Perfect storm as oil heated homes face major costs for government’s green energy plans amid cost of living crisis

‘Perfect storm’ as oil heated homes face major costs for government’s green energy plans amid cost of living crisis

Thursday, May 12, 2022 By OFTEC

Alongside rising energy and food bills, oil heated households could soon face additional costs to install green heating systems if government plans go ahead.

The warning comes after the local elections where the cost of living became one of the key issues on the doorstep as households struggle with rising bills.

In October last year, the government published its Heat and Buildings Strategy which proposed that, from 2026, households on oil heating will not be able to install a new fossil fuel oil boiler once their existing one breaks down and needs to be replaced.

Instead, in most cases, they will be expected to replace their system with a heat pump which currently cost around £11,000. However, because rural properties tend to be older and poorly insulated, households often face additional costs and disruption to improve their energy efficiency for the technology to work effectively.

It is estimated 1.7 million households in the UK are reliant on oil heating.

OFTEC, the trade association for liquid fuel heating, is concerned that oil heated homes are being unfairly treated under the plans, which will see homes on mains gas able to replace their boilers like-for-like for an extra nine years up until 2035.

Malcolm Farrow, from OFTEC, is urging the government to consider alternative solutions: “Whilst it’s clear all homes will need to adopt greener heating systems, the current approach by the government is creating a perfect storm. The reality is the vast majority of rural homes, including those on oil heating, are older and poorly insulated. This means heat pumps are less effective unless expensive and disruptive energy efficiency improvements are made.

“The government has said fairness must be front and centre of the move to green heating so we need to recognise that many homeowners are already struggling with the rising cost of living. It’s vital we take a more practical, realistic and affordable approach, using all the low carbon options available.”

OFTEC says instead renewable liquid fuels could be the solution to helping rural homes go green. Through an industry funded demonstration, over 100 oil properties from homes, businesses and schools to churches have been converted to run on a fossil-free fuel called HVO which is made from used cooking oil and reduces emissions by 88%.

HVO is a near drop in replacement fuel which means it works in existing oil heating systems following a simple conversion to the boiler and removes the need for expensive energy efficiency upgrades.

Malcolm added: “Renewable liquid fuels offer a realistic way for rural homes to go green and the demonstration project for HVO has been a huge success. However, we need the support of the government to make the fuel more widely available.

“There are already incentives for the use of renewable liquid fuels in aviation and road transport so we are calling for this to be extended to include home heating. We urge oil users to engage with their local elected representatives if they want the choice of switching to a greener, cleaner fuel.”

Further information about HVO can be found at

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