As energy costs remain a material risk for UK industry, the government’s proposed British Industrial Competitiveness Scheme aims to lower electricity costs for qualifying manufacturers from April 2027, subject to legislation. The consultation proposes exemptions from the indirect costs of the Renewables Obligation, Feed-in Tariffs, and the Capacity Market, with an indicative benefit of about £35 to £40 per MWh for eligible activity.
The government estimates suggest that around 7,000 UK manufacturing businesses may benefit, with potential reductions in electricity bills of up to 25% once the scheme is fully implemented.
Important: BICS is still at consultation stage. Final rules, timelines, and thresholds may change before launch.
Check Your Eligibility Now
What the Scheme Is Designed to Do
The scheme would offer qualifying manufacturers exemptions from the indirect costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market. These costs are currently included in electricity bills and make up a meaningful share of energy expenditure for heavy users.
This forms part of the wider Industrial Strategy and sits alongside existing support for the most electricity intensive industries. It is intended to help safeguard jobs, improve competitiveness and support long term investment. The proposed start date is April 2027, subject to legislation, with the scheme running to 2035 and a review planned for 2030.
How costs may be recovered:
The government has not yet confirmed how exempted policy costs will be redistributed across the wider electricity system. This is part of the consultation, and final cost recovery arrangements will be outlined in future guidance.
Speak to Our Energy Team
Who BICS Is For
BICS is designed for manufacturing businesses with high electricity use, particularly those operating in sectors identified by the UK Industrial Strategy as strategically important to national growth. If your organisation is energy intensive, produces critical components for the UK supply chain, or operates within advanced manufacturing, this scheme may become highly relevant to your cost base.
To qualify, a business must meet three core criteria.
1. You operate in an eligible manufacturing sector
The scheme targets two groups:
- Frontier manufacturing industries within the government’s priority growth sectors, such as advanced manufacturing, clean energy technologies, digital and technologies, defence, and life sciences.
- Foundational manufacturing industries that supply essential inputs to those frontier sectors, for example metals, chemicals, glass, ceramics, and other material‑based industries.
These sectors are defined using Standard Industrial Classification (SIC) codes at the four‑digit level. This helps government ensure support is directed to businesses that genuinely sit within these strategic parts of the economy.
2. You manufacture eligible products
Because SIC codes alone can capture a wide range of activities, businesses must also demonstrate that they produce goods that fall within a recognised Harmonised System (HS) product code linked to a frontier or foundational industry.
In simple terms, this step confirms that your actual outputs, not just your registered sector, align with the scheme’s manufacturing focus.
3. Your business meets the electricity‑intensity threshold
BICS is specifically intended to support businesses that face electricity as a major cost driver. To qualify, applicants will need to meet an electricity‑intensity test, which government is currently consulting on.
The proposed methods include assessing electricity expenditure as a proportion of total expenditure, or as a proportion of gross value added. The final method and threshold will be confirmed in due course.
Talk to an Energy ExpertWhat This Means for Energy Intensive Users
If your organisation produces critical components or materials and has high electricity use, the scheme may be relevant to you once final guidance is published. While it is not specifically a carbon capture scheme, manufacturers investing in electrified processes, low carbon technologies or modernisation may see indirect benefits if they meet the sector and electricity tests.
It is also worth noting that businesses already receiving support through the existing Energy Intensive Industries exemption scheme would not be able to receive the same exemption twice. The government may recommend that businesses qualifying for the British Industry Supercharger consider applying to that scheme instead, as the support level is higher.
Why this matters for manufacturers now
The scheme is expected to become a major focus across UK manufacturing over the next 18 to 24 months. Businesses that operate in eligible sectors, or supply into them, will be preparing evidence on electricity intensity, consumption data and production activity in advance of applications opening.
Strengthen Your Position Before Applications OpenWhat You Should Do Now
Although details are not final, energy intensive businesses can take several practical steps to ensure they are ready when the scheme opens.
Map your eligibility
Start by reviewing your SIC code and the product codes linked to your main outputs. If your business operates across several activities, create a clear breakdown of the products you manufacture and how they relate to the frontier or foundational sectors.
Review your electricity intensity
Prepare both potential intensity calculations. Whether government chooses to assess electricity as a share of expenditure or as a share of gross value added, having these figures ready will make the application process easier.
Understand your product mix
Many manufacturers produce both eligible and non eligible goods. Government is consulting on whether exemptions might be pro-rated to reflect the share of eligible activity. Begin documenting your production mix so you can provide clear evidence if required.
Engage with your energy partners
Once government confirms the final design, suppliers will clarify how exemptions will appear on bills. As an energy broker, we can help you understand how this may interact with existing contracts, pass through arrangements and site level metering.
Plan for future guidance
A review in 2030 may consider linking eligibility to investments in energy efficiency or flexibility technologies. Although this is not confirmed, it is sensible to keep a record of any upgrades, monitoring tools or metering improvements you implement over time.
How We Can Support You
We help manufacturers interpret policy changes, assess potential eligibility and understand how upcoming schemes may influence their long term energy strategy.
Our support includes pre eligibility preparation such as SIC code verification, product mapping, consumption data collection, site assessments, metering reviews and audit services, as well as guidance on contract structures and portfolio planning. This ensures you are fully prepared to demonstrate electricity intensity and other requirements once the application window opens.
Conclusion
The British Industrial Competitiveness Scheme has the potential to ease the burden of electricity policy costs for UK manufacturers as well as improve long term competitiveness.
By understanding the proposed criteria early, reviewing your manufacturing activity and electricity use, and preparing the evidence you may need, you will place your organisation in the strongest position when applications open.
See how much energy you could save
Response was very quick. quotes were very competitive and the advice from Liam was exactly what was needed. a great service!
Very quick & easy contact, sourced new rates quickly & transfer process was simple .
Utility Bidder takes all the hassle out of sorting through the mine field of service providers and provides a professional and time efficient way of securing a competitive price for my energy needs.
Having previously spoken with a rival broker whose consultants I felt were pressuring me into signing a contract immediately, Kirsty Schofield was a breath of air. She found a cheaper and shorter contract to suit my needs and was very friendly and efficient. She made renewing my energy contract a pleasant experience instead of a dreaded chore.”
First class service from Sarah at Utility Bidder, I have been with them for a couple of years now and wouldn’t go elsewhere and would certainly recommend.
Don’t take our word! Listen to our customers
Award-winning energy comparison
We’re dedicated to helping businesses like yours save more on energy. It only takes a couple of minutes to compare quotes.