The UK Government has responded to the consultation on the British Industrial Competitiveness Scheme (BICS) and it has revealed a significant boost to UK businesses across several sectors.
Chancellor of the Exchequer Rachel Reeves announced that the government “will cut energy bills for over 10,000 manufacturers, helping businesses to compete, win and create good jobs across the country.”
Below, we highlight the key takeaways and explain what the BICS consultation response means for UK businesses.
Key takeaways from the BICS consultation response
- Relief from the Renewables Obligation (RO) and Feed‑in Tariff (FiT) charges will begin in April 2027, with Capacity Market charge relief following from October 2027.
- Eligibility is open to both SMEs and large companies, with no preference based on business size. Relief will be applied at individual site level, in proportion to the electricity used at that site to produce qualifying manufactured goods.
- Sites where less than 25% of electricity consumption relates to eligible manufacturing will not qualify for support; sites with 25% to under 50% eligible use will receive a 50% exemption, while those with 50% or more eligible use will receive a full (100%) exemption.
- A retrospective payment will be made to reflect the relief that eligible businesses would have received if BICS had been in place from April 2026; further details on the mechanics of this payment will be released separately.
What the BICS consultation response confirmed
The BICS consultation response has confirmed much of what we expected; the scheme will begin in April 2027 and offer eligible businesses exemption from the indirect costs of three electricity schemes: the Renewables Obligation, Feed-in Tariffs and the Capacity Market.
The government has stated an estimated benefit of around £35–£40 per MWh for up to 10,000 businesses.
This is a welcome boost to businesses that have been feeling the impact of the rise in energy costs since 2021, as well as, in some cases, businesses experiencing the impact of the volatility in the market witnessed in the last month.
As ever when reviewing new government schemes the devil is in the detail, and it is this detail that can be the difference between receiving support or not. The BICS scheme has a variety of challenges when it comes to getting the benefit of the scheme with checks on sector, product and intensity all at site level.
BICS support is needed urgently to help with UK businesses energy costs
It is clear that this kind of government intervention is hugely welcome, businesses need support with the high cost of energy, both to remain competitive but also to keep the lights on. The support is needed now and although the government has listened to requests such as ours to speed up the process by offering a route to backdated payments, the benefit will not be seen on the bottom line until, at the earliest, this time next year.
Not only is it hugely important that eligible companies see the benefit soon, as many businesses as possible need to pass the eligibility checks. We will be working across all relevant sectors to get businesses access to what could be significant reductions to their energy bills.
Leyton’s response
At Leyton we support businesses in building energy strategies – whether that be through sustainable reporting and energy reduction advice, or energy tax relief schemes and making sure that businesses pay no more than they must – so we welcome any scheme like this which supports with the continued rise in energy costs.
Have a question about what the BICS consultation response means for your business? Check out our webinar: How the UK energy landscape is evolving and what it means for you. Or feel free to contact us for an informal chat about ways to reduce your energy costs.
If you enjoyed this article, you might also like:
How to turn carbon reporting and compliance into a competitive business advantage
Our energy advice for businesses during times of market volatility
