Preparing for the British Industrial Competitiveness Scheme (BICS)
Rising electricity costs continue to place pressure on UK manufacturers. In response, the Government is launching the British Industrial Competitiveness Scheme (BICS), a new policy aimed at lowering electricity costs for energy-intensive businesses and strengthening the competitiveness of UK industry.
What is the British Industrial Competitiveness Scheme (BICS)?
Set to launch in 2027, the British Industrial Competitiveness Scheme (BICS) is a UK Government energy support initiative that reduces industrial electricity costs by removing or capping non-commodity charges from eligible businesses’ energy bills.
According to the Department for Business and Trade (DBT), eligible businesses could see up to a 25% reduction in electricity bills, with savings of 3.5 to 4 p/kWh through exemption, or partial exemption, of the Renewables Obligation (RO), Feed-in Tariff (FiT), and Capacity Market (CM) charges.
Who is eligible for BICS?
When BICS was first announced, it was expected to support around 7,000–8,000 businesses. Following a government update on 16 April, the scheme was expanded to cover approximately 10,000 businesses across the UK.
Eligibility centres on the Government's Industrial Strategy Eight (IS-8) priority sectors, which include aerospace, automotive, batteries, semiconductors, hydrogen, nuclear technologies, offshore wind, biopharma and MedTech. These form the core of the UK's Modern Industrial Strategy.
Businesses are classified as either frontier industries, which develop advanced products and technologies, or foundational industries, which supply the materials and components that support them - such as chemicals, composites, critical minerals and steel.
Eligibility is determined using both Standard Industrial Classification (SIC) codes, to identify qualifying sectors, and Harmonised System (HS6) codes, to confirm eligible products. Businesses must hold both an eligible SIC and HS6 code to qualify. Refer to the eligibility list to learn more.
The Department for Business and Trade (DBT) have also specified that businesses must pass an electricity intensity test measuring consumption relative to Gross Value Added. This ensures support is directed at manufacturers where electricity costs have a genuine impact on production.
Frontier industries must score above 0.9%, while foundational industries must clear a higher threshold of 2.7%. Where a site manufactures a mix of eligible and non-eligible products, exemptions apply only to qualifying activity.
It is also worth noting that businesses cannot receive exemptions under both BICS and the British Industry Supercharger (BIS) scheme. Where a business qualifies for both, DBT recommends applying for BIS, as it offers higher discounts.
DBT is also considering setting a minimum annual consumption threshold of 3.5 MWh for BICS eligibility. An online self-assessment checker is planned to help businesses determine their position, though further details have yet to be published.
How is BICS relief calculated?
Eligibility and exemption levels under the BICS will be determined using a simple, evidence-based approach. Sites must demonstrate qualifying manufacturing electricity use, with assessment carried out at site level rather than across whole company operations.
If a site qualifies, it will receive either a 50% or 100% exemption from eligible electricity policy levies. The level of support depends on the proportion of electricity consumption directly attributable to BICS-eligible manufacturing activity at that specific site, supported by verifiable evidence.
Where less than 25% of a site’s total electricity use is linked to eligible manufacturing activity, the site will not qualify for any exemption under the scheme. This threshold ensures support is focused on genuinely electricity-intensive industrial processes rather than incidental usage.
It is important to note that from year two onwards, the Government may adjust exemption levels if overall scheme costs are forecast to exceed the budget. For more information, please refer to the UK Government’s consultation.
When does BICS start?
DBT is designing an online application process for the scheme and intend to invite businesses to submit their eligibility information during a two-month window from 1 October to 30 November 2026.
DBT plans to confirm all eligible businesses by 8 January 2027, after which the RO and FiT exemptions will apply from April 2027, with the CM exemption set to commence from October 2027.
A retrospective payment will be made to reflect the relief that eligible businesses would have received if BICS had been in place from April 2026; further details on the mechanics of this payment will be released separately.
Approved exemption certificates will remain valid for two years, though businesses must submit a mandatory yearly declaration to officially reconfirm they still meet the necessary eligibility criteria.
What happens next?
Although BICS doesn't launch until 2027, early preparation is advisable. The starting point is confirming likely eligibility by identifying your SIC code and the HS6 codes that correspond to the products your site manufactures.
It's also worth reviewing your metering arrangements to ensure consumption data can be clearly attributed to the relevant sites and MPANs. DBT have indicated that six months of data is needed to back up an application, so we are already in the data capture period.
On the financial planning side, a projected reduction of £35–£40/MWh in electricity costs is significant enough to warrant modelling now. If a contract renewal runs beyond April 2027, the terms should also be reviewed to confirm they won't restrict you from receiving the relief.
How can Big Energy Group help?
Preparing a BICS application requires a clear understanding of your site-level consumption, product classifications and metering infrastructure - areas that benefit from specialist input. Big Energy Group offers a managed levy exemption service designed to support businesses through this process.
Our process starts with an assessment of your eligibility for BICS and other relevant schemes, followed by a technical review of your operations to determine the level of exemption available. Support is provided throughout the application process, including the preparation and submission of retrospective claims where applicable.
To discuss your eligibility or learn how our experts can support your business, please email hello@bigenergygroup.co.uk for more information.
About Big Energy Group
Big Energy Group is a privately held, British-owned energy brokerage with an established track record of helping clients successfully navigate the energy market. The company has offices in Harrogate and the Tees Valley and serves more than 500 businesses across the UK. For more information, please visit bigenergygroup.co.uk.
