ECO 3 covers the future ECO for the period October 1 2018 to March 31 2022 and sets out the government's high aspirations and commitment to delivering these measures whilst adhering to the Clean Growth Strategy.

FPS chief executive Guy Pulham said: “Heating oil boilers will now be included in the ECO 3 scheme as part of the annual broken heating system cap of 35,000 systems and it is welcome news that BEIS recognises that replacing a heating oil boiler with an energy efficient condensing oil boiler rather than higher cost alternatives is the right solution.”

BEIS has said in the ECO 3 scheme that heating systems that are deemed to be inefficient will be permitted to be upgraded through the revised ECO outside of the broken heating cap if installed with insulation. Oil boilers will not be allowed under first time central heating (FTCH), district heating, solid walled homes minimum, rural minimum, inefficient heating system replacements or innovation measures.

Mr Pulham added: “We are not trying to protect the heating oil industry at all costs and we recognise and support the government's work to meet the 2050 carbon reduction target, but feel strongly that oil can be part of the solution, not the problem. 

“More than one million homes in rural England, Scotland and Wales are heated by oil as well as a further 250,000 businesses. 16 per cent of English households who use oil for heating are classed as fuel poor; the national average is 11 per cent. Including oil in ECO 3 helps to tackle the issue of fuel poverty.

“Modern, high efficiency oil condensing boilers are on average more than 90 per cent efficient. Installing an oil condensing boiler is an excellent way to reduce running costs compared with non-condensing boilers and a fuel saving of up to 30 per cent can be expected. A more efficient oil condensing boiler can also reduce CO2 emissions by 30 per cent.

“We consider that our sector can continue to deliver the most cost-effective method of heating to the off grid consumer; this can be seen under the recent report dated April 30 2018 by independent provider of home heating costs, Sutherland Tables, which indicates that heating a standard three-bedroom home in Great Britain is £1143 per annum compared to an air source heat pump radiator system at £1685 per annum, LPG at £1567 per annum, and electricity at £1913 per annum. 

“We understand designing policies to address the issues of both climate change and fuel poverty poses a significant challenge. We believe the heating oil industry has a vital role to play in helping the government reach the right decisions on the best way forward for off grid energy solutions. We recognise the work of the government to meet the 2050 carbon reduction target, but as we have stated previously oil and, more long-term, a carbon neutral fuel and/or bio fuel, can be part of the phased solution.”