The UK government remains clear that electrification, alongside the continued expansion of renewable power, is central to its preferred pathway to decarbonising heat – and there is no doubt these technologies will play a major role.
Yet the current volatility also highlights the risks of relying too heavily on any single route to transition. In this opinion piece, Malcolm Farrow Director of Marketing and External Affairs at OFTEC, argues that a broader mix of solutions – including renewable liquid fuels alongside heat pumps – could deliver emissions reductions more quickly, more pragmatically and with greater fairness for the millions of off-grid households facing the greatest cost and practical barriers to change.
For most rural homes and businesses living off the gas grid, heating oil has long been a reliable and affordable choice of heating system. In fact, when you look at the data, it has consistently been the cheapest form of heating in the past few years, even when compared to mains gas.
While prices do fluctuate, we have seen time and again that when they go up they tend to come back down just as quickly. This track record of the fuel being a low cost option is why so many still depend on it today.
Of course, we need to recognise the current situation. The fluctuation in the price of kerosene, triggered by the unexpected conflict in the Middle East, is understandably incredibly unwelcome. Already in the middle of a serious cost of living crisis, any price increase is a significant challenge to families and businesses. It is a difficult time, and we welcome the support the government has provided to help people manage these costs.
We should also recognise the hard work and dedication shown by the liquid fuel heating industry. From the fuel distributors to technicians, people have been working around the clock to support their customers and keep their heating on in recent weeks. But as we look past the current challenges, we need to think about how we move forward.
Electrification urgently needs a rethink
Almost everyone agrees that we need to move towards cleaner, low carbon heating systems. This goal isn’t the problem. The challenge is how we get there. Even before the recent conflict in the Middle East, the cost of living was the top concern for most families. Now, the government is warning us not to underestimate how hard coming months will be.
In the current economic landscape, a rapid nationwide switch to heat pumps isn’t realistic. The scale of change needed in homes across the country is massive. While the government offers a £7,500* subsidy through the Boiler Upgrade Scheme, the grant covers less than half the full cost for many older, off grid properties. The reality is the money just isn’t there, neither in the government’s budget nor in the bank accounts of consumers.
We’ve previously discussed how it’s not just about money. Many older buildings may require disruptive upgrades, such as new radiators or better insulation, for a heat pump work effectively. Not to mention most heating systems changes are a distress purchase when households don’t have time to retrofit their property. So, whilst electrification and heat pumps have an important role, over reliance on them may have the perverse effect of slowing progress in the short to medium term.
Why renewable liquid fuels make sense
This is where renewable liquid fuels, like Hydrotreated Vegetable Oil (HVO), come in. The biggest hurdle for most people is the upfront cost of a new heating system. Renewable liquid fuels solve this problem because a 20% blend works immediately in the existing boiler without any intervention required. It’s a drop-in solution that doesn’t require a full-scale home renovation.
But what about the running costs? While kerosene prices have risen sharply, the price of HVO has remained much steadier. It has only seen a minor increase in comparison at the time of writing. Ironically, if the government had supported HVO years ago and equalised the duty so it was more widely available for home heating, consumers would have been in a much better position today.
Looking toward a secure future
Fuels such as HVO can be sourced from America, which removes some of the challenges of sourcing kerosene from the Middle East. As demand for these renewable fuels grows domestically, we expect to see more of it produced right here in the UK.
The response to the recent government Alternative Clean Heating consultation shows that people want this option. Nearly 16,000 rural households, heating technicians and fuel distributors responded to the consultation, urging the government to support renewable liquid fuels. They want to play their part, but they need options that are affordable and practical.
A pragmatic path forward
All households, not just those off-grid, are currently in a very challenging situation. It’s absolutely right that our immediate focus continues to be working with the government and as an industry to support consumers. But as we turn our attention to the future, we have to be pragmatic. Now is not the time for rash decisions based on the current situation.
A technology inclusive approach is the only way to make genuine progress towards net zero. This shouldn’t be an argument between heat pumps and liquid fuels. We need both. By supporting renewable liquid fuels alongside heat pumps, we can create a transition that is fair, affordable, and realistic for everyone, no matter where they live.
Malcolm Farrow Director of Marketing and External Affairs at OFTEC
* Editor’s note: figure correct at time of writing, subsequently increased to £9,000 for oil- and LPG-heated homes.
