As we step into 2026, one thing is already clear: the Government consultation published just before Christmas could prove to be one of the most significant documents our industry has ever had to respond to.
A long road to common sense
The consultation, titled ‘Exploring the role of alternative clean heating solutions to heat pumps and heat networks’, has been a long time coming. Back in 2021, the Government proposed banning the sale of oil boilers (starting six days ago, in fact) and implementing a ‘heat pump only’ policy, beginning with rural homes. Successive governments have since rowed back, and in October 2025, the current administration finally scrapped the oil boiler ban.
Their statement was clear: “We will continue to refine our approach and consider the supporting interventions needed to realise this outcome over the coming years. We will not take forward the previous government’s proposal (published in October 2021) to implement regulations restricting fossil fuel heating installations in off-gas grid properties by 2026, and will consult on any future proposals relating to off-gas grid homes.”
This was a hard-won outcome, achieved through persistence and collaboration across our sector. For the first time, this consultation acknowledges that heat pumps and heat networks may not suit every building and, crucially, that renewable fuels could be part of the solution. It also recognises that consumers deserve choice.
Still heavily weighted towards electrification.
Yet the consultation still leans heavily towards electrification. It uses the Levelised Cost of Heat (LCOH), an 18‑year discounted cashflow model based on electricity price forecasts through to 2041 and Treasury Green Book discount rates, with several assumptions about asset lifetimes.
This complex model raises a question: why 18 years? Because the Government’s view is that a heat pump lasts 18 years, while in their opinion, an HVO boiler would only last 15, meaning consumers would supposedly need two boilers for every one heat pump. The model ignores that HVO is a drop‑in fuel requiring no new boiler and that evidence shows boilers last at least as long as heat pumps.
Another question mark is electricity pricing. The model assumes 19p/kWh, far below today’s UK average of 28p/kWh and lower than what many rural customers actually pay.
Of course, our customers weren’t spending Christmas worrying about discount rates in 2041, which is why, on their behalf, we have written to the Government asking for clarity. Consumers deserve accurate, transparent information, especially that any government document shows the current cost of heating, particularly heating oil, which is especially relevant for our customers. The consultation ignores the realities households face by not concentrating on the cost to homeowners now.
Affordability cannot be ignored
The consultation archetype is a detached, 150m² off-grid home. While many of our consumers’ homes are large, they are also old, and we have questioned whether the age of the property might have been a more relevant characteristic to use. The consultation estimates heat pump installation at £16,900–£17,100, with annual running costs of £1,700–£1,750. Compare that to approximately 2,500 litres of heating oil at around £1,500 per year, and the consumer’s choice becomes clear.
Even with some energy bill costs shifted onto general taxation, electricity will not undercut heating oil at current rates. Affordability, not technical feasibility, remains the fundamental barrier. The consultation states 86% of our customers’ homes (based on government analysis regarding sufficient thermal comfort) could have a heat pump installed. But it simply ignores the cost.
As I often say: yes, I could technically have a Ferrari parked outside my house. But could I afford to buy it, insure it, or fuel it? No. The same principle applies here.
A practical path forward
Our industry has consistently proposed a pragmatic solution, which is to start decarbonisation now by introducing a new heating oil specification with a 20% renewable blend. Thanks to the Renewable Liquid Heating Fuel Obligation (RLHFO) approved last parliament and a no-cost duty change, this could be introduced immediately, with no upfront charges, no disruption, and no need to replace boilers or tanks.
Another fundamental issue with the consultation is that it seeks 100% solutions, i.e. 100% carbon savings, but ignores the principle of Net Zero, which recognises that some sectors will not meet the target.
It also overlooks the deliverability solution in the industry’s proposals. Our approach delivers real carbon savings equivalent to 347,000 heat pumps. To put that in context, fewer than 50,000 heat pumps have been installed under the Government’s Boiler Upgrade Scheme (BUS) in the past three years. And while mass heat pump rollout would cost taxpayers and consumers £2.5bn each, our solution costs nothing.
We need you
Over the past three years, alongside OFTEC, we’ve built a powerful consumer campaign: Future Ready Fuel. What began with a simple leaflet has grown into a movement, with thousands writing to MPs and Ministers.
Now is the time to reignite that momentum. As this edition of Fuel Oil News lands, we’re asking all distributors to reach out to their customers, explain why this consultation matters and encourage them to join the Future Ready Fuel campaign via its website.
We also urge everyone in the industry to submit their own consultation response. Later this month, we’ll provide guidance to help. Our message is simple: we can deliver a decarbonisation solution that works, it can start immediately, has our customers’ confidence, and respects consumer affordability and practicality. The more government hears this, the more they will listen.
Looking ahead
2026 will be a defining year. We have an opportunity to shape policy, protect consumer choice, and champion renewable liquid fuels as a credible, immediate path to decarbonisation.
So, as we raise a glass to the year ahead, let’s commit to making our voices heard. Together, we can ensure that common sense, affordability and practicality remain at the heart of the UK’s heating future.
Happy New Year – and let’s get to work.
Image credit: UKIFDA
