The British Industrial Competitiveness Scheme (BICS)
For many energy-intensive UK businesses, rising electricity costs have become an increasingly uncomfortable thorn in their side. Even as wholesale energy prices have fallen from their peaks, government levies and other non-commodity costs continue to put pressure on the competitiveness of British manufacturing.
The Government's answer is the British Industrial Competitiveness Scheme (BICS) – a new scheme designed to reduce electricity costs for eligible businesses.
With BICS now moving towards implementation, businesses should understand whether they are eligible, how much they could save and how their electricity contract could affect the benefit.
What is the British Industrial Competitiveness Scheme?
The British Industrial Competitiveness Scheme (BICS) is a Government scheme designed to reduce electricity costs for eligible manufacturing businesses in Great Britain.
Eligible businesses will be exempt from the indirect costs of three electricity policy schemes:
The Government estimates that BICS will be worth approximately £35–£40/MWh, equivalent to around 3.5–4p/kWh. For some electricity-intensive manufacturers, this could mean annual savings of hundreds of thousands of pounds.
BICS is scheduled to begin in April 2027, with the Capacity Market exemption following in October 2027.
The Government has also confirmed that eligible businesses will receive an additional payment in 2027 reflecting the support they would have received had BICS been operational from April 2026.
Who is eligible for BICS?
BICS is targeted at electricity-intensive manufacturing businesses operating within:
- Manufacturing frontier industries in the Industrial Strategy's IS-8 growth sectors
- Manufacturing foundational industries that supply important inputs to those frontier industries
Businesses must also meet the relevant electricity-intensity requirements.
BICS eligibility is determined using SIC codes and HS codes. SIC codes identify the manufacturing activity undertaken by a business, while HS codes identify the products being manufactured.
The Government has now confirmed the eligibility framework and published the relevant SIC and HS codes.
The final criteria also include different electricity-intensity thresholds for frontier and foundational industries, meaning not every manufacturer within an eligible sector will automatically qualify.
What if a business manufactures both eligible and non-eligible products?
This is particularly important for manufacturers with diverse production.
BICS uses a site-level approach based on the proportion of electricity used for eligible manufacturing. The confirmed rules are:
- Less than 25% eligible electricity: no exemption
- 25% to less than 50%: 50% exemption
- 50% or more: 100% exemption
Businesses will need to provide evidence supporting the proportion of electricity used for eligible products.
Image from British Industrial Competitiveness Scheme: consultation on scheme eligibility and approach - GOV.UK
How BICS interacts with the British Industry Supercharger
For businesses already receiving support from the British Industry Supercharger (BIS), the interaction between the two schemes is important.
Both BICS and the Supercharger provide exemptions from RO, FiTs and Capacity Market costs.
However, the British Industry Supercharger also provides additional support through Contracts for Difference-related costs and Network Charging Compensation (NCC).
The same exemptions cannot be claimed twice. Businesses eligible for both schemes would therefore generally be expected to benefit more from the British Industry Supercharger, because it provides a higher overall level of support.
The key advantage of BICS is that its eligibility criteria are broader, allowing more manufacturers that do not qualify for the Supercharger to benefit.
Why your electricity contract matters
Unlike simply receiving a Government payment, the way BICS interacts with your electricity contract and non-commodity charges is important.
If you lock into a contract that fixes non-commodity components beyond April 2027, you need to understand what happens when BICS removes the relevant charges.
For example, if a manufacturer signs a three-year fixed electricity contract in 2026, it could still be paying under that contract when BICS becomes operational.
Before signing your next electricity contract, check:
- Which non-commodity costs are fixed?
- Which charges are passed through?
- What happens if a Government levy is reduced or removed?
- How will BICS exemptions be reflected in your electricity price?
- Does the contract protect you against future regulatory changes?
The cheapest headline electricity price isn't necessarily the cheapest overall contract.
For a manufacturer potentially saving hundreds of thousands of pounds through BICS, the treatment of non-commodity costs could be significant.
What can manufacturers do now?
Although BICS doesn't begin until 2027, the time to start preparing is now:
- Check your eligibility: identify your SIC codes and the HS codes applicable to the products you manufacture.
- Review your electricity usage: establish consumption across each manufacturing site and the proportion relating to eligible products.
- Review your MPANs: make sure you understand which meters relate to each site and eligible manufacturing activity.
- Model your potential savings: a £35–£40/MWh reduction could represent a substantial saving for electricity-intensive businesses.
- Check your electricity contract: if your next renewal runs beyond April 2027, make sure the contract doesn't prevent you benefiting from BICS.
How we can help
At SeeMore Energy, we can support manufacturers with:
- BICS eligibility checks – reviewing SIC and HS codes
- Savings forecasts – estimating the potential value of BICS across your sites
- MPAN and site analysis
- Contract reviews and renewal strategy – ensuring BICS is considered when negotiating your next electricity contract
- Energy procurement
- Ongoing invoice and non-commodity validation – checking that the correct BICS exemptions are applied once the scheme is operational
By sharing a description of what you manufacture and a recent electricity invoice, we'll be able to give you a clear view of whether you're likely to qualify for BICS and what the scheme could realistically be worth to your business.
Contact SeeMore Energy today for a free BICS eligibility and energy-cost review.
Frequently Asked Questions
What is BICS?
The British Industrial Competitiveness Scheme (BICS) is a Government scheme designed to reduce electricity costs for eligible UK manufacturers by exempting them from the indirect costs of the Renewables Obligation, Feed-in Tariffs and Capacity Market.
When does BICS start?
BICS is scheduled to begin in April 2027, with the Capacity Market exemption following in October 2027.
How much can BICS save?
The Government estimates that BICS will reduce eligible businesses' electricity costs by approximately £35–£40/MWh, or 3.5–4p/kWh.
Which manufacturers qualify for BICS?
BICS is aimed at eligible manufacturing businesses in the Industrial Strategy's IS-8 frontier industries and foundational manufacturing industries, subject to the relevant SIC, HS and electricity-intensity criteria.
Can I receive both BICS and the British Industry Supercharger?
No. The same exemptions cannot be received through both schemes. Businesses that qualify for the Supercharger would generally receive greater support through that scheme.
Do I need to change my electricity contract for BICS?
Not necessarily, but you should review your contract before renewing. The way your contract treats non-commodity costs could affect how future BICS exemptions are passed through to your business.
When should manufacturers start preparing for BICS?
Now. Businesses should check their SIC and HS codes, electricity usage, site and MPAN arrangements and, particularly, any electricity contract that will continue into 2027.
