In October 2023, Parliament passed legislation which opened the door to making Renewable Liquid Fuels more affordable for off-grid homes by introducing a Renewable Liquid Heating Fuel Obligation. This mirrors similar legislation in the transport sector which has been running successfully for nearly 20 years.
The legislation is subject to a consultation but it has not yet been published. Given this uses a tried and tested route, there’s no reason the government can’t move this forward immediately.
In his Autumn Statement, the Chancellor was also called upon to reduce the tax paid on renewable liquid fuels for heating. The request was not to be treated any differently but to afford renewable fuels the same tax treatment as in transport.
In transport, these fuels have the same tax as fossil fuels. In heating, the renewable fuel is taxed at a higher rate than the fossil fuel which clearly makes no sense. We are urging the Chancellor to rectify this at the next opportunity or in the budget.
For some properties, switching to a heat pump is an ideal solution and we fully support the use of the technology where it makes sense. However, many properties are simply not suited to heat pumps and will require disruptive and costly changes for them to work effectively.
These changes can include new radiators, better insulation, new piping and the reintroduction of the hot water tank. The total cost can be over £20k which simply isn’t affordable or practical.
Around 150 oil heated properties across the UK from homes, pubs, schools to churches have been using the renewable liquid fuel Hydotreated Vegetable Oil (HVO) for the past two years as part of our demonstration project.
It’s been a huge success! The switch from kerosene to HVO required a minor modification to the boiler at an estimated cost of £500. As a result, carbon emissions were reduced by 88%. Research shows there is more than enough sustainably sourced supply to meet demand.
That’s why renewable liquid fuels, with minimal upfront cost and disruption, are the ideal alternative solution. Our project is the perfect blueprint for more rural communities to follow as part of a wider rollout.
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