Who is eligible for EII exemptions?

This article was originally written in 2018 and updated in August 2026.

Businesses in energy-intensive industries can claim exemption from certain charges on their energy bills. Here’s what you need to know.

The typical business energy bill includes a number of charges that help to pay for power generation and infrastructure. Some sectors with heavy energy use would struggle to pay these charges and stay competitive, so businesses that meet certain criteria are granted exemption from some charges. It’s one of the ways in which the government supports energy-intensive industries to keep the UK competitive.

Energy-intensive industry (EII) exemptions only apply in England, Scotland and Wales. Northern Ireland has a separate system.

You need an EII certificate to receive the exemptions. The process of applying for an EII certificate involves two tests for your business.

The sector-level test

Your business must show that it operates within an eligible sector of the economy. The UK government classifies sectors using a European industry standard system that’s usually known as NACE. Under NACE, each type of business activity has its own four-digit code. For example, manufacturing rubber tyres would be 22.11.

The official guidance for EII exemptions has an up-to-date list of which activities qualify and their NACE codes. You need to check that your business is on the eligible list and include the NACE code in your application for an EII certificate.

The business-level test

This is a test of how much your business spends on energy as a proportion of total spending. Your EII certificate application needs to show that electricity costs make up 20% or more of your Gross Value Added (GVA).

The guidance defines GVA as

“earnings before taxes, interest, depreciation and amortisation (EBITDA) excluding items which are extraordinary and all staff costs including employers pension and national insurance contributions, director’s salaries and bonuses, casual or agency staff costs and other arrangements where employees are paid indirectly.”

‘Extraordinary’ means an unusual or infrequent spend – for example, if a freak weather event causes damage the business has to pay for.

Relevant period

The business needs to show accounts for a specific period, the ‘relevant period’.

• For businesses with three or more years of published annual accounts, the relevant period will be the three most recent consecutive years for which annual accounts exist.
• For businesses with just two years of published annual accounts, the relevant period will be those two years.
• If you only have one year’s worth of accounts, the relevant period will be that one year.
• Newer businesses that haven’t published any annual accounts yet can still apply, but you need at least a quarter’s worth of financial data.
• If you have been trading for less than a quarter, you are not yet eligible to apply for an EII certificate.

We explain more about how to apply for an EII certificate in our guide to renewable levies and current exemptions.

Many businesses seek professional advice when they are first applying for EII exemptions. Sustainable Energy First has extensive experience of the process and can guide you through it. So if you think you may benefit from further advice, get in touch for a no-obligation chat using the form below.