Energy Cost support for UK manufacturers

British Industrial Competitiveness Scheme (BICS)

The UK Government has announced new long‑term support to help over 10,000 manufacturing businesses manage high electricity and fuel‑driven energy costs, through reduced electricity bills rather than grants.

What is the British Industrial Competitiveness Scheme?

• a Government scheme designed to address the UK’s structurally high industrial electricity costs.
• targets electricity‑intensive manufacturing businesses that are critical to UK competitiveness.
• delivered through electricity bill reductions, not cash subsidies.
• part of the Government’s Modern Industrial Strategy.

What support is available?

Eligible manufacturers will benefit from:

• electricity bill reductions of up to 25 percent
• relief achieved by removing key policy‑related charges from electricity bills, including:
  • renewables Obligation
  • feed‑in Tariffs
  • capacity Market charges
• estimated value of support is around £35 to £40 per MWh of electricity used.

Timing of support

• April 2027 – main electricity bill reductions begin.
• 2027 one‑off payment – compensates eligible businesses for support that would have applied from April 2026 to March 2027, due to delays in bringing the scheme into force. This may have accounting implications and to which year you recognise this in.

Who the scheme is aimed at

• over 10,000 electricity‑intensive manufacturers across Great Britain.
• focus on sectors such as:
  • automotive and aerospace
  • steel, metals and chemicals
  • pharmaceuticals and life sciences
  • clean energy and advanced manufacturing supply chains
• expansion includes businesses previously outside scope, widening coverage by around 40 percent.

How eligibility works

• businesses do not apply directly for the scheme.
• eligibility is determined centrally using:
  • manufacturing sector activity
  • electricity intensity
  • government‑defined classification criteria
• support will be applied automatically through electricity suppliers once the scheme is live.
• there is no public list of named companies.

Geographic coverage

• applies across England, Scotland and Wales.
• funding has also been confirmed to enable Northern Ireland to implement a local equivalent scheme, addressing competitiveness issues linked to energy costs.

Key limitations to note

• support focuses on electricity costs, not fuel duty or petrol and diesel prices.
• not all manufacturers will qualify, particularly those with lower electricity intensity.
• business groups have welcomed the scheme but note that short‑term cost pressures in 2026 remain until support begins.

What manufacturers should do now?

• review whether electricity is a material cost in production.
• check sector classification and manufacturing activity i.e. your SIC code at Companies House
• monitor GOV.UK and supplier communications for confirmation of eligibility.
• factor the expected support into medium‑term cash flow and pricing plans.

The Government will cut electricity bills for over 10,000 energy‑intensive manufacturers from 2027 to help offset high fuel and energy costs. Most eligible businesses will see the benefit automatically through their electricity bills, with no application required.

If you would like a realistic view of how your business might be valued or want to identify the specific issues that might affect a future sale, please contact Michaela Johns by using the details below.