Are UK boiler manufacturers risking their own future? – Opinion

Dr Richard Lowes, Research Fellow at Exeter Uni, explains why boiler manufacturers should embrace the Clean Heat Market Mechanism, rather than fight against it:

The UK has signed, along with nearly every other country around the world, an agreement to limit greenhouse gas emissions in order to limit climate change. In the UK we also have a specific legal target to be ‘net-zero’ by 2050 at the latest. This means basically no greenhouse gas emissions after 2050.

For heating, this implies all oil and gas replaced by 2050 and heat pumps, powered by increasingly green electricity, are the most important technology for this transition. But the UK’s progress has been slow, partly due to bad policy choices over the last decade (and more), a big one being that the plans to make new homes zero carbon in 2016 were scrapped. From 2026, boilers are finally expected to be banned from new homes.

The delays of the past decade mean that heating now has to be cleaned up very quickly. The war in Ukraine has also sharpened minds around the UK’s exposure to gas imports. There is a government target to install 600,000 heat pumps a year in the UK by 2028. The Government’s own climate advisors suggest this number should be higher.

But even with the ban on fossil fuels in new builds from 2026, and an expected ban on oil boiler installs from a similar time, there is a big gap to be filled.

This is where a proposed policy, the ‘Clean Heat Market Mechanism’ comes in. The idea is that an obligation is placed on boiler manufacturers so that a certain percentage of their product sales need to be heat pumps. If the target for 2028 were 10%, it means that for every 1000 boilers sold, you’d have to sell 100 heat pumps and the percentage level would be set to increase each year.

The scheme would have some flexibility and allow heat pump installations to be traded between manufacturers. This policy is almost identical to the one being placed on car manufacturers to encourage electric vehicles. The policy recognises the importance of appliance manufacturers and gives them a key role in the clean energy transition. But apparently, boiler manufacturers do not like this idea and their trade body the EUA told Installer that the policy was ‘out of touch’ and ‘absurd’. The ‘way forward’ referred to in the previous article would totally kill the scheme by basically allowing boilers to count as clean heating systems. It seems like they want it dead and to be able to keep selling boilers forever.

The thing is, as slow as change is in the UK heating appliance sector, it is changing. Vaillant has opened a heat pump manufacturing line in the UK, (Worcester) Bosch is set to launch a range of high-temperature heat pumps in the UK imminently, Octopus has bought heat pump manufacturer RED and despite all the negativity, last year was the UK’s best ever year for heat pump install numbers. With many other countries ahead of the UK, it seems like this is only going one way.

And this is really what the proposed government scheme is supposed to do, guarantee a growing market and stimulate investment so that the UK’s large boiler manufacturing sites switch to manufacturing heat pumps – their parent companies all have heat pump businesses elsewhere.

Far from risking UK jobs, the proposed policy could protect them. The bloody-mindedness of parts of the sector around hydrogen and keeping gas going for as long as possible is a big risk for UK manufacturing. If the transition to renewables happens faster than expected which with some innovations looks quite possible, and hydrogen never emerges which seems very likely, the UK could end up importing its heat pumps at scale. This could make the existing manufacturers who have failed to adapt, extinct.

It doesn’t need to be this way. Gas boilers will be around for some time to come, with a ban on installs not planned until 2035. But gas boiler production levels will reduce over time and the heat pump sector will be growing year on year. Perhaps now is the time to act and maybe it is time to start working with the grain, rather than against it.

Dr Richard Lowes is Research Fellow at Exeter Uni, Senior Associate at global energy think tank the Regulatory Assistance Project, a non-executive director at the Scottish Government. He lives in a heat-pumped and solar-powered Victorian Terrace in Falmouth, Cornwall.