Over the past four years, liquid fuel has emerged as the most cost-effective option for domestic heating, consistently beating other common fuel technologies in terms of average running costs. According to the independent Sutherland Tables, which track annual heating costs across different technologies in Great Britain, Northern Ireland, and the Republic of Ireland, liquid fuel heating has provided households with the most affordable way to keep their homes warm.

A Clear Leader in Heating Costs

The latest comparative data for June 2020 to June 2024 highlights that liquid fuel heating systems—especially condensing liquid fuel boilers—are the most economical for an average three-bedroom property in Great Britain. The annual running cost for these systems averaged just £1,231. This is significantly lower than other common heating technologies:

• • LPG condensing boilers: £1,620 (31% more expensive)
  • Electric storage heaters: £2,866 (more than double the cost)

Even compared to gas condensing boilers, which averaged £1,283, liquid fuel heating remains the cheaper option. Furthermore, it also surpasses renewable technologies like wood pellets and heat pumps in affordability, cementing its position as a leading heating choice for UK households.

The trend extends beyond Great Britain, with Northern Ireland and the Republic of Ireland reporting similar results. The average yearly cost of liquid fuel heating in Northern Ireland was £1,161, while homes in the Republic of Ireland saw costs average at €1,640, maintaining its status as the cheapest form of domestic heating across these regions.

A Respite for Households Amid Economic Challenges

Malcolm Farrow, head of public affairs at OFTEC, welcomed these findings, especially for the 1.7 million UK homes that depend on liquid fuel for heating. He emphasised that, despite the volatility in energy prices due to global events like the COVID-19 pandemic and the war in Ukraine, the four-year data dispels the misconception that liquid fuel is an expensive option. In fact, the stability and affordability of liquid fuel over this period have provided much-needed relief to households, particularly during a time of rising living costs.

Farrow also noted that liquid fuel prices are expected to remain competitive in the coming months, adding reassurance to those who rely on this energy source for domestic heating

Challenges and the Path Toward Decarbonisation

These findings come at a crucial time, as the UK’s new Labour government is shaping its policies to decarbonise the domestic heating sector as part of the nation’s commitment to net-zero carbon emissions. The government is expected to reconsider a proposed ban on the installation of new fossil fuel boilers by 2035, a policy that drew concern from rural MPs and residents. Many homes in rural areas, especially those off-grid, are older and less energy-efficient, making the transition to technologies like heat pumps both costly and challenging.

Transitioning these homes to heat pumps often requires expensive renovations to improve insulation and energy efficiency, without which households may face much higher running costs. To mitigate these challenges, OFTEC and industry partners are calling on the government to support renewable liquid fuels as a viable alternative.

The Case for Renewable Liquid Fuels

To offer a more sustainable path for homes currently relying on liquid fuel, OFTEC is advocating for the development of renewable liquid fuels. One promising alternative is Hydrotreated Vegetable Oil (HVO), which has been successfully tested in nearly 150 properties over the last two years. These trials have shown that HVO can reduce carbon emissions by up to 88% with only minor modifications to existing boilers, providing a low-cost and low-disruption option for homeowners.

The trade association is pushing for government support to equalize the tax duty between HVO and kerosene (used in domestic heating) and establish a supplier fuel obligation. Such measures would incentivize the rollout of HVO and allow homes to transition to a lower-carbon heating option with minimal financial burden. A phased approach involving blends of renewable and traditional fuels could also speed up the process.

Conclusion: Liquid Fuel is Affordable Today, But Must Evolve for Tomorrow

While liquid fuel heating has proven to be the most economical heating technology over the past four years, the long-term goal remains clear: reducing carbon emissions. As the UK moves toward its net-zero commitments, the challenge is to find cost-effective, low-carbon alternatives that don’t impose an undue burden on households.

Renewable liquid fuels like HVO offer a promising path forward, allowing homes that currently use liquid fuel to transition smoothly and affordably to a greener future. As Malcolm Farrow pointed out, while households have enjoyed lower heating costs in recent years, the focus must now shift to ensuring these properties can contribute to a sustainable, low-carbon future. With the right support and policies in place, renewable liquid fuels could provide that much-needed balance between cost and environmental responsibility.