Low carbon liquid fuels play vital role in future of off-grid heating says OFTEC in response to BEIS enquiry

OFTEC has responded to a call for evidence from the Department for Business, Energy and Industrial Strategy (BEIS) with a strong case highlighting the crucial role low carbon liquid fuels should play in decarbonising heat from rural homes.

BEIS’ ‘Future Framework for Heat in Buildings’ sought views and evidence from industry on actions which can be taken to phase out high carbon fossil fuel heating in off-grid properties during the 2020s. The findings will be published later this year and used to inform draft policy.

OFTEC’s submission focused on the introduction of reduced carbon liquid fuels as the most affordable and practical decarbonisation route for the 850,000 oil using homes in England and Wales. This should be achieved through a stepped pathway to achieving zero emissions by 2050 which includes:

  • the replacement of old, inefficient oil boilers with new high efficiency condensing models and energy efficiency controls via an incentivised scrappage scheme, providing immediate carbon wins
  • Financial support through ECO3 for fuel poor and low income families to achieve the conversion
  • The roll out of a low carbon liquid fuel with an agreed incremental reduction in the carbon content over time
  • Ongoing industry innovation to develop the next generation of appliances to meet the highest standards for efficiency and emissions.

In 2010, OFTEC conducted successful field trials of a low carbon liquid fuel called B30K (30% FAME/ 70% kerosene). The fuel is now commercially available and costs only slightly more than heating oil. More recently, OFTEC members conducted combustion tests on Hydrotreated Vegetable Oil (HVO) and kerosene blends from 60% to 100% HVO, with highly positive results.

OFTEC CEO Paul Rose comments: “The capability of the oil heating industry to innovate and meet the government’s decarbonisation agenda has not been adequately recognised. It is not boilers that produce carbon emissions, it’s the fuel they run on. Therefore, it is premature for government to consider regulating against oil heating when all liquid fuel boilers could be run on a low carbon alternative fuel before 2035. 

“A reduced carbon liquid fuel would offer an almost drop-in replacement for kerosene, overcoming the significant cost and practical issues of replacing an entire heating system. These barriers have been well documented as significant reasons for the poor take up of renewable technologies to date. There is also a well-developed and competent network of supply, installer and servicing businesses already in place who could continue to support consumers at little or no additional cost.

“A contact group has recently been established, providing a positive way for BEIS and industry to constructively work together and develop solutions. However, what industry needs before further steps are made, and is currently lacking, is a clear commitment from government that low carbon liquid fuels will be an accepted part of policy going forward. Innovation funding should also be made available to aid the development of an alternative fuel in the same way that support has been allocated to explore hydrogen options.”

OFTEC’s response also highlights the harsh realities of decarbonising off-grid housing stock.  An estimated 88% of off-grid homes currently fall into EPC band D or below and over 70% of rural properties have unfilled cavity or solid walls* making them difficult to treat without significant investment.

Without government support, most consumers simply can’t afford to improve their properties to EPC band C, the level at which renewable technologies such as heat pumps become a viable option. Even if they could finance the energy efficiency measures, rural consumers would still face the significant upfront installation costs of renewable technologies which start at c. £6,000 for an air source heat pump**.

This compares to a far more palatable £2,000 for a high efficiency boiler – and less if the initial cost is subsidised - which would still have the same heat output when converted to run on a low carbon liquid fuel, making the need for costly energy efficiency improvements to the home less important.

Paul Rose continues: “Cost will remain the most crucial consideration for homeowners and, with the majority of new installations made in distress purchase situations, consumers want quick, affordable solutions.

“For this reason, we think the best approach to carbon reduction lies in ‘greening’ the fuel itself rather than focussing on the appliance. Bringing a low carbon liquid fuel to market would overcome the issues associated with poor quality rural housing stock, minimise upfront costs for consumers and provide a practical, simple to understand alternative to kerosene.

“The next step will be to work directly with policy makers to develop a road map for the future of off-grid heating with clear milestones agreed so that a planned schedule of financial investment, development, testing and deployment can be achieved.”

* English Housing Survey 2015
** Energy Savings Trust 2018

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