Is UK climate policy going in circles?
Rumours of a planned cut to the Boiler Upgrade Scheme to fund the Defence Investment Plan are redolent of a memorable scene in the Lord of the Rings film The Two Towers. Sam and Frodo are wearily grinding towards their destination when Sam exclaims “this looks strangely familiar”, to which Frodo responds: “that’s because we’ve been here before, we’re going in circles”.
Nerdy metaphor aside, the rumoured cuts to the Boiler Upgrade Scheme (BUS) for England and Wales risk repeating a process that cuts a burgeoning industry down at the knees just as it is getting underway. The scheme in question provides grants of up to £9,000 to replace fossil fuel powered boilers with lower-carbon alternatives. The scheme is critical to efforts to reduce emissions in home heating, while some models can cool homes during the intensely hot summers we will continue to experience.
The Climate Change Committee (CCC) in its most recent Progress Report to Parliament points out that the UK has one of the lowest market shares of heat pump installations in Europe. Sales figures from 2025 from the European Heat Pump Association show that the UK sold the seventh most units at 125,000, with France (528,000), Italy (432,000) and Germany (345,000) the top three nations by sales. Less than 2% of homes are heated via heat pump in the UK – one of the lowest rates in Europe.
The BUS is designed to stimulate a domestic heat pump industry by providing a stable demand signal to ensure that the supply chain and labour market can develop to retrofit properties and install new units. The CCC explicitly calls for the removal of any unnecessary barriers that make a heat pump harder to install than a gas boiler, making low-carbon heating the default choice. Sadly, the rumours emanating from Whitehall are part of a long list of ‘green schemes’ raided before being able to effect any change.
David Cameron’s infamous instruction to “get rid of the green crap” back in 2013 when he was Prime Minister saw a slew of schemes cut that funded deployment of renewable energy assets and home energy retrofits. The Renewables Obligation was closed to onshore wind generation a year earlier than planned in 2015, while planning restrictions significantly limited where onshore wind turbines could be placed. A review of Feed-in-Tariff rates in 2015 saw the subsidy for small-scale domestic solar systems reduced by 64% (down to 4.39p/kWh). The Zero Carbon Homes scheme proposed by the Labour Government in 2006 was scuppered before implementation by the Coalition Government in 2015. The plan for that ill-fated scheme was to ensure no net release of CO₂ emissions during day-to-day running via reduced energy consumption, low-carbon heat and power generation and offsetting of unavoidable emissions. Funding for a carbon capture and storage (CCS) competition and £1bn in ring-fenced capital funding was also cut in 2015.
CarbonBrief, in analysis from 2024, estimates the net impact to the UK economy of the schemes cut by the Cameron/Coalition Governments at £24bn. The short term ‘wins’ afforded by dismantling green policy ultimately left UK households exposed to gas price spikes. If the schemes had gone ahead the share of renewable electricity generation would have been higher, alongside more home insulation and heat pump deployment to reduce demand for gas.
Even now, with the impacts of climate change becoming ever harder to ignore, the ability to stay the course and absorb some short-term pain to protect UK households from high bills and scorching heat has remained difficult for subsequent administrations. We have seen the failed Contract for Difference auction in 2023 (borne out of price-cap set too low), the closure of the Energy Company Obligation scheme under which large energy companies had to retrofit insulation and home heating, near constant rumblings that the Zero Emissions Vehicle mandate will be weakened and of course further rumours that £21.7bn in capital funding for carbon capture and storage will be raided for defence spending.
What makes the cutting of funding so disheartening is that these schemes would have worked to insulate the UK against the energy price spikes that have occurred in recent years. The Government needs to carefully consider the implications for households and the UK’s ability to meet future carbon budgets if it continually pulls the plug on schemes designed to make up for clear weaknesses in carbon budget delivery. The BUS needs to be seen in the context of a litany of occasions where the Secretary of State has not held their nerve, with UK households worse off as a result.
Thankfully Sam and Frodo had the long-term vision and drive to complete their mission, and the ring was thrown into the depths of Mount Doom. Whether the UK Government can stay the course and complete its own self-defined mission is another question entirely.
A version of this commentary was first published by Business Green on 26 October 2026.