Government may scrap ‘boiler tax’ after campaign

Clean-heat mechanism fines boiler makers for missing heat pump quotas

A £3,000 fine will be paid by boiler makers for each heat pump installation they fail to deliver Credit: Shutterstock

The government is considering whether to scrap its incentive scheme to encourage boiler manufacturers to sell heat pumps. 

The Clean Heat Market Mechanism (CHMM), modelled on the zero emissions mandate being introduced in the car market, is designed to ensure manufacturers install a certain number of heat pumps for every fossil fuel boiler they sell. This will initially be one heat pump per 24 boilers from April, when the scheme is due to start, but the ratio will become more demanding over the years. 

Manufacturers will have to pay a £3,000 fine for each heat pump installation that they fail to deliver. 

However, after a campaign by the gas boiler industry, which labelled the CHMM as a ’boiler tax’, the Sunday Times reported on 4 February that Secretary of State for Energy Security and Net Zero Claire Coutinho is planning to scrap the scheme. This has sparked a backlash from some in government, however, with the Times subsequently reporting that minister of state for climate Graham Stuart has threatened to quit if Coutinho scraps the CHMM. 

Several manufacturers have increased the price of their boilers to mitigate the cost of paying the £3,000 fines if they miss their heat pump installation targets. Justifying its decision to raise the price of its boilers by £120, Baxi said in a statement that it would have to sell 100 times more heat pumps to escape a fine. 

The manufacturer counters as ‘unfounded’ the accusation that it is profiting from the CHMM surcharge. It says the targets set by government for heat pump installations are ‘entirely unachievable’ and will cause ‘significant harm’ to Baxi’s business, and risk its ‘ability to continue to operate’.