More UK businesses are set to receive support with rising energy costs, after the Government confirmed it will expand a scheme first outlined in 2025.
Around 10,000 energy-intensive manufacturers, including firms in steel, automotive and pharmaceuticals, could see electricity bills reduced by up to 25%. The original plan covered 7,000 companies, meaning a further 3,000 have now been brought into scope.
The expanded British Industrial Competitiveness Scheme (BICS) is intended to ease pressure from volatile oil and gas prices, which recently surged amid geopolitical tensions. While prices have since eased, energy costs remain significantly higher than those faced by competitors in Europe and the US.
From April 2027, eligible businesses will be exempt from certain electricity charges linked to net zero policies, saving an estimated £35 to £40 per megawatt hour. A one-off payment will also be made in 2027 to compensate firms for support they would have received from April 2026.
The scheme is expected to cost £600 million and will be funded through wider energy system changes and Government spending, with no impact on household bills. Businesses will be able to check eligibility using their Standard Industrial Classification (SIC) code.
Business groups have broadly welcomed the move, although some argue it does not go far enough. Critics, including opposition figures, point out that sectors such as hospitality, retail and agriculture remain excluded, despite ongoing cost pressures.
Industry bodies continue to warn that high energy prices are a widespread challenge, with four in ten UK businesses still struggling to manage their bills.