The UK government has confirmed that the Clean Heat Market Mechanism (CHMM) will move forward despite rumours it would be reassessed due to a phantom ‘boiler tax’.
Announced by the Department for Energy Security and Net Zero (DESNZ) last December with an expected launch date of 1 April 2024, the CHMM will require heat pump installations to make up a 4% equivalent of manufacturer gas boiler sales in the first year, increasing to 6% in the mechanism’s second year.
The mechanism’s implementation appeared to be called into question, however, when multiple reports cited fears over a ‘boiler tax’ unwittingly caused by the scheme.
According to an article in The Times, a government source said ministers would be “looking again at the policy” before accusing boiler manufacturers of “indefensible price hikes.”
The increase in boiler prices would not be a pre-requisite of the CHMM itself but due to the independent decision of boiler manufacturers to hike up the prices of their products.
Juliet Phillips, UK energy lead for think tank E3G, summarised: “The so-called ‘boiler tax’ is a scam created by the manufacturers. The clean heat market mechanism does not require them to raise the price of boilers.”
Rumours that the CHMM could be scrapped were quashed last week. During an oral question session on heat pumps at the House of Lords on 6 March, Lord Callanan, Conservative member of the House of Lords, responded to a question on scrapping the ‘boiler tax’ by saying: “There is no such thing as a boiler tax, and therefore it is impossible to scrap it.”
To clarify the government’s position on the CHMM, Lord Callanan continued, “We will be implementing the Clean Heat Market Mechanism because it is an essential part of meeting the 600,000 heat pumps installed per year by 2028 target and our carbon budget.”
It was not confirmed during the meeting whether the launch would move from its original April 2024 date.
