WIREDGOV

The UK Government yesterday (16/04/2026) published its response to the consultation on the British Industrial Competitiveness Scheme (BICS). ​The BICS was first announced in the 2025 Industrial Strategy, and is designed to provide energy relief through exempting eligible IS-8 businesses, namely energy-intensive manufacturers or those in their supply chain, from paying the indirect costs of the Renewables Obligation (RO), Feed-in Tariffs (FiT), the Capacity Market (CM). At the end of 2025, the Government ran a consultation on how to determine eligibility for support, to which techUK responded. 

techUK is glad to see that BICS will not be funded via a new levy on domestic or non-domestic bills. However, despite the expansion of BICS leading to a further 3,000 businesses being covered, the scheme fails to account for several strategically important sectors hit hard by high energy bills, such as the digital infrastructure that underpins a modern economy. This cherry-picking approach will inevitably leave excluded sectors feeling abandoned, which is why urgent action is needed to reduce energy bills across the board through reform of non-commodity costs (such as levies to fund environmental and social schemes) instead of discounts being awarded to specific businesses, and we regret that the Government have not taken the opportunity to do this. 

Yesterday’s response to the BICS Consultation outlined how the policy will work in practice once it is implemented in April 2027. The Government plan to use SIC4 codes to determine eligible manufacturing activities (a full list can be found on the GOV.UK website) and also aim to use an ‘electricity test’, calculated as electricity consumption divided by GVA, to award discounts to those businesses it deems most response to a change in electricity price:  

• For manufacturing frontier industries, only SIC codes with electricity intensity over 0.9% will be eligible 
• For manufacturing foundational industries, only SIC codes with electricity intensity over 2.7% will be eligible  

To determine the value of the exemption, a ratio will be taken of a businesses’ import Metering Point Administration Numbers and evidence of the proportion of electricity consumed at the site which relates to manufacturing of a product on the HS code list. Businesses will need to provide this information themselves. Exemptions are as follows: 

• If less than 25% of electricity usage at the site relates to eligible manufacturing, no exemption is awarded.
• If between 25% and 50% of electricity usage at the site relates to eligible manufacturing, a 50% exemption from the relevant levy costs is applied to all import MPANs on the site.

If 50% or more of electricity usage at the site relates to eligible manufacturing, a 100% exemption from the relevant levy costs is applied to all import MPANs on the site. 

To prevent the exemptions from the Renewables Obligation (RO), Feed-in Tariffs (FiT) and the Capacity Market (CM) that fund BICS from leading to higher bills for non-eligible customers, the Government have announced that the costs will be offset through changes within the energy system. These include the recent changes made to inflation indexation of RO/FiTs (the shift from RPI to CPI), removal of Carbon Price Support from April 2028 and Government funding via Treasury. 

techUK analysis 

techUK is glad that BICS will not lead to even higher bills on digital infrastructure providers. Similarly, we welcome the proposed abolition of Carbon Price Support (CPS), which was a tax imposed on fossil-fuel powered electricity aimed at phasing out  coal from the UK energy system. Given this phase-out is now complete, the  CPS had become a superfluous additional cost for businesses and a structural barrier to electrification. 

Digital infrastructure, such as data centres and telecoms networks, underpins the digital transformation of the UK economy – supporting IS-8 sectors such as frontier manufacturing. However, while techUK is disappointed that digital infrastructure has not been included in the BICS scheme despite its importance in the whole UK economy, we would prefer the BICS scheme not exist in its current form at all. Rather than piecemeal exemptions, we would advocate the removal of all levies from all electricity bills – moving them instead to general taxation, as the Government has already done to some extent for domestic bills in the Autumn Budget. 

We are also concerned that the Government’s announcement, namely their offsetting of the cost of BICS, reveals they could have chosen to reduce bills for all UK energy customers, and instead chose to pick which businesses would receive additional support. This is despite the costs of energy being high across the UK economy. Instead, the UK needs long-term, structural reform to reduce perennially high energy costs for everybody, irrespective of sector or operation, that have plagued the economy for far too long. 

The Government apparently recognise this when, in their response, they claim that: ‘The government also recognises wider concerns about longer-term electricity costs and the underlying structural issues driving high electricity prices. While BICS is in operation, the government will continue to review the role that the scheme plays in the context of broader industrial energy interventions, with the aim of ensuring that businesses receive reliable support until wider changes in the energy system bring prices down for all consumers.’ We see moving levies to general taxation as the simplest, most effective way to achieve this aim and are committed to working with the Government to find solutions that will deliver economy-wide benefits.  

If you would like to know more about our energy policy work, please contact katie.davies@techuk.org