Clean Heat Market Mechanism (CHMM) 2026: Updated

The Clean Heat Market Mechanism, commonly known as the CHMM, is a UK government scheme designed to support growth in the heat pump market.

Rather than requiring individual homeowners to change their heating systems, it places obligations on manufacturers that supply fossil-fuel boilers to the UK market.

The scheme began on 1 April 2025 and is currently in its second year.

For homeowners, the important point is that the CHMM isn't a gas boiler ban and doesn't mean you have to replace an existing boiler with a heat pump.

What is the Clean Heat Market Mechanism?

The Clean Heat Market Mechanism is a government scheme that encourages the heating industry to support the installation of more low-carbon heating systems.

It applies to manufacturers supplying gas and oil boilers to the UK market.

Manufacturers covered by the scheme receive a low-carbon heat target based on their qualifying fossil-fuel boiler sales. They need sufficient CHMM credits to meet that target.

Credits are generated through qualifying low-carbon heating installations, primarily heat pumps.

Manufacturers can generate credits through eligible installations associated with their own products or obtain credits from other credit holders.

The intention is to encourage investment and growth in the heat pump market while the UK gradually reduces its reliance on fossil fuels for heating.

When did the CHMM start?

The Clean Heat Market Mechanism came into force on 1 April 2025.

This is an important correction to earlier information suggesting the scheme began in April 2026.

The first scheme year ran from:

1 April 2025 to 31 March 2026.

The second scheme year began on:

1 April 2026 and runs until 31 March 2027.

Government guidance currently states that the CHMM runs until at least 2029.

What is the CHMM target for 2026/27?

The target for Scheme Year 2, covering 1 April 2026 to 31 March 2027, is 8%.

However, this shouldn't be interpreted as a requirement for manufacturers to sell one heat pump for every 12 or 13 boilers they sell.

The calculation is more specific.

For Scheme Year 2, the 8% target applies to qualifying gas boiler sales above 19,999 units and qualifying oil boiler sales above 999 units.

The Environment Agency calculates each participating manufacturer's low-carbon heat target after reviewing its reported fossil-fuel boiler sales.

This replaced the 6% target used during the first scheme year.

What were the CHMM targets for 2025/26?

Scheme Year 1 used a target of 6% of qualifying fossil-fuel boiler sales above the relevant thresholds.

Targets for later scheme years are not automatically set at 10%.

Future percentages are set by the Secretary of State, so homeowners shouldn't assume that an earlier proposed or discussed figure will become the final target.

What happens if a manufacturer misses its target?

Manufacturers need enough eligible CHMM credits to satisfy their low-carbon heat target.

There are also provisions allowing participants to carry forward part of an unmet target into the following scheme year, subject to the scheme rules.

If a participant ultimately doesn't have enough credits to meet its target, it must make a payment for the remaining shortfall.

The current payment is £500 for each unit of unmet target.

This is substantially different from the £3,000 figure previously associated with proposals for the mechanism.

Is the CHMM a boiler tax?

The CHMM isn't a tax charged directly to homeowners buying a boiler.

The legal obligations sit with participating manufacturers rather than individual households.

This distinction is important because the scheme has sometimes been described as a “boiler tax”.

Before the CHMM began, concerns were raised about manufacturers increasing boiler prices in anticipation of the proposed scheme. However, that shouldn't be confused with the government directly applying a specific CHMM tax to an individual boiler installation.

The scheme itself sets targets and compliance requirements for manufacturers.

Does the CHMM ban gas boilers?

No.

The Clean Heat Market Mechanism doesn't ban homeowners from buying a gas boiler.

Its purpose is to increase the deployment of low-carbon heating alongside the existing boiler market.

If your home currently has a gas boiler, the CHMM doesn't require you to remove it or replace it with a heat pump.

Likewise, a homeowner who needs a replacement boiler isn't automatically required by the CHMM to choose a heat pump instead.

Other building regulations and heating policies can affect what can be installed in particular circumstances, so these should be considered separately from the CHMM.

Does the CHMM apply to oil boilers?

Yes. Qualifying oil boiler sales are included in the mechanism as well as qualifying gas boiler sales.

The thresholds are different.

For Scheme Year 2, the 8% calculation applies to qualifying oil boiler sales above 999 units and qualifying gas boiler sales above 19,999 units.

This reflects the fact that the UK oil boiler market is considerably smaller than the gas boiler market.

For an individual homeowner with an oil boiler, however, the principle remains the same: the CHMM obligation is placed on manufacturers rather than requiring you personally to replace your heating system.

Do homeowners have to install a heat pump?

No.

The CHMM doesn't impose an individual heat pump installation target on homeowners.

You aren't required by this scheme to replace a functioning boiler simply because the manufacturer that produced it has a heat pump target.

Instead, the mechanism is designed to encourage manufacturers and the wider heating industry to increase the number of qualifying low-carbon heating installations.

Whether a heat pump is suitable for your home is a separate decision that should consider the property, heating requirements, installation work and costs.

How does the CHMM support heat pumps?

The mechanism creates a commercial incentive for manufacturers to support qualifying heat pump installations.

A manufacturer that has substantial qualifying fossil-fuel boiler sales will also have a low-carbon heat target to meet.

This encourages businesses that have traditionally relied heavily on gas and oil boiler sales to participate more actively in the low-carbon heating market.

The CHMM works alongside other government policies intended to encourage heat pump adoption rather than operating as a standalone homeowner grant.

One of the most important of these is the Boiler Upgrade Scheme, which can provide financial support towards eligible low-carbon heating installations.

How do CHMM credits work?

The Clean Heat Market Mechanism operates through a system of credits.

Qualifying low-carbon heating installations can generate CHMM credits. Obligated boiler manufacturers then need enough credits to meet the low-carbon heat target calculated from their qualifying fossil-fuel boiler sales.

Manufacturers don't necessarily have to generate every credit themselves. The scheme allows credits to be transferred between registered participants, subject to its rules.

This creates flexibility while still giving manufacturers a commercial reason to support growth in low-carbon heating.

For homeowners, the important point is that CHMM credits are an industry compliance mechanism. You don't need to buy, manage or apply for these credits yourself.

What heat pumps qualify for CHMM credits?

The CHMM is primarily designed to encourage installations of air source and ground source heat pumps.

An installation must meet the scheme's eligibility requirements before a credit can be awarded. Simply selling a heat pump isn't necessarily enough.

The mechanism is therefore focused on qualifying installations rather than manufacturers merely producing or stocking more heat pumps.

Eligibility rules can change as the scheme develops, so installers and manufacturers need to follow the requirements applying to the relevant scheme year.

For homeowners, this is separate from deciding whether a particular heat pump is suitable for the property.

How does the Boiler Upgrade Scheme fit in?

The Boiler Upgrade Scheme is separate from the Clean Heat Market Mechanism.

While the CHMM places obligations on manufacturers, the Boiler Upgrade Scheme provides grants towards eligible low-carbon heating installations in England and Wales.

Eligible households can currently receive a grant of up to £7,500 towards an air source or ground source heat pump.

The two policies therefore approach heat pump adoption from different directions.

The CHMM is intended to encourage manufacturers to support growth in the low-carbon heating market, while the Boiler Upgrade Scheme helps reduce the upfront cost for eligible property owners.

Receiving support through the Boiler Upgrade Scheme doesn't mean a homeowner personally has a CHMM target to meet.

Will the CHMM make heat pumps cheaper?

One aim of the mechanism is to encourage greater competition, investment and scale within the heat pump market.

Increasing the number of installations could help manufacturers develop their products and supply chains as the market grows.

However, homeowners shouldn't assume that the CHMM guarantees a particular reduction in heat pump prices.

The total cost of installing a heat pump depends on the property and the work required. This can include the heat pump itself, hot water storage, controls and changes to the existing heating system.

Available government support can also have a significant effect on the amount an eligible homeowner ultimately pays.

Will the CHMM make gas boilers more expensive?

The CHMM doesn't set the retail price of gas boilers.

Manufacturers and retailers determine their own prices, and numerous factors can affect how much a boiler or complete installation costs.

The scheme does create compliance obligations for manufacturers with qualifying fossil-fuel boiler sales, but this isn't the same as the government adding a fixed charge to every gas boiler purchased by a homeowner.

Consumers should therefore compare actual current installation prices rather than assuming every boiler carries a specific CHMM surcharge.

Can I still replace my gas boiler in 2026?

Yes. The CHMM itself doesn't prevent homeowners from replacing an existing gas boiler in 2026.

Gas boilers remain part of the existing UK heating market, and the mechanism doesn't require households to remove functioning boilers.

However, the wider rules surrounding heating are changing.

Requirements for new-build properties, for example, are separate from the CHMM and shouldn't be confused with the rules affecting replacement heating systems in existing homes.

If you're replacing an existing boiler, the appropriate heating system will depend on your property, budget and heating requirements.

Should I choose a gas boiler or heat pump?

The CHMM doesn't determine which heating system is right for an individual home in terms of a gas boiler or heat pump.

A modern gas boiler may remain an option for many existing properties, while a heat pump may offer a suitable low-carbon alternative for others.

Heat pump suitability depends on factors including the property's heat loss, existing radiators or underfloor heating, available space and hot-water requirements.

Installation cost and available financial support should also be considered.

Rather than choosing solely because of future policy, homeowners should consider how well each heating system meets the needs of their property.

Do I need to replace my existing boiler because of the CHMM?

No.

The Clean Heat Market Mechanism doesn't require homeowners to replace an existing gas or oil boiler.

If your current boiler is working safely and reliably, the CHMM itself doesn't create a deadline by which it must be removed.

Regular maintenance and annual servicing remain important for keeping a gas boiler operating safely.

When replacement eventually becomes necessary, you can assess the heating options and regulations that apply at that time.

This is more useful than replacing a functioning heating system solely because of misconceptions surrounding the CHMM.

What happens to the CHMM after 2026/27?

The Clean Heat Market Mechanism is designed as a multi-year scheme and currently runs until at least 2029.

The government can set targets for subsequent scheme years as the market develops.

This means homeowners should be cautious about articles that present future percentages as though they've already been confirmed.

The target increased from 6% in Scheme Year 1 to 8% in Scheme Year 2, but this doesn't mean it will automatically increase by the same amount each year.

Future targets and other changes should be checked against the latest government guidance when they're announced.

Is there still a gas boiler ban planned?

The Clean Heat Market Mechanism shouldn't be treated as a gas boiler ban.

It is a market mechanism intended to encourage the deployment of low-carbon heating.

Rules affecting heating in new homes and longer-term government plans for decarbonising existing buildings are separate policy areas.

This distinction matters because several different heating policies are often grouped together when discussing the future of gas boilers.

For homeowners, the CHMM doesn't establish a date on which every existing gas boiler must be removed, nor does it prevent gas boiler replacements simply because the mechanism is operating.

What should homeowners do in 2026?

For most homeowners, there is no immediate action required specifically because of the Clean Heat Market Mechanism.

If your existing boiler is working properly, continue to maintain it and arrange appropriate servicing.

If you're considering a replacement heating system, compare the options available for your property rather than making a decision based on headlines about a supposed boiler ban or tax.

Homeowners interested in a heat pump should also check their eligibility for current government support and have the property assessed to determine whether the technology is suitable.

Heating policy will continue to develop, so use current government guidance when making major investment decisions.

What the Clean Heat Market Mechanism means for homeowners

The CHMM is primarily an industry policy rather than a requirement placed on individual households.

In 2026/27, obligated manufacturers have an 8% low-carbon heat target calculated according to the scheme rules and their qualifying fossil-fuel boiler sales.

For homeowners, however, the fundamentals are simpler.

The CHMM doesn't require you to install a heat pump, doesn't directly tax you for buying a boiler and doesn't require you to remove an existing gas or oil boiler.

Its purpose is to encourage growth in low-carbon heating while giving the heating industry a stronger incentive to support qualifying heat pump installations.

Understanding that distinction makes it easier to separate the CHMM from wider changes to UK heating policy and make decisions based on what your home actually needs.