Clean heat market mechanism delayed: comment

Commenting on the news that the Government has scrapped the implementation of the Clean Heat Market Mechanism until April 2025 [1], Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU) said: "The Secretary of State and no. 10 have clearly given in to 'big boiler' manufacturers, which Claire Coutinho herself accused of 'price gouging' just a few months ago, despite Ministers that are closer to the details reportedly threatening to quit if the scheme does not go ahead. It seems that only these few Ministers understand how important heat pumps are for energy independence, a lesson that the US and EU learned at the start the gas crisis.

“This is another backwards step for the UK’s energy security. As long as we rely on gas boilers, we'll increasingly have to import gas from abroad as the North Sea continues its inevitable decline.

“By pushing to delay the scheme, the boiler companies imposing their ‘boiler tax’ claim to be on the side of consumers, but Citizen's Advice is clear that scrapping the scheme would ‘hurt’ households leaving them vulnerable to volatile international gas prices. Will the boiler companies now give back their boiler tax they have already imposed despite the scheme not having started and now being delayed?

“Clear, stable and long-term policy is the number one thing that investors ask for from leaders. While the wider economy stagnated, the net zero economy grew 9% last year. Delaying this policy is another signal adding potential political risk for investment in the UK."

Previous ECIU analysis found that scrapping the Clean Heat Market Mechanism could result in the UK’s gas demand in 2035 being more than 70TWh higher than it could have been, which could result in the UK needing to import around a fifth (19%) more gas [2].

ECIU analysis also found that the top four gas boiler manufacturers in the UK could be set to make more than £100 million by increasing their prices by an average of £110 per boiler [3].

ENDS

Notes to editors:

1. Statement from Claire Coutinho: https://questions-statements.parliament.uk/written-statements/detail/2024-03-14/hcws341 and consultation from DESNZ: https://www.gov.uk/government/consultations/clean-heat-market-mechanism-adjustment-to-scheme-introduction-date/clean-heat-market-mechanism-proposal-to-change-the-scheme-start-date-to-1-april-2025
2. Government giving into ‘big boiler’ could leave the UK importing 20% more foreign gas: https://eciu.net/media/press-releases/2024/government-giving-into-big-boiler-could-leave-the-uk-importing-20-more-foreign-gas
3. Gas boiler firms could make over £100 million from so-called “boiler tax”: https://eciu.net/media/press-releases/2024/gas-boiler-firms-could-make-over-100-million-from-so-called-boiler-tax

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: +44 (0)7894 571 153, email: george.smeeton@eciu.net