EUA calls for a halt to 'boiler tax'

The energy and utilities Alliance (EUA) has called on ministers to halt plans to tighten heat pump targets under the Clean Heat Market Mechanism (CHMM), after the government’s independent scrutiny body raised concerns about the evidence supporting the policy. The Regulatory Policy Committee (RPC) raised concerns about the decision to raise targets from 6% to 8%, saying the government had not clearly justified the increase and had failed to demonstrate that the benefits outweigh the costs.

The RPC’s assessment found that the shift from gas to electricity could drive higher household bills, with efficiency gains unlikely to fully offset increased running costs. It also highlighted gaps in the government’s analysis, including limited justification for raising targets, insufficient assessment of impacts on small- and medium-sized businesses, weak evidence on environmental and health benefits, and a lack of clarity on how success will be measured.

The Energy and Utilities Alliance (EUA) said the findings should prompt ministers to pause the policy before imposing further costs on consumers. Speaking at the European Heating Institute’s AGM, EUA chief executive Mike Foster said: “This is a policy that increases costs for households, yet the government cannot clearly explain why it is necessary to tighten the scheme at this stage. Ministers should not be asking families to pay more when the evidence base is incomplete and the benefits are not robustly demonstrated.”

Foster warned that pushing ahead risks creating uncertainty in the heating market at a time when the government needs industry investment to meet its decarbonisation ambitions.

“The government cannot point to any success of the CHMM other than increasing the cost of a boiler relative to that of a heat pump,” he said. “The policy is aimed at increasing supply of a product when we already have mountains of unsold heat pumps. What the policy should aim for is increasing demand.”

The EUA is calling for the CHMM to be scrapped entirely, urging ministers not to reintroduce it until a stronger, clearer evidence base is in place. “Decarbonising heat is an important objective,” Foster added. “But it must be done in a way that is affordable, proportionate and grounded in evidence. Until that standard is met, this policy should not proceed.”