The British Industrial Competitiveness Scheme, or BICS, is part of the UK government’s plan to address high industrial electricity costs and make manufacturing in the UK competitive in the global market. The current consultation is drawing to a close with the scheme launching in 2027.
This article outlines the known details of the scheme, including eligibility, cost exemptions, and consultation considerations, as well as the discussion points from the consultation.
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. However, it is currently unclear if businesses will be exempt from paying 100% of the indirect costs or a partial amount.
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 despite high industrial electricity costs.
What is the BICS consultation about?
Currently BICS is under consultation, which is due to end on the 19 January 2026.
The aim of the consultation is to gather views on, and finalise the proposed approach of, the British Industrial Competitiveness Scheme, and how businesses within the Industrial Strategy manufacturing frontier industries eligible for the scheme should be selected.
A key part of the consultation are the options for addressing businesses that produce a combination of eligible and ineligible products, and mainly whether to offer the exemptions to levy costs on a pro-rated basis.
- Pro-rated exemptions may provide businesses with proportional exemptions based on the percentage of eligible products manufactured. To demonstrate if products are eligible, businesses will provide ‘Harmonised System’ (HS) codes for products. For example, if 65% of products are eligible, then the business will receive an exemption of 65%. Alternatively, the pro-rated exemption could be calculated based on the amount of electricity consumed to manufacture eligible products.
- Non-pro-rated exemptions would enable all eligible businesses to receive 100% of the cost exemptions. However, businesses that manufacture eligible and ineligible products would have to provide additional evidence to decide if the percentage of eligible products is sufficient to classify the business as operating in an Industrial Strategy sector.
Who will be eligible for BICS?
As it stands, 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, 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: this level, and how it is measured, is still in discussion as part of the consultation.
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 |
|---|---|
| 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 scheme only applies to Great Britain as the energy policies in Northern Ireland are largely devolved.
How NUS Can 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).
Please contact NUS online or email UKSustainability@nusconsulting.co.uk for more information.