Renewable Liquid Heating Fuel

In my constituency, the small village of Kehelland has been taking part in a fascinating pilot, organised by local fuel distributor Mitchell & Webber. Residents, the local school and the chapel have all taken part in the switch to the use of HVO. I met them shortly before Christmas and found that the results were fascinating. Typically, fuel consumption is around 30% to 35% lower than for kerosene. Residents reported slightly higher temperatures in their radiators. The local chapel made a very good point, which is that it only needs heat intermittently—that is, when communities are using the hall. It does not want an air source heat pump running continuously to keep temperatures high; it wants to be able to switch that energy off and on, which makes this an ideal solution.

The Government have long recognised the value of renewable fuels in the transport sector. We have the renewable transport fuel obligation, which requires fuel manufacturers and importers to purchase a proportion of fuel from renewable sources. The Bill would extend the RTFO mechanism to cover the use of renewable fuels in domestic boilers and remove the current duties from these renewable fuels, which are entirely counterproductive.

The intended impact of my Bill is to reduce the cost of HVO so that it can achieve parity with kerosene. If we get parity of cost with kerosene—the cost of conversion is modest—we will see a very rapid adoption of HVO. The key thing is that, if the Government were to target carbon emissions, the incentive to use renewable fuels would become quite obvious. The challenge is that the Government are not so much targeting carbon with their current strategy, as targeting the adoption of a chosen technology. They have chosen a winner in air source heat pumps, and that is how they are measuring their success. The risk that they face with their current strategy is that people will put off the decision to make that huge capital expenditure in air source heat pumps. They will patch up their boilers to keep them going, replacing parts when they might otherwise have replaced the whole boiler. That means that the current strategy is unlikely to yield any results in carbon reductions until at least carbon budget 6 in the mid to late 2030s. The great advantage of my proposal is that there would be a rapid uptake of HVO within carbon budget 4—literally within the next four years. Within those four years, we would see a dramatic 88% reduction in carbon emissions.

In conclusion, if we are to meet our net zero ambitions and those crucial carbon budget staging posts in the meantime—4, 5 and 6—the key is to make it as easy as possible for people to make the change. The easier we make it and the more effort we put into making sure that they do not need to change their way of life, the faster the uptake will be; and the faster we get uptake, the quicker we will get to net zero.

I welcome the fact that the Minister for Energy and Climate, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), has listened to this speech. The Government have forthcoming responses to two consultations in this area, and they have a wonderful Energy Bill that is ripe for amendment—I look forward to it returning to this House. I hope that my right hon. Friend the Minister will engage further with this proposal, but, for now, I commend the Bill to the House.

That George Eustice, Sir Gary Streeter, Kevin Foster, Anne Marie Morris, Mr David Jones, Jim Shannon, Ben Lake, Sir Mike Penning, Mr Robin Walker, Selaine Saxby, Ian Paisley and Derek Thomas present the Bill.

George Eustice accordingly presented the Bill.