What is the British Industrial Competitiveness Scheme?

High electricity costs continue to be one of the most significant challenges facing UK manufacturers. In response, the government has introduced the British Industrial Competitiveness Scheme (BICS) as part of its wider Industrial Strategy, with the aim of improving the long-term affordability of energy for industry. The scheme is expected to come into effect from April 2027 and is designed to support manufacturers by reducing the structural costs built into electricity pricing. 

The British Industrial Competitiveness Scheme is a proposed government initiative that will reduce electricity costs for qualifying manufacturers by exempting them from certain policy-related levies currently applied to electricity bills. Rather than acting as a short-term intervention, BICS is intended to provide long-term support to improve productivity, encourage investment and strengthen strategically important supply chains across the UK economy. 

For many manufacturers, electricity is a core production cost rather than a simple overhead. Rising and volatile energy prices directly affect operating margins, pricing decisions and the ability to invest in growth. By lowering electricity costs, BICS aims to improve international competitiveness and provide manufacturers with greater certainty, allowing them to reinvest in automation, skills and decarbonisation initiatives. For eligible businesses, this could result in electricity bill reductions of around 20–25%, depending on usage levels and exposure to policy levies. 

Under the current proposals, eligible manufacturers would be exempt from several electricity levies that fund wider energy policy initiatives, including the Renewables Obligation, Feed-in Tariffs, Contracts for Difference and Capacity Market charges. Together, these levies typically add £35–£40 per megawatt-hour to electricity prices, meaning their removal could deliver a meaningful and sustained reduction in energy costs. 

Following consultation, final policy design and legislative approval the scheme is planned to run until 2035, with a formal review scheduled for 2030. From that point, the government is considering introducing additional requirements linked to energy flexibility and system readiness, reflecting the evolving nature of the UK energy system. 

While final eligibility criteria are still being developed, BICS is expected to focus on manufacturers that are both electricity intensive and strategically important to the UK economy. This is likely to include businesses operating in high-value sectors such as automotive, aerospace, chemicals and advanced materials, as well as manufacturers that play a critical role in supplying components and materials into key industrial supply chains. Eligibility is expected to be assessed using electricity intensity thresholds to ensure support is targeted where it delivers the greatest economic impact. 

BICS does not sit in isolation. It forms part of a broader package of measures designed to strengthen UK industrial competitiveness, including improvements to grid connectivity, investment in clean and secure energy supply, workforce and skills development and support for innovation and advanced manufacturing. Together, these initiatives aim to create a more stable and attractive environment for long-term industrial investment. 

Although the scheme will not be implemented until 2027, manufacturers can take steps now to prepare. Reviewing electricity usage and cost exposure, assessing potential eligibility, monitoring policy developments and factoring potential future energy savings into strategic planning will help businesses position themselves to benefit once the scheme is finalised. 

The British Industrial Competitiveness Scheme represents one of the most significant changes to industrial energy pricing in recent years. Understanding how it may apply to your business and how it fits within a wider energy and procurement strategy, will be key to maximising its value.

We're here to support manufacturers by assessing eligibility, quantify potential savings and preparing for the changes ahead. 

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