This guide was last updated in May 2026.
Energy costs present a serious challenge for all UK businesses, especially those whose processes require heavy energy use. Our industrial electricity consumers pay more than in any other IEA member country, according to an October 2025 Full Fact analysis. (The UK topped a comparison of 24 countries for industrial energy prices, both including and excluding taxes.)
Government support for EIIs is designed to help businesses stay competitive in the face of these high costs and other challenges, such as carbon pricing.
A significant chunk of a business energy bill is made up of non-commodity costs: charges that are separate from the unit price of the actual energy used. (Our business guide to non-commodity costs explains what they’re for and how they’re calculated.) A lot of the support for EIIs available works wholly or partly by reducing the impact of these charges.
In this guide we’ve outlined what EII support is currently available. There are handy jump links to each section.
British Industrial Competitiveness Scheme (BICS)
This is a central pillar of the government’s Modern Industrial Strategy, launched in June 2025. It will come into force from 2027.
Eligible businesses will no longer have to pay:
- The Renewables Obligation (RO), which is how suppliers pass the cost of buying renewable energy certificates on to businesses.
- Feed-In Tariffs (FiTs), where businesses pay towards the cost of rewarding small generators who signed up to the FiT scheme before it closed in 2019.
- Capacity Market charges, where businesses help to cover the costs of balancing supply and demand in the GB electricity system.
These non-commodity charges account for a significant portion of the typical UK business energy bill, so BICS exemptions could cut electricity bills by up to 25%. The savings will be worth around £35-£40 per MWh of electricity consumed, according to government figures. Total relief is expected to be worth up to £600 million from April 2027.
Scheme details were confirmed in April 2026, including an expansion of firms in scope. More than 10,000 businesses are now expected to qualify, up from the original estimate of 7,000. Support isn’t based on company size, so SMEs will also be eligible.
Some sectors will get a one-off backdated payment in 2027 to reflect the support they would have had if the scheme had started in April 2026.
Current timelines indicate the Renewables Obligation and Feed-in Tariff exemptions will begin in April 2027, while Capacity Market exemptions are expected from October 2027.
A consultation on exactly how the scheme should be delivered closed in May 2026.
Read more in our quick guide to BICS.
British Industry Supercharger (BIS)
The British Industry Supercharger is a set of measures to reduce energy costs for key industries. It was introduced in April 2024.
How the Supercharger works
In the UK, business contribute to the running of the grid and the generation of renewable energy through the non-commodity costs on their bills. The British Industry Supercharger works by allowing businesses to contribute much less. There are two elements:
- Total exemption from levies to support renewable energy. Previous schemes offered exemption of up to 85%, but if you’re eligible for the Supercharger, it’s 100%. It is the first ever government scheme to remove all of these charges.
- Network Charging Compensation (NCC). The extra charges on business energy bills also help to cover the costs of maintaining and running the GB electricity grid. Rather than exempting businesses from this charge, the Supercharger gives them some of it back. As of April 2026, you can be compensated for 90% of your network charge costs. Read more in our NCC section below.
The British Industry Supercharger applies to about 586 businesses in the UK, as of March 2026. You have to hold an EII certificate; see the official guidance and link to apply for an EII certificate
Note: Payments are not made automatically – you need to apply afresh every quarter. For advice on eligibility and applying, get in touch with Sustainable Energy First.
EII – UK ETS Compensation Scheme (UK ETS)
The UK Emissions Trading Scheme (UK ETS) was set up to reduce emissions from high-emitting sectors by imposing a cost on each tonne of carbon emitted. There is a risk that the carbon costs of the UK ETS could give UK businesses a disadvantage against businesses in countries with lower or zero carbon pricing. That’s counterproductive because it could mean UK businesses moving overseas, simply shifting the emissions to a different place rather than reducing them and harming the UK economy in the process.
To address this risk, the government set up the UK ETS Compensation Scheme. If your question isn’t answered in this section, take a look at our in-depth guide to the UK ETS Compensation Scheme.
How much do you get from the UK ETS Compensation Scheme?
The amount you get is based on how much the business spends on paying for the carbon cost of its emissions. As of May 2026, the maximum is either 75% of your total indirect emissions costs, or 1.5% of the company’s Gross Value Added, whichever is the greater. The limit may go down in future; the scheme administrators will notify claimants if it does.
Who qualifies for the UK ETS Compensation Scheme?
To qualify for the scheme your business must be based in the UK and:
- Manufacture a product within an eligible sector;
- Prove that your carbon costs are over a certain proportion of business value (the ‘5% test’).
Check the official guidance for the most up-to-date list of eligible sectors.
The 5% test
The 5% test means showing that indirect carbon costs have been at least 5% of the company’s Gross Value Added (GVA) for the past five years. It doesn’t have to meet that threshold for every year of that period as long as:
- the overall average for the five-year period is above 5%;
- the proportion is over 5% for at least three of those five years.
How do I apply for the UK ETS Compensation Scheme?
The official guidance explains how to apply and gives examples to show how the compensation is calculated.
What if my business carries out a mix of activities?
Some businesses do more than one type of work. Those businesses can still be eligible for UK ETS compensation, but only in relation to the activities that fall within an eligible sector. So you need to know (and show) what proportion of the business’s electricity usage goes on eligible activities.
Ideally you should do this through granular measurement of energy consumption, broken down by different areas of the business. At Sustainable Energy First, we advise clients on using sub-metering to make your energy use calculations more specific and useful.
The MinMet Exemption
Some types of energy are exempt from the main rates of the Climate Change Levy, such as energy for domestic use and energy used in certain forms of transport. The CCL exemption that’s relevant to energy-intensive industries is the Mineralogical and Metallurgical Exemption, often shortened to MinMet.
The Mineralogical and Metallurgical Exemption applies to many industrial processes, including but not limited to:
- Flat glass manufacturing
- Brick making
- Cement manufacture
- Aluminum production
- Lead, zinc, tin and copper production
A full list is available as part of the government guidance.
This isn’t the same as a Climate Change Agreement because the business doesn’t need to make a plan for reducing energy use. You just need to be in an eligible sector and make an official claim for relief on the CCL. Sustainable Energy First has experience supporting our clients through the process of making a CCL exemption claim.
Climate Change Agreements (CCAs)
Businesses in the industrial, commercial, agricultural, and public sectors normally get a charge on their bills called the Climate Change Levy (CCL). When a business makes a Climate Change Agreement (CCA), it agrees to reduce energy use and associated emissions in exchange for getting a discount on this levy. As of May 2026, 54 different sectors are part of the CCA scheme.
The current version of the CCA scheme is being treated as completely new rather than as a continuation of the old scheme. So if your business had a CCA in the past, you won’t be automatically transferred – you will need to make a fresh application.
For more information, read our guide to the current CCA scheme.
Questions?
Sustainable Energy First supports many energy intensive businesses to identify and secure the EII support they are eligible for, as well as strategies for reducing overall energy costs. If you have any questions on this guide or need further advice, get in touch with our team via the form below.
If you’d like more information on any of the mentioned EII funding, please get in touch for a no-obligation chat with our experts at Sustainable Energy First.
