This guide was reviewed and updated in August 2025.
UK electricity prices are among the highest in the developed world. A Drax Group report for the last quarter of 2024 found that UK industry is spending 60% more per unit of electricity than any other European nation. That’s a big challenge for businesses whose processes require heavy energy use.
A 2021 Ofgem report on why GB electricity prices are so high found that energy-intensive industries (EII) in the UK are diverse in nature. “Each EII is different…and they each face their own challenges, whether it be rising input costs or increasing international competition.”
The UK government wants EII businesses to remain competitive in the face of high energy costs and other challenges such as carbon pricing. So it has put several forms of support in place for energy intensive businesses. We’ve outlined them below, with handy jump links to each section.
British Industrial Competitiveness Scheme
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.
We don’t yet know exactly how many businesses will qualify for the scheme. As we write in August 2025, a consultation about eligibility is set to open soon. We do know that the government expects the number of businesses in scope to be over 7,000.
British Industry Supercharger
The British Industry Supercharger is a set of measures to reduce energy costs for key industries. The previous government introduced it in April 2024 with the estimate that it would save EIIs between £320 and £410 million in 2025.
The Supercharger applies to around 370 businesses in the UK. You have to hold a valid EII certificate issued by the Department for Business and Trade. Those businesses get:
- Total exemption from levies to support renewable energy;
- Network Charging Compensation to make energy cheaper.
All business energy bills contain charges to support the generation of renewable energy in the UK. Previous schemes have offered energy-intensive businesses up to 85% off the costs of these. The British Industry Supercharger is the first government scheme to let businesses off all these charges.
Network Charging Compensation means that eligible businesses get some money back from the costs of using the grid. All industrial users pay a levy on their bill to help cover the costs of maintaining and running the GB electricity grid, such as Transmission Network Use of System charges. Network Charging Compensation means that businesses eligible for the Supercharger can claim 60% of these charges back.
This part of the Supercharger scheme has been in place since May 2025. If your business is one of the few hundred eligible for the Supercharger, you need to register for Network Charging Compensation through an online portal. See below for more information about who qualifies and how to apply.
EII Network Charging Cost Compensation (NCC)
As you’ve read, all industrial energy users pay a levy on their bill towards the costs of the electricity grid. This money goes towards building, maintaining, running and upgrading the GB electricity networks. Ofgem sets the price that the network companies can charge suppliers, then the suppliers pass the cost on to customers in the form of extra levies on their bills.
If you’re an energy-intensive business, these charges will be substantial. The NCC was created to offset some of these costs to EII businesses. You can get compensation for up to 60% of your network charges.
Who is eligible for Network Charging Cost Compensation?
Any business with an EII certificate may apply for an NCC payment as long as it has held the certificate for a whole month.
How do I apply for NCC?
The scheme is administered by Elexon. You need to register for the scheme online through the NCC Portal. Payments are not made automatically – you need to apply afresh every quarter.
You have to make each quarterly application in a specific month-long window.
- For the period July, August and September 2025, the application window is 30 September to 31 October 2025.
- For October, November and December 2025, the window is 31 December 2025 to 31 January 2026.
It then takes almost a year for your compensation to come through. This is partly to allow time for corrections and partly because Elexon first needs to invoice suppliers for the money. Elexon has published a payment schedule so you know when to expect your compensation. There’s also guidance to help you with applying.
EII – UK ETS Compensation Scheme
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.
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 August 2025, the limit 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.
For more information, take a look at our in-depth guide to the UK ETS Compensation Scheme.
Climate Change Agreements
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.
The government has introduced a number of changes to the scheme and the next phase of the CCA is being treated as completely new rather than as an extension of the existing one. That means that businesses who have already been part of the scheme in the past will need to apply again and get their eligibility reassessed.
New entrants to the scheme will be able to join from 1 January to 31 August each year during the scheme. An additional application window is open now – from 1 May to 31 August 2025.
For more information read our guide to the new CCA scheme.
This guide was updated by Sustainable Energy First’s EII team in August 2025. If you’d like to know more about these schemes and how you can benefit, get in touch for advice.
EII Renewables Levy Compensation Scheme
This scheme helps energy-intensive businesses with the costs of their energy by allowing them to avoid extra charges on their bills. As you’ve read, most business electricity bills have additional charges that help to fund the generation and delivery of energy, especially green energy. The EII Renewables Levy Compensation Scheme gives businesses relief on charges that pay for four projects:
• Contracts for Difference (CFD)
• Renewables Obligation (RO)
• Small-Scale Feed-In Tariffs (FIT)
• The costs of running the Capacity Market (CM)
So the EII Renewables Compensation Scheme isn’t so much a single scheme as a way to get exemption from contributing to several different key projects. The forthcoming British Industrial Competitiveness Scheme (explained above) is very similar in scope. It’s likely that the EII Renewables Compensation Scheme will be retired once the British Industrial Competitiveness Scheme goes live in 2027, because they cover so much of the same ground. For more information in the meantime, check out our dedicated guide to the EII Renewables Levy Compensation Scheme.
If you’d like more information any of the mentioned EII funding, please get in touch for a no-obligation chat with our experts at Sustainable Energy First.
