Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential impact of the decision to reduce non-compliance fines in the Clean Heat Market Mechanism on the UK's ability to meet carbon budgets.

The Government believes that the reduction to the payment-in-lieu for the Clean Heat Market Mechanism for the first baselining year will provide manufacturers with additional capacity to adapt to the scheme’s introduction, while still providing an incentive to invest in the transition. An impact assessment was published on 21 November 2024 alongside the draft statutory instrument. The adjustment to the payment-in-lieu for the introductory year has not changed the Department's assessment of expected carbon savings from heat pump installations over the scheme’s lifetime. The Government will keep the payment-in-lieu level, like all scheme parameters, under review for future years.