The CHMM supports the development of low-carbon electric heat pumps. It places an obligation on manufacturers supplying gas and oil boilers in the UK market. Manufacturers must meet targets for the installation of heat pumps in existing properties in proportion to their sales of fossil fuel boilers. Manufacturers can do this by supplying heat pumps themselves or by getting credits from other manufacturers. The scheme runs from 1 April 2025 until at least 2029 and applies to the whole of the UK. The Environment Agency is the scheme administrator. The Clean Heat Market Mechanism Regulations 2025 the CHMM Regulations give the obligations of the scheme. The Energy Act 2023, Part 4, Chapter 1 is the primary legislation underpinning the scheme. Who the scheme applies to
The CHMM applies to your business if you both
If the CHMM applies to you and you do not follow the regulations, you may face enforcement action. This could be a civil penalty or criminal prosecution. The CHMM has 3 categories of undertakings. How these apply to you will depend on the activities your business carries out and the extent of these activities.
It will also depend on the size of your organisation. Scheme participants
A scheme participant is a company or a group of companies that, in a relevant sales year, supplies on or for the UK market either
Youre not a scheme participant if youre a small company or group as defined in the Companies Act 2006. Scheme participants must register with the CHMM scheme and have a low-carbon heat target. If a scheme participant is also a supplier of heat pumps, they are a scheme participant and not a credit holder. In these cases, any CHMM credits go to the scheme participants account alongside their obligated target.
There is no need for them to create a separate account. Near-threshold suppliers
A near-threshold supplier is a company or group of companies that, in a relevant sales year, supplies on or for the UK market
Youre not a near-threshold supplier if youre a small company or group as defined in the Companies Act 2006. If a companys or group of companies gas and oil boiler sales are greater than these thresholds, they will become a scheme participant instead. Near-threshold suppliers must register with the CHMM scheme. They also need to fulfil specific reporting requirements. They will not have a low-carbon heat target and associated obligation. A near-threshold supplier who also supplies heat pumps is both a near-threshold supplier and a credit holder. In these cases, any CHMM credits go to the near-threshold suppliers account. There is no need for them to create a separate account. Credit holders
A credit holder is a supplier of a heat pump which
Credit holders do not have a CHMM obligation. This is because they are not a manufacturer of fossil fuel boilers, or they do not manufacture them in enough numbers to pass the minimum threshold. This guidance and the Manage the Clean Heat Market Mechanism M-CHMM service calls non-obligated heat pump manufacturers credit holders instead of certificate holders. But the terms mean the same thing. What the scheme does not apply to
The CHMM scheme does not apply to
The CHMM Regulations give the detailed criteria that define a fossil fuel boiler sale, appliances and exclusions. CHMM timeline
The CHMM scheme year runs for 12 months, from 1 April to 31 March. There is also a credit transfer period. Your fossil fuel boiler sales from April 2024 to March 2025 defines your initial obligation to register. There are 4 scheme years, 2025 to 2028. Scheme year Fossil fuel boiler sales period Credit transfer period
2025 1 April 2025 to 31 March 2026 1 October 2025 to 30 September 2026
2026 1 April 2026 to 31 March 2027 1 October 2026 to 30 September 2027
2027 1 April 2027 to 31 March 2028 1 October 2027 to 30 September 2028
2028 1 April 2028 to 31 March 2029 1 October 2028 to 30 September 2029
Annual tasks
You must send information by specific deadlines if youre a scheme participant or near-threshold supplier. If you do not give the information by these deadlines, you may face enforcement action.
This could lead to a civil penalty or criminal prosecution. Quarters are numbered in the CHMM scheme year, so quarter 1 relates to April to June, and so on. The dates for each scheme year are as follows. 1 April
Start of scheme year. Scheme participants and near-threshold suppliers must start monitoring boiler sales. 28 July
Scheme participants and near-threshold suppliers must send quarter 1 fossil fuel boiler sales data. 1 October
The credit transfer window opens for scheme participants and credit holders. 28 October
Scheme participants and near-threshold suppliers must send quarter 2 fossil fuel boiler sales data. 28 January
Scheme participants and near-threshold suppliers must send quarter 3 fossil fuel boiler sales data. Scheme participants should also appoint an accredited verifier if they have not already done so. 31 March
End of scheme year for scheme participants and near-threshold suppliers. Scheme participants should plan to complete the annual sales data report and third party verification by 30 June. 28 April
Scheme participants and near-threshold suppliers must send quarter 4 fossil fuel boiler sales data. 30 June
Scheme participants must send their annual sales data and third party verification report. 30 September
Credit transfer window closes for
Scheme participants should request to
30 November
Scheme participants must pay for any credit shortfall. Final scheme year
The 2028 scheme year will end in 2029. It will end on the same dates given here, but it will not be possible to carry forward targets or credits. How to report your data
Check how fossil fuel boiler sales, targets and credits work. Register and report your data using the Manage the Clean Heat Market Mechanism service. How youll be regulated
Check how compliance, enforcement, and appeals work. For help
Contact chmmenvironment-agency.gov.uk if youre unsure if the CHMM applies to you.