The off-grid heating sector in the UK is a well-established, mature market supporting 1.7 million homes that rely on liquid fuel heating.
Over decades, the industry has developed a strong infrastructure of consumer protections, high safety standards, and robust supply chains. Consumers rightly feel reassured that their current and future energy needs will be met in a safe and reliable way.
This strong foundation doesn’t mean the sector is resistant to change. On the contrary, innovation is a key feature as we continually learn and evolve. But that innovation depends on policy certainty.
Legislation plays a critical role in shaping the direction of the industry, and it must strike a careful balance between ambitious goals and practical realities. Unfortunately, recent years have demonstrated that this balance isn’t always achieved and the real-world consequences of that can be significant.
In theory, good policy is created through consultation with industry voices informing government about on-the-ground realities. This process helps to shape legislation that is both ambitious and achievable. But in practice, we’ve increasingly seen consultations launched without follow-up, legislative ideas floated without detail, and policies proposed but then delayed or quietly dropped. In the case of the Clean Heat Market Mechanism (CHMM) we also saw policies introduced despite the reservations from the industry being directly affected.
Lack of clarity
This lack of clarity leaves both consumers and industry in a state of limbo. For homeowners, it creates confusion about their options and responsibilities. For installers, suppliers, and manufacturers, it stifles long term investment, delays skills development, and curbs innovation. Businesses cannot make informed decisions when the goalposts keep moving.
One glaring example was the proposed ban on the installation of new fossil fuel boilers by the previous government. The plans were later reversed after the government realised they were fundamentally unfair, and that there were no fully suitable alternatives for off-grid households, but during that time it created huge uncertainty and anxiety for consumers and the wider industry.
Under the new Labour government, we’re seeing echoes of this pattern once again. One year in and key policy areas affecting off-grid homes remain unresolved with no immediate expectation of answers.
After years of waiting for the Conservatives’ Heat and Buildings Strategy, we’re now waiting for Labour’s Warm Homes Plan which has seemingly been pushed back to later this year. This means we again don’t know what the current future holds for oil-heated homes and whether support will be available for those wanting to switch to renewable liquid fuels. Until the details are published, the industry cannot effectively prepare, and consumers are left guessing.
Uncertainty around policy
Another example is the Boiler Upgrade Scheme (BUS) which offers grants to support the installation of low carbon heating systems. Labour’s commitment to BUS seems pretty clear, but we’ve seen how decisions can change, particularly when trying to balance the books. Given the challenging fiscal landscape, how long will the current £7,500 grant remain available? Will funding increase? Will eligibility criteria change again, as happened with the removal of required energy performance ratings?
Without a long-term funding commitment, it becomes difficult for consumers to plan their investments and for those across the oil heating sector – whether in manufacturing, installation, or fuel supply – to offer clear, confident guidance. Constant uncertainty around policy and scheme revisions undermines trust and stability across the industry.
This lack of clarity also affects the wider workforce. Government grants and support have encouraged individuals and businesses to diversify and adapt to changing market demands. But the future of such incentives remains unclear. For example, confirmation of the most recent round of Heat Pump Training Grant funding only came at the last minute.
All of this contributes to a broader hesitation across the sector. Businesses and workers alike are left questioning whether to invest time, money, and resources into new technologies or services without a clear signal of long-term demand or consistent government backing.
This comes at a pivotal time when we are meant to be accelerating our plans to reach net zero, not delaying. We are fully committed to playing our part in decarbonisation, but progress depends on clear direction from government. Without this, it’s hard to drive forward the training schemes and technology required to reach these goals.
Liquid fuel ‘ready to go’ solutions
This uncertainty and delay is also unhelpful because the liquid fuel heating sector has a ‘ready to go’ solution right now. In fuels such as Hydrotreated Vegetable Oil (HVO), we have an affordable, practical and viable alternative to traditional oil heating – and one that householders already support. What we need now is the legislative changes to make its introduction a reality.
We’re already seeing the government in the Republic of Ireland proposing measures to introduce the use of blended fuels. We need clarity here in the UK. That’s why we’re calling on the government to enable a market mechanism for renewable liquid fuels by implementing Section 159 of the Energy Act 2023, which will lower costs for consumers, and equalise the duty on these fuels with that of kerosene when they are used for home heating.
There’s no doubt the government faces a full policy agenda both here and abroad, but we all have a responsibility to drive forward our net zero plans. The current uncertainty is more than just unhelpful, it’s a barrier to greater progress. Speculative legislation and proposals create confusion and misinformation in the market.
To ensure a successful transition to low carbon heating, the government needs to continue to work closely with industry. The liquid fuel sector is ready to deliver but without a reliable legislative foundation, good ideas remain on the shelf and 1.7 million oil heated homes are left without certainty.
Image credit: OFTEC
