Malcolm Farrow, OFTEC‘s Head of Public Affairs, discusses a low carbon replacement for heating oil called Hydrotreated Vegetable Oil (HVO).
It’s generally acknowledged that while the UK is making good progress with some of its climate targets, perhaps most notably power generation, in other areas we are lagging behind. This is particularly true in areas where consumer action is required.
Take low carbon heating, for example, where heat pump sales are still well below expectations. Generous government subsidies for heat pumps have been available for some time, but sales in the UK remain muted – lower than much of the rest of Europe. For the off-gas grid housing sector, regulations have been proposed from 2026 (2025 for new build) to outlaw the direct replacement of high carbon fossil fuel appliances such as oil or LPG. This would drive forward the deployment of heat pumps and the government made clear that the policy was designed to do exactly that.
But there is an increasing body of opinion that the date – less than three years away – is unachievable and potentially unfair, so a delay in implementing the proposals now seems likely.
But is a simple delay enough? While mandating heat pump installations may force progress, imposing a solution and removing consumer choice could be unpopular with the rural electorate.
Meeting the UK’s climate goals
A key barrier to heat pump deployment is cost, and there are important lessons that we need to learn. The recent by-election in Uxbridge and South Ruislip, where extensions to the Ultra Low Emissions Zone (ULEZ) became a decisive factor in the election, demonstrates that while consumers broadly support decarbonisation, they are sensitive to actions that mean they incur significant cost. This is a critical for the delivery of the UK’s climate goals – acknowledging that they can only be achieved by consent. Proposals that are too expensive are unlikely to be acceptable.
Of course, owner occupiers are not the only group affected by the need to decarbonise heating off the gas grid, nor are they the only ones facing difficult financial challenges. For organisations with off-grid property portfolios, such as councils and rural housing associations, the same issues often apply. While they may be better at communicating with their customers, they also face significant cost and acceptance challenges when installing heat pumps and improving their building’s energy efficiency.
Fortunately, less expensive solutions may soon be available. The liquid fuel heating industry has a fully tested low carbon replacement for heating oil called Hydrotreated Vegetable Oil (HVO), that is ready and waiting. It costs less than £500 to convert existing oil heating systems, compared to the significant costs of up to £30,000 to install a heat pump in off grid homes, and this delivers a carbon reduction of around 88% compared to fossil fuel heating oils.
Tried and tested
It’s a solution that has already caught the attention of housing associations. For example, beginning in 2021, the Northern Ireland Housing Executive (NIHE) looked at what cost-effective interventions in off grid rural homes could provide their tenants with improved energy efficiency, reduce carbon emissions and, potentially, lower running costs.
Six houses in Omagh, Co Fermanagh were chosen for a trial and a number of retrofit improvements were installed. On the heating side, three of the houses with an existing oil boiler had a 6kW air source heat pump installed and linked to the existing liquid fuel boiler as a hybrid system. To further reduce carbon emissions, these boilers were run on HVO. The others were fitted with a mix of air source heat pumps, electric battery, solar PV, and electric immersion systems.
A key learning aim was around cost-effectiveness for both the landlord and the tenant, as well as understanding how the tenants interact with unfamiliar technologies and tariffs. The idea was to try to fit the technology around the tenant, rather than vice versa. All the systems performed well, but in terms of CO2 emissions, the HVO boilers delivered the most rapid and significant reductions, while requiring the least behavioural change by the tenant, or retrofit by the landlord. It’s also worth noting that while hybrids were used in this case, boiler only systems could offer even cheaper and simpler retrofit options while still achieving dramatic carbon savings.
It is exactly the kind of friction free solution that consumers are demanding. The only catch is that HVO is currently more expensive than heating oil. However, this could be easily solved by replicating for heating the incentive scheme already in place when HVO is used in transport. Amendments to the government’s Energy Bill have been proposed by former Environment Secretary George Eustice to achieve this, and you can find out more on the Future Ready Fuel website.