CBI calls for 2025 gas boiler phase-out to keep net zero on track

The clamour for action to decarbonise the UK's heating supplies continues to grow, with two separate reports this week from major business and industry groups amplifying the urgent need for clear-sighted green heating policies to address what is widely seen as one of the single biggest challenges for building a net zero economy by 2050.

First up, an expert panel spearheaded by the UK's biggest business body, the Confederation of British Industry's (CBI), has urged the government to ban the installation of conventional gas boilers in all homes and businesses from 2025, arguing this would help stimulate demand for much-needed low carbon heating technologies such as heat pumps, hybrid systems and hydrogen-ready boilers.

Such a move would arguably go further than the government's existing policy, which at present only sets a target for green heating in new homes built from 2025.

The CBI's Heat Commission, however - which counts a host of academics alongside experts from the National Grid, KPMG, the Association for Decentralised Energy and the UK Energy Research Centre among its members - today said all homes and buildings, both new and existing, should only have either heat pumps, hybrid boilers or boilers capable of operating on low carbon hydrogen in five years' time. Oil-fired boilers, meanwhile, should be phased out even earlier, from 2023, it said.

Backed by a national energy efficiency programme to upgrade heat infrastructure and retrofit homes,  the report argued a ban on conventional boiler installations from 2025 would help prepare the UK for all heating systems to be zero carbon by 2035, which it said would be critical for delivering net zero across the economy by 2050.

And, in order to oversee the rapid shift to low carbon heating, it recommended the government establish an "Olympics-style" national delivery body to coordinate the process.

Dramatic action is needed, warned the Heat Commission - a group of academics and industry experts convened by the CBI and the University of Birmingham - as progress towards the UK's 2050 net zero emission target would be otherwise "doomed to fail" without a widespread rollout of green heating.

Martin Freer, Heat Commission member and director of the University of Birmingham's Energy Institute, said delivering a net zero heating supply was "the biggest energy challenge" in the UK's climage ambitions.

"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," Freer stressed. "There is not a single technology choice and the scale-up required in skills, manufacturing, distribution infrastructure and consumer engagement is huge. The level of coordination to deliver this needs to reach from the regional to national, with appropriate resource being devolved to the local level to be successful. The level of complexity and the urgency for change means the transition cannot be left to chance and a national delivery body is essential."

Heating accounts for more than a third of the UK's domestic carbon footprint, and domestic buildings - the overwhelming majority of which are equipped with natural gas boilers - are responsible for roughly half of all heating emissions. Yet businesses and green groups have repeatedly warned that progress on the decarbonisation of buildings remains far too slow to meet climate goals, with less than five per cent of home heating currently low carbon. In its net zero progress report to Parliament last month, the Committee on Climate Change said policy on buildings and heating "continues to lag behind what is needed".

The Department for Business, Energy and Industrial Strategy was considering a request for comment at the time of going to press.

Earlier this year, however, the government reaffirmed its plans to implement a so-called Future Homes Standard, which would require all new homes built from 2025 to be zero carbon. However, the government has yet to set out clear policy aimed at addressing gas heating in existing homes and businesses, although it has promised to publish a Buildings and Heat Strategy later this year.

Elsewhere in today's Heat Commission report, meanwhile, it also recommends that the government follow up on the £3bn energy efficiency funding package announced during the Chancellor's summer economic update earlier this month with further funding as well as the introduction of market mechanisms and regulations to encourage more consumers and businesses to invest in energy efficiency. Winter Fuel Payments, the tax-free heating allowance for over 60s, should be used to directly fund energy efficiency measures, it added.

Meanwhile, in order to help individuals and businesses navigate the different low-carbon heating options available to them, the report suggests that the government establishes a public information portal to provide targeted recommendations based on the building type and local energy infrastructure.

The commission also recommends the government collaborate closely with businesses and training providers to train and reskill the UK workforce to deliver the nationwide heat infrastructure upgrade, emphasising that local delivery of heat decarbonisation would be critical over the years to come, given that local infrastructure and systems frequently dictate the most appropriate low carbon heating solution.

And while conceding it was currently "too soon to say" what the UK's heating system would look like in 2050, the Heat Commission nevertheless urged the government to press on with "low-regrets solutions" for green heating by developing technology options and delivery mechanisms that can produce short-term results. Progress over the coming decade, it said, is important to lay a foundation for the mass deployment of low carbon heat required in the 2030s and 2040s.

Yet the Heat Commission's conclusions today also once again draw attention to not only the challenge, but the huge economic and climate benefits of decarbonising the UK's gas heating system. Mass decarboisation of heating in buildings could help develop new industrial sectors, services and skills, all of which are particularly important amid the looming Covid-19-driven recession, it said. 

CBI president and Heat Commission chair Lord Karan Bilimoria argued that aside from "the moral imperative, there's also a strong economic case for protecting our planet".

"Large scale heat decarbonisation and energy efficiency would provide a huge jobs boost for the economy at a time when new career opportunities are needed more than ever," he said.

The Energy Networks Association (ENA), which represents the UK's gas network companies, commended the report's conclusions, in particular its call for a phase out of conventional gas boilers by 2025. The trade body has itself made a number of high profile policy interventions over the past year aimed at encouraging support for transitioning the UK's gas grid to run on hydrogen, despite detractors warning such a move could be highly complex and costly if rolled out across the country. "Hydrogen-ready boilers are vital to ensuring that people have the clean heat they need in their homes at the times when they need it the most," said ENA chief executive David Smith. "So we welcome the CBI's recommendation that from 2025, all new boilers should be hydrogen-ready."

The CBI-led report's findings were also backed up by a separate report on net zero heat published this week, this time from the Net Zero Infrastructure Coalition, a coalition of private and public actors comprising Mott MacDonald, Engie, Leeds city council, National Grid, the UK Green Building Council and the University of Leeds.

Echoing the Heat Commission's sentiment and adding to the growing concern over the yawning gap in UK heat decarbonisation at present, the, the Net Zero Infrastructure Coalition described the policy conundrum as an "enormous challenge in infrastructure deployment previously unseen in the UK" which he said could significantly boost the bruised post-pandemic economy, if done well.

Published yesterday, the report presents three different heat decarbonisation scenarios, all of which outline the enormous scale of infrastructure investment required for the UK to successfully decarbonise its buildings by mid-century.

If the government choses to pursue an electrification strategy to decarbonise its building stock, the coalition estimates, electricity capacity would need to surge from 110GW today to 400GW by mid-century - a jump would require a huge five-fold increase in wind and solar-generated electricity, it said.

A hydrogen-led scenario, on the other hand, would require the rapid development and demonstration of new hydrogen technology across all aspects of the energy system over the next five years. Roughly 100GW of hydrogen capacity would subsequently be required to supply heat to more than 15 million homes and other non-domestic users. On this pathway, the UK's electricity capacity would still need to double to roughly 250GW to cater to the electrification of personal transport, the researchers estimate.

Finally, a hybrid approach that relies on both hydrogen and electrification solutions would require electricity capacity to jump to 280GW by 2050 and require between 30GW and 30GW of hydrogen production. Such a strategy has the potential to be the least infrastructure-intensive but would involve greater system complexity and optimisation challenges, according to the findings.

But whichever pathway is eventually chosen, the Coalition's project manager Ross Ramsay emphasised the transition to low carbon heating could generate manifold economic opportunities for the UK if it acts swiftly to provide a clear policy platform. "The technology, skills and know-how to decarbonise heat will be in demand globally," he said. "This scale of investment in decarbonising the heating of over 25 million UK homes, plus non-domestic buildings, will create new industries, jobs and apprenticeships at scale, and place Britain at the forefront of the race to net zero, giving scalable export opportunities."

With the government expected to release its hotly-anticipated Buildings and Heat Strategy later this year, it remains unlikely further policy clarity could emerge before the end of the summer. Until that strategy does eventually emerge, however, signs are pressure is only going to grow on the government to bring its heating policy in from the cold. 

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