A personal view by Mike Foster, CEO of EUA

19th Oct 2026

 

“Hello, I’m back” – the Clean Heat Market Mechanism returns to the agenda

Like a bad penny, the Clean Heat Market Mechanism is back on the agenda of the government and its impact on the backs of the UK consumer (with British boiler manufacturers in the middle).

A new consultation has been announced, and it is right that we hear the views of our members over the coming weeks about what we say publicly, but here are my private thoughts.

Firstly, the policy misses the point. It suggests that the supply of heat pumps to the market is the issue preventing wholesale switching to the technology, whereas we all know the issue is the lack of demand. (The new Energy Secretary, when she was a junior Minister, acknowledged this at the time).

The policy’s design penalises manufacturers financially and they have no choice but to pass this cost on. It will go to merchants, then installers before VAT is then added when the consumer pays. It really should be a policy that consumer groups pick up and champion opposition, but they don’t.

Boiler manufacturers also face huge administrative costs associated with the scheme, disproportionate to the actual task in hand. It is almost as if Whitehall doesn’t mind penalising those involved with “fossil fuels.”

There is some good news on the face of it, in that new building heat pumps can now qualify towards the target – and we should take that win (we made this argument years ago) but the principle objections to the scheme still remain.

The targets set are arbitrary; they bear no resemblance to what is happening in the market for heat pumps. If demand falls, tough, the target stays and the fines increase. That is simply unfair on those who are targeted and ultimately the consumer who pays.

Rather like excise duty on alcohol, the levy is hidden in the price of a pint (beer tax effectively and it is generally understood as such); that’s how the CHMM works, it increases the cost of a boiler, no wonder the label “boiler tax” sticks.