Eligibility criteria for British Industrial Competitiveness Scheme under consultation    

The Department for Business and Trade seeks views on the proposed approach to the new British Industrial Competitiveness Scheme and how eligible businesses should be selected. 

What is the British Industrial Competitiveness Scheme (BICS)?

Announced as part of the government’s Modern Industrial Strategy, BICS is set to provide eligible manufacturing businesses with exemptions from the indirect cost of the Renewables Obligation, Feed-In Tariffs and Capacity Market schemes. Whether this exemption is going to be 100% is part of the consultation.

The government currently expects this exemption to reduce costs for eligible businesses by between £35 per MWh and £40 per MWh. 

The proposed scheme is due to commence in April 2027, subject to implementing legislation and the completion of subsidy control processes. The scheme is set to run until 2035, with a review in 2030. 

What is the consultation about?

The consultation document outlines three criteria.

Eligible businesses must: 

• Operate in a manufacturing frontier industry within the Industrial Strategy’s growth sectors (the ‘IS-8’), or in a manufacturing foundational industry providing important inputs to the frontier industries.
  • As part of this consultation, the government will consider if the associated list of Standard Industrial Classification (SIC) or ‘Harmonised System’(HS) codes need to be adapted. Moreover, alternative approaches to scheme eligibility are considered to better capture industries where SIC/HS code mapping is challenging and ensure consistency with other Industrial Strategy initiatives.

• Be manufacturers: This scheme will filter for manufacturing activity at both the sectoral and business level.

• Meet the required level of electricity intensity: The government is considering the most appropriate combination of tests to administer at sector- and business-level.

What else is included in the consultation?

Pro-rating exemptions

According to the consultation document, many businesses are likely to produce a mixture of both eligible and ineligible products. 

To accommodate this, the Department for Business and Trade is consulting on the option to administer exemptions on a pro-rated basis. 

• Option 1: Exemptions are pro-rated: Under this approach, applicants would need to provide verifiable evidence of the percentage of their output comprised of eligible products. Rather than receiving a 100% exemption from the relevant levy costs, the business would receive a proportional exemption based either on proportion of revenue generated by eligible products, or proportion of electricity usage in the manufacture of eligible products. 

• Option 2: Exemptions are not pro-rated: Under this approach, all businesses which meet the eligibility criteria would be exempt from 100% of the relevant levy costs. For businesses producing both eligible and ineligible products, there would be an additional test to determine if they – overall – operate in an Industrial Strategy sector.

How can Inspired help you?

Levy exemption schemes are a pivotal opportunity for eligible businesses to reduce energy costs and claim back resources to reinvest into your organisation.

Your eligibility has nothing to do with the type of energy contract you are on or how you are reducing your emissions – you may even qualify for more than one type of exemption.

While further details around the British Industrial Competitiveness Scheme are to be confirmed, now is an opportune time to scrutinise if there is money to be recovered or saved for your organisation.

Inspired’s fully managed levy exemption service supports you throughout the claims process, from assessing your eligibility to completing your application and taking care of your ongoing commitments to lessen your administrative burden. 

Moreover, now is the time to examine how non-commodity costs impact your portfolio. Our Forensic Energy Cost Audit will scrutinise all your non-commodity costs – not just levy exemptions.

Our experts will analyse your present and past energy non-commodity costs for past errors of up to six years prior, and you could also benefit from ongoing savings. This service operates on a share of savings-basis, so if we find nothing – there is no fee.  

What happens next?

This consultation closes on 19 January 2026. More information about this consultation and how to take part can be found on the gov.uk website.