What the expansion of BICS means and what happens next

The expansion of BICS (British Industrial Competitiveness Scheme)

Electricity costs are a major consideration for many manufacturing businesses. To help address this, the UK Government is moving forward with the British Industrial Competitiveness Scheme (BICS) a new policy designed to reduce electricity costs for energy‑intensive manufacturers and help UK industry remain competitive.

While BICS still requires parliamentary approval, it is firmly on track. Below, we explain what BICS means for your business (if eligible), what has recently changed, and how you can prepare for what comes next.

What is BICS?

BICS is a Government scheme that will reduce certain electricity policy costs for qualifying manufacturing businesses.

If your business is eligible, you could receive a partial or full exemption from the following electricity charges:

• Renewables Obligation (RO)
• Feed‑in Tariff (FIT)
• Capacity Market (CM) charges

These charges fund low‑carbon generation and security of electricity supply. BICS is designed to ease the cost burden where electricity use plays a significant role in your competitiveness.

What’s changed and why this matters

Since BICS was first announced, the Government has expanded the scope of the scheme:

• Originally expected to cover around 7,000–8,000 businesses
• Now expected to include around 10,000 manufacturing businesses eligible for support of around £35 to £40/MWh. These estimates are subject to final scheme design and consumption forecasts.

If your business operates within the IS‑8 sector (as defined by specific SIC codes), you are more likely to be eligible under the expanded criteria. This change reflects feedback from industry on the importance of broader and more consistent coverage.

How the exemptions will work

Eligibility and exemption levels will be determined using a simple, evidence‑based approach.

If your site qualifies, it will receive either:

• 50% exemption, or
• 100% exemption

This depends on how much of your site’s electricity consumption is directly linked to BICS‑eligible manufacturing activity, assessed per site and supported by evidence.

Please note:

• Sites where less than 25% of electricity use is eligible will not qualify
• From year two onwards, the Government may adjust exemption levels if overall scheme costs are forecast to exceed the budget

When will BICS start?

Because BICS interacts with existing electricity schemes, start dates align with established scheme years:

• RO and FIT exemptions: from April 2027
• Capacity Market exemptions: from October 2027

The Government plans to formally review BICS in 2030.

What happens next?

Some delivery details are still being finalised, including how exemptions will be applied in practice.

The Government has also announced plans for a one‑off rebate in April 2027, covering policy costs ‘eligible businesses’ would have faced during 2026. Further guidance on this will be published in due course.

How we’ll support you

We are engaging constructively with DBT on the details of the scheme and as more detail becomes available, we’ll continue to keep you informed.