What Is the British Industrial Competitiveness Scheme (BICS)? A Complete Guide for UK Manufacturers

The British Industrial Competitiveness Scheme (BICS) is a new government scheme designed to reduce electricity costs for eligible UK manufacturers. From April 2027, qualifying businesses could reduce their electricity bills by up to 25% through exemptions from certain energy policy costs. 

The scheme forms part of the UK’s Modern Industrial Strategy and is intended to help British manufacturers compete more effectively by bringing industrial electricity costs closer to those seen in other European countries.

However, not every manufacturer will qualify. Eligibility depends on the products you manufacture, the sector you operate in and how electricity is used within your business. Understanding the rules can be challenging, particularly for organisations with multiple sites or a mix of manufacturing activities.

In this guide, we’re explaining how the British Industrial Competitiveness Scheme works, who could be eligible, how much businesses could save, and what steps you can take before applications open. Whether you’re looking to understand the scheme or find out if your business is likely to qualify, this guide will help you navigate the latest government guidance with confidence.

Key Takeaways:

• The British Industrial Competitiveness Scheme (BICS) is a government initiative that aims to reduce electricity costs for eligible UK manufacturers.
• BICS is expected to launch in April 2027, with applications anticipated to open during Autumn 2026.
• Businesses eligible for BICS could reduce electricity costs by up to 25% through exemptions from the Renewables Obligation (RO), Feed-in Tariffs (FiT) and Capacity Market (CM).
• Businesses must meet three key eligibility criteria for BICS, including operating in an eligible manufacturing sector, producing qualifying products and meeting the required electricity intensity threshold.
• BICS eligibility is assessed using factors including SIC codes, HS product codes and site-level manufacturing activity, meaning not every manufacturer will qualify.
• Manufacturers can begin preparing for BICS now by reviewing their energy data and understanding whether their sites are likely to meet the scheme requirements.

What Is the British Industrial Competitiveness Scheme (BICS)?

The British Industrial Competitiveness Scheme (BICS) is a government initiative that aims to reduce electricity costs for eligible manufacturing businesses across Great Britain. It does this by removing certain policy costs from electricity bills, helping businesses lower operating costs and improve their competitiveness.

For many manufacturers, electricity is one of the largest operating expenses. Higher energy costs can make it more difficult to compete with businesses in other countries, invest in new equipment, expand production or create new jobs. The government introduced BICS as part of its Modern Industrial Strategy to help address this challenge and support sectors considered important to the UK’s long-term economic growth.

Rather than providing a grant or direct payment, BICS reduces the amount eligible businesses pay towards three existing electricity policy schemes:

• Renewables Obligation (RO)
• Feed-in Tariffs (FiT)
• Capacity Market (CM)

These costs are normally included within business electricity bills. Under BICS, eligible manufacturers will receive exemptions from these charges, reducing the overall cost of electricity. The government estimates this support could be worth between £35 and £40 per MWh, with some businesses seeing electricity bills fall by up to 25%.

The scheme is due to begin in April 2027, with applications expected to open beforehand. While support will not be available immediately, businesses can start preparing now by understanding whether they are likely to qualify and ensuring they have the information needed to support an application.

Why Has the Government Introduced BICS?

The British Industrial Competitiveness Scheme was introduced in response to a long-standing challenge facing UK manufacturers: high electricity costs.

Compared with many other countries, manufacturers in Great Britain pay significantly more for electricity. These higher costs can make it harder to compete internationally, particularly in industries where energy is a major part of the manufacturing process. They can also affect decisions around investment, productivity and long-term growth.

BICS is intended to help address this by reducing some of the policy costs included within electricity bills for eligible manufacturers. 

By lowering operating costs, the government hopes to encourage investment, strengthen UK supply chains and improve the competitiveness of industries that play an important role in the country’s future economy.

The scheme forms part of the UK’s Modern Industrial Strategy, which focuses on supporting sectors with strong growth potential, including advanced manufacturing, clean energy, defence, digital technologies and life sciences. It also extends support to certain foundational manufacturing industries that supply these sectors with essential products and materials.

Who Is Eligible for BICS?

Not every manufacturer will qualify for the British Industrial Competitiveness Scheme. BICS is designed to provide targeted support to manufacturers operating in sectors that are considered strategically important to the UK’s long-term economic growth. To be eligible, a business must meet three key criteria.

BICS Eligibility Requirement	What It Means
Operate in an eligible industry	Your business must operate within an approved manufacturing frontier industry or qualifying foundational manufacturing industry.
Manufacture eligible products	You must manufacture products that fall within the government’s approved classifications. Eligibility is assessed using Standard Industrial Classification (SIC) codes alongside Harmonised System (HS) product codes.
Meet the electricity intensity requirement	Your manufacturing activities must meet the required electricity intensity threshold set by the government.

Meeting just one of these requirements is not enough. A business must satisfy all three to qualify for the scheme.

It’s also important to understand that eligibility is not based solely on your SIC code. While your sector is part of the assessment, the government will also consider the products you manufacture and how electricity is used within your operations. This means two businesses operating in the same industry may receive different outcomes depending on their manufacturing activities and energy usage.

For organisations operating across multiple sites, eligibility may also differ from one location to another. The scheme is intended to assess manufacturing activity at site level, meaning some facilities may qualify while others do not.

Because of these additional checks, many businesses will benefit from reviewing their energy data and manufacturing activities before applications open.

Which Industries Could Be Eligible?

The British Industrial Competitiveness Scheme is designed to support manufacturers operating in sectors that the government considers important to the UK’s future industrial growth. This includes both high-growth manufacturing industries and the businesses that supply them with essential materials and components.

Examples of industries that could qualify include:

• Advanced manufacturing
• Automotive manufacturing
• Aerospace
• Defence
• Clean energy technologies
• Pharmaceuticals and life sciences
• Steel and metal production
• Plastics manufacturing
• Chemical manufacturing
• Recycling and materials recovery
• Nuclear fuel processing
• Cooling and ventilation equipment manufacturing

However, simply operating within one of these industries does not automatically mean a business is eligible.

The government will assess both the sector your business operates in and the products you manufacture. Eligibility is determined using a combination of Standard Industrial Classification (SIC) codes and Harmonised System (HS) product codes, alongside the other qualifying criteria.

It’s also worth noting that some businesses may manufacture a mix of eligible and non-eligible products. In these cases, eligibility and the level of support may depend on how much of the site’s manufacturing activity relates to qualifying products.

If you’re unsure whether your business falls within an eligible sector, it’s worth reviewing your manufacturing activities now. Understanding how your products are classified before applications open can help avoid delays later in the process.

How Much Could Businesses Save Through BICS?

The main benefit of the British Industrial Competitiveness Scheme is lower electricity costs. By exempting eligible businesses from certain policy charges, the government estimates that BICS could reduce electricity costs by around £35 to £40 per MWh, with some manufacturers seeing overall electricity bills fall by up to 25%.

The exact level of support will depend on how much of a site’s electricity is used for eligible manufacturing activities. Rather than applying one decision across an entire business, BICS is expected to assess each manufacturing site individually.

Current government proposals use three support bands:

Eligible Manufacturing Activity at the Site	Level of Exemption
Less than 25%	No exemption
Between 25% and 50%	50% exemption
More than 50%	100% exemption

This means two sites owned by the same business could receive different levels of support depending on the products they manufacture and how electricity is used at each location.

While the potential savings are significant, businesses should avoid making assumptions based solely on their industry or current energy spend. The level of support will depend on meeting all of the eligibility criteria and providing the evidence required during the application process.

For businesses with high electricity consumption, even a partial exemption could represent a substantial reduction in operating costs over the lifetime of the scheme.

When Does the British Industrial Competitiveness Scheme Start?

Although the British Industrial Competitiveness Scheme has been announced, businesses cannot apply just yet.

The government expects the scheme to begin in April 2027, with legislation due to be introduced beforehand. Applications are expected to open during Autumn 2026, giving eligible businesses the opportunity to prepare their evidence before the scheme goes live.

Here’s the current timeline:

Date	Milestone
April 2026	Government publishes the final scheme design.
Autumn 2026	Applications expected to open.
April 2027	BICS officially launches and eligible businesses begin receiving relief.
2030	Government review of the scheme.
2035	Current planned end date for the scheme.

While support is still some time away, businesses don’t need to wait before taking action.

Preparing early can make the application process much smoother. Reviewing your electricity usage, understanding which manufacturing activities may qualify and ensuring your site information is up to date can all help avoid delays once applications open.

It’s also a good opportunity to review your wider energy strategy. Even if your business doesn’t qualify for BICS, there may be other ways to reduce energy costs through procurement, efficiency improvements or decarbonisation initiatives.

How Can Businesses Prepare for BICS?

Although applications are not expected to open until Autumn 2026, there are several practical steps manufacturers can take now to put themselves in the best position.

The application process is likely to require businesses to demonstrate that they meet the scheme’s eligibility criteria and provide supporting evidence. Preparing this information in advance can make the process much simpler once applications open.

Some useful steps include:

• Reviewing your current electricity bills and energy consumption.
• Identifying which manufacturing sites may be eligible.
• Understanding which products are manufactured at each site.
• Confirming your business’s SIC code and how your products are classified.
• Reviewing how electricity is used across your manufacturing processes.
• Gathering any information that may be needed to evidence qualifying manufacturing activity.

For some businesses, establishing eligibility may be straightforward. For others, particularly those operating multiple sites or manufacturing a range of different products, it can be more complex.

An early review can help identify whether your business is likely to qualify and highlight any gaps in the information needed before applications begin.

Check Your Potential BICS Eligibility

If you’re unsure whether your business could benefit from the British Industrial Competitiveness Scheme, The National Energy Hub can help.

Upload a recent electricity bill and our team will carry out an initial eligibility review. We’ll assess whether your business is likely to qualify based on the latest government guidance and explain the next steps.

If BICS isn’t the right fit, we can also identify other opportunities to reduce your energy costs through procurement optimisation, energy management and decarbonisation planning.

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Frequently Asked Questions About the British Industrial Competitiveness Scheme

Does every manufacturer qualify for BICS?

No. BICS is a targeted scheme aimed at specific manufacturing industries and qualifying supply chain businesses. Eligibility depends on the sector you operate in, the products you manufacture and how electricity is used within your manufacturing activities.

Can SMEs apply for the British Industrial Competitiveness Scheme?

Yes. The scheme is not limited to large manufacturers. Small and medium-sized businesses may also qualify if they meet the eligibility requirements. The focus is on manufacturing activity rather than business size.

When does BICS start?

The scheme is expected to launch in April 2027, with applications anticipated to open during Autumn 2026. Businesses can begin preparing now by reviewing their energy usage and understanding whether they are likely to qualify.

Can businesses with multiple sites qualify?

Yes. Eligibility is expected to be assessed on a site-by-site basis. This means one manufacturing site may qualify while another owned by the same business may not, depending on the activities carried out and the proportion of electricity used for eligible manufacturing.

Can I receive both BICS and British Industry Supercharger support?

No. Businesses cannot receive support through both schemes for the same activities. If your business qualifies for the British Industry Supercharger, that scheme is generally expected to provide a higher level of support.

Does BICS apply in Northern Ireland?

No. The British Industrial Competitiveness Scheme currently applies to businesses in England, Scotland and Wales. It does not apply in Northern Ireland because energy policy is largely devolved there.

How can I check if my business is eligible for BICS?

The easiest way to start is by reviewing your recent electricity bills and manufacturing activities. If you’re unsure whether your business could qualify, you can upload a recent electricity bill here for an initial eligibility review. We’ll assess your likely eligibility and explain the next steps based on the latest government guidance.