- More than 10,000 manufacturers can now apply for electricity cost reductions of up to £40/MWh.
- Applicants must demonstrate eligibility at company, product and individual site level by 30 November.
- The scheme helps electricity-intensive businesses, but manufacturers dependent on gas say it does not address their principal disadvantage.
Applications have opened for the British Industrial Competitiveness Scheme, giving eligible manufacturers two months to secure electricity bill reductions worth as much as 25%.
The scheme will exempt qualifying sites in England, Scotland and Wales from the indirect costs of the Renewables Obligation and Feed-in Tariffs from April 2027. An exemption from Capacity Market costs will follow in October 2027.
The government estimates that the combined relief will be worth between £35/MWh and £40/MWh. BICS has an annual budget of approximately £600 million and is expected to operate until 2035, subject to a review in 2030.
Business secretary Jonathan Reynolds said the support would allow manufacturers to “spend less on energy and more on growing their business”.
Companies applying in the initial window will also be eligible for a lump-sum payment intended to approximate the support they would have received had BICS operated from April 2026. Businesses that miss this year’s window will not be able to claim that additional payment.
Eligibility criteria
Applications close at 11.59pm on 30 November. Businesses must be registered at Companies House, operate under an eligible Standard Industrial Classification code and manufacture products covered by specified Harmonised System codes.
Relief will be calculated for each manufacturing site according to the proportion of grid electricity associated with eligible production. Sites where eligible activity accounts for less than 25% of consumption will receive no exemption. Those between 25% and 50% will receive a 50% exemption, while sites at or above 50% can receive the full exemption.
Applicants must supply meter information, product evidence and electricity bills covering the most recent six consecutive months available within the previous year. Applications cannot be amended after submission, increasing the risk that incomplete evidence could exclude otherwise qualifying companies.
Successful exemptions will remain valid for five years, subject to annual declarations and a review after the second year. Businesses already receiving support through the more generous British Industry Supercharger can apply, but cannot claim twice for the same electricity consumption.
The scheme responds to a persistent competitiveness problem. Government analysis found that UK industrial electricity prices in 2024 were more than twice the median paid by large users across the EU14 and Britain. It estimated that the approximately 50% increase in electricity prices between 2008 and 2020 reduced manufacturing investment by between 13% and 26%.
BICS nevertheless treats electricity policy costs rather than wholesale prices, network constraints or gas exposure. That distinction matters for industries using fossil fuels for process heat or as feedstock.
INEOS welcomed the new support but said ministers had misunderstood the chemicals sector, which “relies far more heavily on gas than electricity”. The company said recent UK gas prices had been between eight and 12 times US levels.
BICS should improve the economics of investment in automotive, aerospace, metals, pharmaceuticals and other priority supply chains. However, its success will depend on whether companies can navigate the eligibility process and whether wider reforms tackle the structural energy cost gap. For businesses outside the designated codes, the scheme may make that competitive divide more visible rather than resolving it.
