The British Industrial Competitiveness Scheme (BICS) is a flagship policy within the UK’s new Industrial Strategy, designed to tackle one of the most persistent challenges facing British manufacturers: high energy costs.
From April 2027, the scheme is expected to deliver significant reductions in energy bills for eligible businesses, helping UK industry compete more effectively on the global stage.
What is the British Industrial Competitiveness Scheme?
The British Industrial Competitiveness Scheme is a government-backed initiative that will reduce electricity costs for qualifying UK manufacturers by exempting them from certain levies.
The scheme forms part of a wider effort to:
- Boost industrial productivity.
- Encourage domestic and foreign investment.
- Protect critical supply chains.
- Support long-term economic growth.
Why the scheme matters for UK manufacturing
For many manufacturers, energy costs represent a significant share of their total operating expenditure, directly affecting margins, pricing and competitiveness.
By reducing these costs, BICS is intended to:
- Improve the UK’s attractiveness as a manufacturing location.
- Enable reinvestment in skills, automation and decarbonisation.
- Safeguard jobs across industrial regions.
In practical terms, the scheme could reduce electricity bills for eligible businesses by around 25%, depending on usage and levy exposure.
How will BICS reduce electricity costs?
Electricity levy exemptions
Under the current proposals, BICS will exempt qualifying manufacturers from several key electricity levies, including:
- The Renewables Obligation (RO)
- Feed-in Tariffs (FiTs)
- Contract for difference (CfD)
- The Capacity Market
Together, these exemptions could reduce electricity costs by approximately £35–£40 per megawatt-hour.
When will the BICS scheme start?
The British Industrial Competitiveness Scheme is expected to come into effect from April 2027, following consultation, final policy design and legislative approval.
How long will the BICS scheme run for?
The exemption scheme is planned to run until 2035, with a review in 2030. From 2030, the Department for Trade (DBT) is considering adding a flexibility-readiness requirement to the scheme.
Who is likely to be eligible for BICS?
The scheme is expected to focus on:
Electricity-intensive manufacturers
Businesses where electricity costs make up a significant proportion of production expenses.
Frontier manufacturing sectors
High-growth, high-productivity industries identified as strategically important to the UK economy, such as:
- Automotive.
- Aerospace.
- Chemicals.
- Advanced materials.
Foundational supply chain businesses
Manufacturers that play a critical role in supplying components or materials into frontier sectors.
Eligibility is likely to be determined using electricity intensity thresholds, ensuring support is targeted where it delivers the greatest economic impact.
How BICS fits into the UK Industrial Strategy
BICS is not a standalone intervention. It sits alongside broader government measures designed to strengthen UK industrial competitiveness, including:
- Faster grid connection.
- Investment in clean and secure energy supply.
- Skills and workforce development.
- Support for innovation and advanced manufacturing.
Together, these initiatives aim to create a more stable environment for long-term investment.
What should businesses do now?
Although BICS will not launch until 2027, manufacturers should start preparing now by:
- Reviewing electricity usage and cost exposure.
- Identifying whether their operations may meet electricity-intensity thresholds.
- Monitoring government consultations and policy updates.
- Factoring potential energy cost reductions into future investment plans.
How can Consultiv Utilities help?
The British Industrial Competitiveness Scheme represents one of the most significant reforms to industrial energy pricing in recent years.
Our experts are on hand to provide advice and support to manufacturers looking to make savings through the scheme
If you think that your business may be eligible for the scheme and you’d like to explore the next steps, don’t hesitate to get in touch.
Helen Barnet-Watson
Head of Sustainability
The British Industrial Competitiveness Scheme is a welcome step for UK manufacturers long impacted by high electricity costs. At Consultiv, we’re helping clients understand their eligibility and prepare to maximise the benefits.
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