Clean Heat Market Mechanism: who it applies to, annual tasks
Source: gov.uk (2025-03-06)

Check if you're affected by the Clean Heat Market Mechanism (CHMM). See what actions you must take each scheme year.

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 (https://www.legislation.gov.uk/uksi/2025/81/made) (the CHMM Regulations) give the obligations of the scheme.

The Energy Act 2023, Part 4, Chapter 1 (https://www.legislation.gov.uk/ukpga/2023/52/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:
- manufacture or have someone to manufacture fossil fuel boilers or heat pumps for you
- own the right to use the brand name, trademark or other distinctive mark used to market fossil fuel boilers or heat pumps in the UK
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:
- 20,000 or more gas boilers (capable of burning natural gas or liquified petroleum gas)
- 1,000 or more oil boilers
You’re not a scheme participant if you’re a small company or group as defined in the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/contents).

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 participant’s 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:
- between 15,000 and 19,999 gas boilers (capable of burning natural gas or liquified petroleum gas)
- between 750 and 999 oil boilers
You’re not a near-threshold supplier if you’re a small company or group as defined in the Companies Act 2006 (https://www.legislation.gov.uk/ukpga/2006/46/contents).

If a company’s (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 supplier’s 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:
- is incapable of burning fossil fuels or peat to generate heat, or does so only as part of a hybrid heating system
- has a capacity less than 45 kilowatt (kW) thermal
- supplies space heating, whether or not it also supplies hot water or is part of a hybrid heating system
- supplies space heating through a water-based (hydronic) heating system
- is accredited by an approved scheme which certifies the installation
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) (https://www.gov.uk/guidance/clean-heat-market-mechanism-report-online-get-credits) 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:
- gas and oil boilers over 70 kilowatt (kW) thermal capacity
- fossil fuel boilers if it can be proven they have or will be exported outside the UK
- fossil fuel boilers if it can be proven that they are or will be installed in ‘new build’ properties (properties not used or occupied before installation)
The CHMM Regulations (https://www.legislation.gov.uk/uksi/2025/81/made) 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.

Annual tasks

You must send information by specific deadlines if you’re 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
- credit holders
Scheme participants should request to:
- carry forward targets
- carry over credits
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 (https://www.gov.uk/guidance/clean-heat-market-mechanism-fossil-fuel-boiler-sales-targets-and-credits).

Register and report your data using the Manage the Clean Heat Market Mechanism service (https://www.gov.uk/guidance/clean-heat-market-mechanism-report-online-get-credits).

How you’ll be regulated

Check how compliance, enforcement, and appeals work (https://www.gov.uk/guidance/clean-heat-market-mechanism-compliance-enforcement-and-appeals).

For help

Contact xxx@xxx.xx (mailto:xxx@xxx.xx) if you’re unsure if the CHMM applies to you.