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OFTEC Welcomes Government Commitment To Renewable Heat Incentive


Following the announcement of HM Government's Comprehensive Spending Review announced earlier this week, OFTEC has welcomed the news that the Renewable Heat Incentive (RHI) will still be introduced from April 2011. It had been feared that the scheme would be scrapped altogether, but the government has instead pledged £860m funding to support the installation of renewable energy technologies.

OFTEC Director Jeremy Hawksley said, “We have yet to learn the full details of the RHI, but we are pleased to learn that a levy will not be imposed upon oil or other existing heating fuels in order to fund the RHI. The original draft RHI contained incentives for a new generation of blended bio-liquids for heating (B30k) which could replace 100% Kerosene, and we urge the government to include those at the subsidy level which was originally proposed.”

A blend of 30% Fatty Acid Methyl Ester (FAME) manufactured from waste cooking oil, and 70% kerosene has been proven to reduce carbon emissions by 28% compared to conventional kerosene which is currently used by the majority of households on oil. Field trials carried out in Norfolk last year used this B30k blend to replace kerosene in around 25 sites, with no adverse effects reported to date.

Over 1.8 million oil heating customers in the British Isles could easily switch over to a lower carbon fuel, without having to replace their existing heating systems. Businesses could benefit too from the switch to bio-liquid heating fuel with minimum capital expenditure.

OFTEC believes that 90% of existing oil customers could transfer to bio-liquid by 2020. However, the amount of incentive is key. Under the original RHI proposals, bio-liquid users would be eligible for grant payments over a 15 year period. This is the minimum level of incentive needed to make bio-liquid economically viable for end users. Otherwise, OFTEC claims that heating oil users – many of whom are in rural areas – will be disadvantaged, and the government will be missing out on a big opportunity to reduce carbon emissions.

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