Putin's boot back on our throat – Government delays could leave households reliant on foreign imports

In total, by 2035 the Clean Heat Market Mechanism and Future Homes Standard could displace around 300TWh (terawatt hours) of gas, the equivalent needed to heat 9 out of ten (26 million) homes for a year, or gas contained within around 340 LNG tankers.   

The increased imports would be required even if North Sea Transition Authority estimates of gas that could be extracted from new fields and future discoveries in the North Sea is achieved in full [2]. 

 Lord Callanan, former Minister for Energy Efficiency and Green Finance at the Department for Energy Security and Net Zero. said: ““Corporate lobbying from the gas boiler industry and housebuilders against the roll out of heat pumps amounts to getting in the way of our national security. The industry’s spreading of misinformation about heat pumps and scaremongering around a boiler tax that they themselves invented clearly resulted in the  Government giving in and lowering the penalties for non-compliance.” 

Jess Ralston, Energy Analyst at the ECIU, said: “There’s no two ways about it, we need to move away from gas boilers if we want to stop the rollercoaster of bill increases that are a result of our reliance on volatile gas prices and to avoid becoming ever more dependent on gas imports. North Sea gas output has been declining for years and that is only going to continue whereas electricity from offshore wind that can power heat pumps is growing. 

 “Even if we max out the North Sea, our gas imports will rise unless we reduce our dependence on gas boilers because the UK’s own gas reserves are running out. Parts of the housebuilding industry have lobbied against better build standards that would have saved new homeowners hundreds of pounds on their energy bills over the past few years and left the UK more dependent on foreign gas. It is a matter of national security.” 

Last year heat pump sales reached nearly 100,000 in the UK, an increase of around two-thirds (63%) on the year before [3] and analysis from Ambient [4] has shown that January 2025 was a record month for heat pumps with nearly 5,000 installed, an increase of around a quarter. One in five new homes were fitted with a heat pump in the first month of 2025, up from around one in ten in January 2024. In addition, the Government’s Boiler Upgrade Scheme, which provides £7,500 grant funding for households replacing their gas boilers, saw applications rise by nearly 80% on the year before.  

The Clean Heat Market Mechanism [5], set to be implemented from 1st April, requires fossil fuel boiler manufacturers to sell an increasing proportion of heat pumps relative to their fossil fuel boiler sales, designed to drive up competition in the market. The Government recently confirmed it will decrease the fines for each heat pump missed to £500, from an already reduced level of £3,000, with concerns being raised that this lack of incentive will no longer result in the policy successfully reducing UK gas dependence. The policy is expected to reduce gas demand by 60TWh in 2035, equivalent to c.15% imports, by installing the expected 8.4 million heat pumps. Over 2025-2035, the savings would be around 200TWh, equivalent to around 17 million homes worth of gas for a year or gas in over 230 LNG tankers.  

 If the Future Homes Standard, tighter standards for new builds, does not ensure new homes are fitted with heat pumps, the UK’s gas demand could be another 20TWh higher in 2035, adding another 5% to required gas imports in that year. Over the period 2025-2035, avoided extra gas would reach around 100TWh, equivalent to gas used in around 8.5 million homes for a year or in over 100 LNG tankers. The Future Homes Standard has been subject to a series of delays within Government, and although it is meant to be implemented in 2025, the technical specification or timelines have not yet been released [6].  

At the start of 2024, some gas boiler manufacturers introduced a so-called ‘boiler tax’ of £110, on average, per boiler. They claimed it was required to cover the costs of any penalties incurred by failing to meet the required level of heat pump sales. Despite calling it “price gouging, plain and simple” [7], and asking the Competition and Markets Authority (CMA) to investigate [8], the Secretary of State at the time, Claire Coutinho, delayed the scheme’s introduction by a year.  

It was reported that one trade body for the boiler industry, the Energy and Utilities Alliance, campaigned against heat pumps in the UK [9] during this period. Some of the members of this trade body manufacture or sell both gas boilers and heat pumps, either in Europe or the UK. A gas company was also found to have potentially mislead consumers over their claims on hydrogen boilers in an investigation by Sky News, with a subsequent CMA investigation finding that it should undertake steps to avoid misleading consumers [10]. It has also been reported that major housebuilders lobbied against previous new home standards which led to them being scrapped in 2016, and more recently against the Future Homes Standard [11]. 

The Sunak Government also increased grant funding under the Boiler Upgrade Scheme to £7,500 for an air source heat pump and applications tripled the week after, with applications remaining nearly 60% higher in the weeks following. January 2025 saw 80% more applications than January 2024, which itself was an increase of 40% on January 2023 [12]. It also confirmed that it was committed to introducing the Future Homes Standard in 2025.  

However, late in 2024, the Starmer Government announced that it would reduce the fines for non-compliance from £3,000 to £500, which had already been lowered from the original £5,000. Concerns were raised that this would not be enough of a deterrent and would result in less gas boilers being replaced by electric heat pumps [13], leaving the UK’s gas demand higher. As the North Sea continues its inevitable decline, unless the UK reduces its gas demand, then gas imports will have to rise.  

Currently, heat pump manufacturing sites in the UK include those in Cornwall, Derbyshire, Northern Ireland and Scotland [14]. A UK Government study showed that heat pumps are highly efficient, typically 3x more efficient than gas boilers, in the UK even down to -6C [15]. An earlier study also found that “There is no property type or architectural era that is unsuitable for a heat pump”, “from Victorian mid-terraces to pre-WWII semis and a 1960s block of flats” [16]. 

Notes to editors: 

1. This analysis was conducted on the following basis: Under the CHMM between 1st April 2025 and 31st March 2026, around 100,000 heat pumps are required to be sold in the UK in total, which is around 6% of the 1.8 million gas boilers currently sold every year, with the percentage rising in future years. This analysis considers a scenario in which sales of heat pumps for existing homes rise to 100% by 2035. The Future Homes Standard is due to be implemented in 2025, but there have been successive delays to the policy being confirmed and technical specification released.  This analysis assumes annual building rates of 200,000 in 2025, rising to 300,000 by 2028. The gas saved per heat pump in an existing home (CHMM) is the difference between the gas demand for a home rated EPC C with a gas boiler (9,600kWh/yr) and the gas used in power generation for a heat pump which will fall as more renewables come online (following the ‘Government Targets’ scenario in Getting off Gas (ECIU, 2023)).  The gas saved for a new home (FHS) uses the same process, but assumes EPC B gas demand (8,100kWh/yr). Future gas imports are estimated as the difference between future gas demand (from the ‘Government Targets’ scenario in Getting off Gas (ECIU, 2023) i.e. c.510TWh in 2035) and UK gas production (from Oil and Gas Production Projections (NSTA, Sep 2024) i.e. c.115TWh in 2035 even with new fields and future discoveries), giving imports in 2035 of just under 400TWh. Without the CHMM, demand would be 60TWh higher in 2035, which would increase imports by the same amount which amounts to an extra 15%. Without the Future Homes Standard, demand would be another 20TWh higher in 2035, adding another 5% to required gas imports in that year. 
    
2. North Sea Transition Authority (2023). 
    
3. The Heat Pump Association (2025). 
    
4. Ambient (2025). 
    
5. HM Government (2023).  
    
6. Future Homes Hub  
    
7. LBC (2023). 
    
8. Sky News (2024) 
    
9. The Guardian (2023). 
    
10. Competition and Markets Authority (2024) 
     
11. The Guardian (2024). 
     
12. HM Government (2025). 
     
13. Installer Online (2024). 
     
14. Kensa manufacture in Cornwall, Vaillant manufacture in Derbyshire, Octopus Energy in Northern Ireland and Mitsubishi Electric in Scotland.  
     
15. Energy Systems Catapult (2023). 
     
16. Energy Systems Catapult (2022).