Call to axe fuel duty on HVO

John and Robert Weedon

A leading south west oil supplier has called on the Government to slash its current tax rates on renewable liquid heating fuels.

Mitchell & Webber, an oil supplier currently distributing across Cornwall, Devon, Somerset and Dorset, is leading the charge on behalf of its customers ahead of the Spring Budget arriving on March 6.

Mitchell & Webber is a long-standing advocate and provider of Hydrotreated Vegetable Oil (HVO), an alternative renewable fuel source made from waste material similar to cooking oil that reduces 90% of CO2 emissions in comparison to kerosene heating oil.

Directors of the Scorrier-based business, John and Robert Weedon, are lobbying to make fuels such as HVO more accessible and affordable nationwide – providing support to around four million people across the country who currently rely on off-grid heating.

HVO is currently taxed at a higher rate than fossil fuels, creating a financial barrier for households looking to switch to greener alternatives.

The south west is particularly reliant on alternative fuel sources to heat homes, owing to the higher proportion of rural homes compared to other areas of the country.

John Weedon commented: “Our main goal is for the Department for Energy Security and Net Zero (DESNZ) to commence the consultation that was agreed in the Energy Act 2023 bill last September. This will enable the renewable fuel to be implemented on a larger scale – not only in the off-grid rural areas in the south west, but throughout the country.

“The second important action is for the Chancellor to axe the fuel duty on HVO for heating, as it is illogical for a renewable fuel to have a duty whilst a fossil-based heating oil has none. It would be a cost-neutral measure to correct this duty disparity and also help the rural homeowners to decarbonise in a cost-effective way.”

He added: “Over the last three years, 50 homes, a small primary school and a Methodist church were successfully converted to HVO in a trial funded by Mitchell & Webber. HVO is a strong alternative to installing heat pump systems in these rural areas. The trial demonstrated that the fuel reduces 90% of CO2 emissions compared with kerosene and works in all types of houses and all types of boilers. It’s non toxic, biodegradable and is the most cost effective and least disruptive solution for customers.

“Kehelland is living proof that these sustainable fuel sources are viable options for rural communities like the ones found all over the south west, and that those looking to adopt them should be encouraged to do so, not have hurdles put in their way.

“We were the first company in the UK to start these trials for heating and we’ve had many messages of support from residents, especially from Kehelland village, expressing their desire for the Government to act so the benefits of the trial can remain in place.”

Other members of the UK and Ireland Fuel Distributors Association (UKIFDA), have also recently come out in support of cutting the tax on these types of fuel, as the industry puts pressure on the Government to act.

Robert Weedon added “It’s great that the industry is coming together to build momentum around these revolutionary fuels. As providers to residents of the south west we are proud to be flying the flag for their futures.

“It’s increasingly clear the only solution to achieving the UK’s net zero ambitions is a pragmatic one. The diversity of off-grid housing stock lends itself to a multi-technology solution; it’s not a case of one size fits all.”