The British Industrial Competitiveness Scheme (BICS) is a new Government scheme aimed at improving the international competitiveness of UK industry by lowering electricity costs for qualifying manufacturers. After an initial round of consultation the government issued a second round of consultation on the 16th of April 2026 focusing on the specific aspects of the scheme, with the closing date of the 14th of May 2026.
Rather than subsidising energy costs directly, BICS works by removing certain policy‑related charges from electricity bills. These charges currently fund renewable generation and security‑of‑supply mechanisms and can represent a meaningful proportion of industrial electricity costs.
This article outlines the latest known elements of the scheme, including eligibility, cost exception and next steps for manufacturing companies.
What is the British Industrial Competitiveness Scheme (BICS)?
The UK government is set to launch the British Industrial Competitiveness Scheme (or BICS) in April 2027, the first period of the scheme will run 2027 – 2035, with a review in 2030. The aim of this scheme is to reduce electricity costs for manufacturing frontier industries within the Industrial Strategy’s growth sectors (the IS-8) and manufacturing foundational industries which provide important inputs to the frontier industries, who meet a certain threshold of electricity intensity.
Eligible businesses will be exempt from paying the indirect costs of the Renewables Obligation (RO), Feed-in Tariffs (FIT) and the Capacity Market (CM). The Renewables Obligation and Feed-in Tariffs require electricity suppliers to make payments to support generation of electricity from renewable sources. The Capacity Market requires electricity suppliers to make payments to ensure the UK has adequate electricity capacity; the cost of which is recovered from their commercial customers.
The Government expects this exemption to reduce costs for eligible businesses by between £35 per MWh and £40 per MWh.
The goal is that by reducing electricity costs for certain businesses, this will free up capital for investment and make manufacturing in the UK globally competitive.
Who will be eligible for BICS?
To be eligible for BICS a business must meet the following requirements:
- Operate in one of the manufacturing frontier industries within an IS-8 sector (identification is a relevant SIC code), or in a manufacturing foundational industry which provides important inputs to the frontier industries.
- Carry out manufacturing activities.
- Meet the required level of electricity intensity.
The IS-8 are the sectors identified by the Industrial Strategy as having the highest potential to drive growth across the whole economy. Within those sectors, the frontier industries are the subsectors at the cutting edge.
| IS-8 sectors Manufacturing frontier industries | Manufacturing frontier industries |
|---|---|
| Advanced Manufacturing | Advanced materials Aerospace Agri-Tech Automotive Batteries Space |
| Clean energy industries | Carbon capture, utilisation and storage, and greenhouse gas removals Heat pumps Hydrogen Nuclear fission and nuclear fusion Offshore and onshore wind |
| Defence | Combat air Complex weapons Directed energy Drones and autonomous systems Maritime capabilities |
| Digital and technologies | Advanced connectivity technologies Artificial intelligence Cyber security Engineering biology Quantum technologies Semiconductors |
| Life sciences | Biopharma MedTech |
The IS-8 Sectors and Manufacturing Frontier Industries with the connecting SIC codes had been listed in the following link: https://www.gov.uk/government/publications/industrial-strategy/industrial-strategy-sector-definitions-list
Eligibility
- The scheme applies only in Great Britain. To qualify for the British Industrial Competitiveness Scheme (BICS), a business must operate in an eligible sector and manufacture at least one eligible product.
- Electricity intensity will be calculated as follows: electricity expenditure / GVA
Thresholds
- Manufacturing frontier industries only SIC code, with electricity intensity over 0.9%
- Manufacturing foundational industries only SIC codes, with electricity intensity over 2.7%
Year 1 of BICS timeline
- 01/10/26 - 30/11/2026: Businesses invited to provide information to Department for Business and Trade (DBT) regarding eligibility.
- 01/10/26 - 08/01/2027: DBT will assess and grant eligibility for businesses. DBT intends for eligible business information to be available to electricity suppliers and settlement bodies from November 2026 onwards in a live database and will aim to confirm all eligible businesses by 8 January 2027 for Year 1 of the scheme. Depending on system readiness, DBT may also begin this process earlier than October 2026.
- November 2026 – 1 April 2027: Once eligible businesses begin being confirmed, electricity suppliers will have until April 2027 to process exemptions for eligible businesses, including setting up relevant arrangements and data flows.
If a business is unable to be identified in this window, they will be required to wait until the next identification window to be considered for the scheme.
For subsequent years DBT proposes that businesses will be able to gain eligibility for BICS on a rolling basis with an annual cut-off to allow eligibility and exemption processing, rather than only during fixed application windows.
Confirming eligibility for BICS
Eligible businesses will receive formal confirmation that they have met the criteria for BICS. It is intended that this will take the form of a structured data record held within DBT’s data platform, rather than a stand‑alone paper or PDF certificate.
This data will also be shared with electricity suppliers and settlement bodies.
Exemption validity periods
To balance the administrative burden and certainty for industry and suppliers with the need to ensure BICS is supporting the right cohort at the right level, DBT proposes a two-year certificate validity period after which a full recertification process would take place.
For the first cohort, exemptions are proposed to cover:
- 1 April 2027 to 31 March 2029 for RO and FIT.
- 1 October 2027 to 30 September 2029 for the CM.
- Mandatory yearly declaration in non-re-certification years.
What should manufacturers start thinking about BICs?
Although BICS does not start until 2027, manufacturers should begin preparing early. Key steps include:
- Reviewing whether sites are likely to fall within eligible sectors
- Understanding electricity use at site level
- Identifying complex metering or third party supply arrangements
- Planning ahead for the October 2026 application window
For eligible manufacturers, BICS represents a major opportunity to reduce energy costs, improve cost certainty, and support long term investment decisions.
How Can NUS Support?
Our UK office has a dedicated team committed to international Sustainability Services. Our Sustainability team supports industrial and manufacturing organisations with energy management and audits, energy and carbon compliance, decarbonisation road-mapping, and support with implementation of onsite generation. We also support compliance with the Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS), Climate Change Agreement (CCA), Carbon Reduction Plan (CRP), and Streamlined Energy and Carbon Reporting (SECR).
For next steps, reach out to NUS to discuss the scheme in more detail and if suitable, begin the below process:
- Eligibility Review
- Process Review
- BICs Application
- Ongoing Analysis and Review
Please contact NUS online or email UKSustainability@nusconsulting.co.uk for more information.