CBI: UK won't reach net-zero without 2025 ban on non-hydrogen-ready boilers
The CBI has warned that the UK is unlikely to meet its 2050 net-zero target without sweeping policy changes on heat, including the creation of a National Delivery Body and a requirement for all boilers to be hydrogen-ready by 2025.
Earlier this year, the CBI formed a new heat commission with the University of Birmingham, in a bid to help policymakers and business leaders tackle what it describes as the “colossal” challenge of decarbonising heat in the UK.
This week saw the commission publish its first major report, providing UK policymakers who have previously been accused of “lacking credible plans” to decarbonising heat in line with long-term climate targets with key policy recommendations.
According to the report, the technological solutions currently available for heat could tackle the bulk of emissions for the sector, provided that greater local and national coordination on key installation initiatives is achieved.
Its overarching recommendation is, therefore, the creation of a National Delivery Body – an independent body which would work with policymakers and civil servants to help them create and deliver an overarching heat decarbonisation programme. BEIS is expected to publish its Heat Strategy this autumn, so the CBI would like the Body created either ahead of, or as part of, this announcement.
The report goes on to make 12 additional policy recommendations, designed to bring existing technologies to maturity and to bring down their cost through economies of scale, and to give businesses the long-term certainty they need to invest in emerging technologies.
From 2025, all new domestic boiler systems should be ‘hydrogen-ready’ or part of a hybrid system, the report recommends. Then, from 2035, no new natural gas-fired boilers should be installed in any UK building. Oil-fired boilers should be phased out even more rapidly, with no new domestic installations from early 2023.
According to the report, these moves would create the market signals needed to scale up the UK’s air-source and ground-source heat pump sector and its hydrogen sector, and should be complemented by further funding for heat networks – particularly those which enable waste heat from heavy industry to be captured and used. The Committee on Climate Change has previously recommended that at least 18% of the UK’s heat consumption should be met with district heating networks by 2050.
“Delivering decarbonisation of heating is the biggest energy challenge we face in getting to net-zero,” report co-author Professor Martin Freer said.
“Unlike electricity, which can be changed at a systems level, it requires over 20 million households to adopt new energy efficiency measures and new ways of generating heat.”
Carrots and sticks
To complement new mandates, the report states that BEIS should develop incentives for low-carbon heat which extend beyond the current Renewable Heat Initiative (RHI).
The RHI was due to end in March 2021 but was recently expended to 2022 as a result of green protests and Covid-19. BEIS and the Treasury are proposing a Clean Heat Grant, which would offer funding support of up to £4,000 for each household or business, to replace it.
The CBI recommends that the Clean Heat Grant should last until 2027 or 2028, have a clear end date to encourage early adoption and become less generous over time, replacing grants with loans. Such an initiative would work well in tandem with the introduction of the Future Homes Standard, the report states.
At the same time, a low-carbon heating obligation should be created for housebuilders and industrials and the Gas Safety Management Regulations should be updated to allow the injection of hydrogen into the gas grid. Existing UK legislation prevents hydrogen accounting for more than 0.1% of the national grid mix at any time. The highest proportion of hydrogen in the gas mix in a UK network is 20%, recorded at Keele University as grid-injected hydrogen trials continue.
Last year, the Science and Technology Committee’s ‘Clean Growth: Technologies for meeting the UK’s emissions reduction targets’ report outlined a lack of replacements for the RHI as one of the 10 major shortfalls of Government efforts to date to reach net-zero emissions by 2050.
The recommendations of the CBI report have received support from National Grid, the Energy Systems Catapult, the Association for Decentralised Energy (ADE), the UK research centre and the Committee on Climate Change.
“[Heat] is going to move to centre stage in the years to come, so we really welcome this CBI report, which gives us a sense of what a net-zero compatible package of measures might look like,” CCC chief executive Chris Stark said.