Renewable liquid fuel availability to far outweigh potential demand, leading the way for use in UK home heating oil market

Trade associations OFTEC and UKIFDA have written to the Prime Minister to outline growing concerns the government is planning to cut VAT on gas and electricity bills in the upcoming Budget but could once again overlook rural homes on oil heating.

Labour MPs have written to the new Minister for Energy Consumers, Martin McCluskey MP, at the Department for Energy Security and Net Zero calling for the government to support a renewable liquid fuel solution for oil heated homes in its upcoming Warm Homes Plan.

If the 1.7m oil heated homes in the UK each claimed the existing £7,500 government subsidy to switch to a heat pump, the total cost to the taxpayer could be billions of pounds. To achieve net zero, Labour’s current policy proposals are for the vast majority of oil heated homes to transition to a heat pump. To support with the upfront cost, a £7,500 grant is available from the government for eligible households through the Boiler Upgrade Scheme.

In the heart of Cornwall, the village of Kehelland is at the forefront of a project to demonstrate why the renewable liquid fuel Hydrotreated Vegetable Oil (HVO) is the ideal solution to decarbonising homes on oil heating.

A groundbreaking demonstration project saw dozens of residents and community buildings switch their home heating from kerosene to HVO, a low carbon alternative which drastically cuts emissions and only requires a minor modification to the boiler. The project not only enabled local residents to play their part in decarbonising, but also provided real word evidence of the effectiveness and practicality of HVO for domestic use.

We’re urging MPs in rural areas to support more affordable, low carbon heating options for the UK’s 1.7 million oil-heated homes. With Labour focused on heat pumps, many rural households risk facing costs of over £20,000 to adapt. Instead, we’re backing renewable liquid fuels like HVO, which cut emissions by up to 90% and work with existing systems, offering a practical, lower-cost alternative.

In a quiet corner of rural Essex, 75-year-old Sue Bright is doing her best to contribute to a greener future but like many off-grid residents, she’s facing barriers. With her home unsuited to a heat pump and her oil boiler still in good working order, Sue is calling on the government to support alternative low-carbon heating fuels like HVO.