For UK manufacturers considering how best to reduce electricity cost exposure, the launch of the British Industrial Competitiveness Scheme (BICS) introduces a decision that did not exist before. Businesses already benefiting from the Energy Intensive Industries (EII) exemption now need to compare the two schemes and decide which will deliver greater value.
The decision matters because exemptions cannot be duplicated. Businesses cannot claim BICS relief on top of EII relief; they need to choose. This piece sets out how the two schemes compare, and how to approach the decision in practice. BICS applications are expected to open in October 2026, so working through the comparison ahead of that window is the sensible position.
What Each Scheme Does
Both BICS and EII aim to reduce the impact of indirect policy costs on the electricity bills of qualifying UK businesses. Both provide exemptions from the costs associated with the Renewables Obligation, the Feed-in Tariff and the Capacity Market. These are policy-funded charges added to commercial electricity bills, and for businesses with significant electricity use, they add up materially.
EII is the longer-established scheme, having supported energy-intensive UK manufacturers for several years. BICS is new, designed to extend similar cost relief to a broader range of manufacturers whose activity fits within priority industrial sectors.
Eligibility Differences
The eligibility criteria for the two schemes are distinct. EII eligibility is determined primarily by electricity intensity, with businesses needing to demonstrate that a defined proportion of their gross value added is spent on electricity. It has traditionally been aimed at the most energy-intensive industries in the UK.
BICS takes a different approach. Rather than relying on an economy-wide intensity test, it targets specific sectors identified as strategically important through the IS-8 frontier industries and a set of qualifying foundational industries. Sector and product classification via SIC and HS codes is the primary route into the scheme, with site-level electricity use then determining the exemption band awarded.
The practical implication is that some businesses will find they qualify for one scheme but not the other, some will find they qualify for both and need to choose, and some will find neither is a fit.
Comparing the Value
Both schemes reduce the same underlying policy costs, so the comparison comes down to two questions: what proportion of those costs each scheme exempts, and what proportion of the business’s electricity use qualifies at each site.
Under BICS, discounts are expected to be worth up to £35 to £40 per MWh, with banded exemption levels reflecting the proportion of eligible manufacturing activity at each site. Businesses whose electricity use is heavily tied to eligible activity qualify for the higher bands; businesses where eligible activity is a smaller share qualify for lower bands.
Under EII, exemption levels are similarly banded and depend on the business’s specific classification. The direct comparison of value therefore depends on the business’s particular sector, activity mix and site-level electricity use. A fair comparison cannot be made on published headline figures alone; it requires modelling both schemes against the business’s own consumption data.
Application and Evidence Differences
The evidence required for BICS is site-level. It focuses on demonstrating the proportion of electricity use at each site that is tied to eligible manufacturing activity, supported by classification against SIC and HS codes.
EII applications require detailed evidence around electricity intensity relative to gross value added, and are subject to their own reporting cycle. Businesses already through the EII process will have much of the underlying data infrastructure in place; businesses new to either scheme are starting from a similar position.
Not sure whether BICS applies to your business?
Eligibility depends on your SIC code, your sector classification and your site level electricity intensity, and the detail is more involved than the headline savings suggest. The application window opens later this year, so it is worth checking your position now rather than waiting.
Ash Williams, our Sustainable Business Solutions Manager, can talk you through where you stand.
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When BICS May Be the Stronger Choice
BICS is likely to be more appropriate for manufacturers whose activity clearly sits within the IS-8 frontier industries or the qualifying foundational industries, but who do not meet the electricity intensity threshold for EII.
It is also likely to be more attractive to businesses where a high proportion of site-level electricity is tied to eligible manufacturing activity, positioning them for the higher bands. For businesses that have found EII qualification borderline or difficult to sustain, the more sector-defined route into BICS may prove simpler.
When EII May Remain the Right Choice
EII may remain the stronger option for businesses that have clearly established electricity intensity, particularly where the value delivered under EII is already substantial and the business’s activity may not qualify at high BICS bands.
Because switching between schemes is a deliberate decision rather than an easily reversed one, choosing carefully at the outset matters more than choosing quickly.
How to Make the Assessment
The right assessment involves modelling both schemes against the business’s actual consumption data, sector classification and activity mix, then comparing projected relief over a defined period.
Where the answer is close, additional factors such as evidence burden, application timing and ongoing compliance requirements become relevant. For most businesses, the decision benefits from external input, particularly where there is history with EII and a need to model potential BICS value against known EII outcomes.
BICS does not replace EII, and EII does not close because BICS opens. Both schemes will continue in parallel, but each business needs to choose which delivers the stronger position for its own operation.
For manufacturers currently in EII, the arrival of BICS is not a threat; it is a decision. The businesses that make that decision on evidence rather than assumption will be the ones best placed to secure the exemption that fits.
Comparing BICS and EII for Your Business
Our BICS calculator provides an initial view of potential BICS eligibility and savings in two minutes.
For a full comparison of BICS against your existing EII position, including banding analysis and evidence review, book a BICS eligibility review to discuss your position with our team.
With over 35 years of experience across EII, CCA and other UK exemption schemes, the comparison is one we deliver regularly.
Frequently Asked Questions
Can We Claim BICS Alongside EII?
No. Exemptions cannot be duplicated. Businesses already benefiting from EII need to assess which scheme delivers the greater value before applying for BICS. The two schemes cannot run in parallel for the same business.
Which Is More Valuable, BICS or EII?
There is no single answer. Both schemes reduce the same underlying policy costs but do so through different eligibility routes and banding structures.
The comparison depends on each business’s specific sector, activity mix and site-level electricity use, and it needs to be made through structured modelling rather than a comparison of headline figures.
If We Already Have EII, Do We Need to Consider BICS?
Yes. Even businesses with a strong EII position benefit from making an active comparison, because BICS may deliver stronger long-term value depending on how site-level electricity use fits with the scheme’s bandings.
Making the comparison ahead of the BICS application window avoids being locked into a decision by default.
Are the Underlying Charges the Same for Both Schemes?
Yes. Both schemes exempt qualifying businesses from a portion of the indirect costs associated with the Renewables Obligation, the Feed-in Tariff and the Capacity Market.
The difference lies in the eligibility route into the scheme, the exemption banding, and how relief is calculated and applied.
Is Switching from EII to BICS Straightforward?
Switching is a deliberate decision that involves ending one exemption position and applying under a different scheme’s criteria.
It is not a routine administrative change, and the choice benefits from a full comparison of projected value before the switch is made rather than after.