Government delays Clean Heat Market Mechanism

The CHMM aims to increase competition and drive down prices for clean heat technologies

The Government has announced plans to delay the launch of the Clean Heat Market Mechanism (CHMM).

Under the CHMM, fossil fuel boiler manufacturers could be fined £3,000 for each heat pump not sold. The aim is to increase the number of heat pumps installed in the UK and subsequently lower the cost. However, it’s been argued that the CHMM is unfair to traditional boiler manufacturers who could be forced to pass on their losses by increasing the cost of boilers.

Following a story in The Times in early February, suggesting that energy secretary Claire Coutinho was considering stepping away from the plans over concerns they were driving up boiler prices, the Government has now confirmed that the scheme will be put back to April 2025.

Speaking in the House of Lords at the beginning of March, Lord Callanan, minister for energy efficiency and green finance, confirmed that the CHMM would be going ahead, stating: “We will be implementing it because it is an essential part of meeting that 600,000 [heat pump] target and also, of course, our carbon budgets.”

Responding to the news, David Cowdrey, director of external affairs at MCS, the certification scheme for low carbon technology, said: “It is extremely disappointing to see that the Government has postponed one of the most important policies for getting the UK off fossil fuel heating. The Government needs to immediately set out plans for how it intends to fill the huge gap in heat pump plans that they have just created. We need clear and consistent policy more than anything, and without that the UK’s target of installing 600,000 heat pumps a year by 2028 is in serious jeopardy.”

Conversely, Mike Foster, CEO of the trade body Energy and Utilities Alliance, welcomed the delay: “This decision is clearly political, not about heating policy,” he said. “The Government has set a trap for a future administration, which, according to the polls, is likely to be Labour, knowing the boiler tax from 2025 is likely to be around £200.

“But it is an obvious trap, so obvious it has warning lights and bells attached. It could be up to Labour ministers to decide whether to go ahead with the boiler tax, but they have been warned, the public don’t like it; it hits the least well off the hardest and the whole policy needs to be revisited before it harms British companies and British workers.”

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