Comment on Clean Heat Market Mechanism (CHMM)


11 April 2024



Spencer Clark, Head of Residential Business Unit Daikin UK, said: “It’s great to hear that Lord Callanan, Minister for Energy Efficiency and Green Finance at the Department for Energy Security and Net Zero (DESNEZ), confirm that the Clean Heat Market Mechanism (CHMM) will be implemented as planned on 1st April.

“At a time when we need be building up the availability and efficacy of low carbon heating, this confirmation is a positive step and signal of intent from the Government that it has not given up on its commitments. It will help to boost confidence in the sector and foreign investments and will have a significant positive impact on the growth in green jobs.

“The CHMM will place an obligation on the manufacturers of heating appliances to meet targets for the proportion of low-carbon heat pumps they sell each year, relative to fossil fuel boilers. With a £3,000 fine on manufacturers for every missed heat pump sale, the mechanism would help to incentivise the industry Only if these funds were available centrally for all Heat Pump manufacturers to access to contribute toward MCS registered installations for ALL manufacturers to, reduce prices, and rapidly increase the pace of deployment. These types of incentive have worked well historically in the car industry to support the roll out of EVs.

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“However, there are several shortfalls in the current proposal for the CHMM, with both gas boilers and air- to-water heat pumps sold to new build properties not included in the calculation. Concerningly, there is also currently no airtight audit process confirmed. The plan is for sales volumes to be taken at the factory gate, which does not adequately ensure fossil fuel boiler companies

accurately report sales figures and are not profiting from the mechanism. The audit trail needs to be transparent and cross referenced with other industry figures (New Build Stats 2024).

“It’s also important that educating consumers on the energy and long-term cost savings of heat pumps comes alongside the mechanism and current Government funding, to help drive uptake. We urge DESNEZ to amend plans to incorporate a rigorous audit process for the CHMM. The department should also work with the industry to coordinate communications and deliver an effective UK-wide consumer education campaign on renewable forms of heating.”