirement for a consultation, there is still a lot of hard work ahead of us.”