How Will the Industrial Support Scheme Affect UK Businesses?

Renew and Sustain

Updated: 20th January 2026

The Industrial Support Scheme UK is a new government initiative designed to reduce energy costs for over 7,000 energy-intensive businesses. As part of the wider UK industrial energy scheme, it promises up to £2 billion in targeted relief through levy exemptions, grid access reforms, and targeted regional investment.

Set to launch in 2027, the scheme forms a key pillar of the British Industrial Strategy. It aims to drive industrial decarbonisation, improve productivity, and provide long-term government support for industrial energy costs, especially in manufacturing-heavy sectors like steel, ceramics, and chemicals.

If your business has been squeezed by high electricity bills, you’re looking for support for energy-intensive industries, or wondering what business energy relief schemes will be available over the next few years, this policy marks a significant shift in how the UK subsidises and supports industrial energy use.

This new policy could change the game.

What Is the Industrial Support Scheme in the UK?

The Industrial Support Scheme UK, formally named the British Industrial Competitiveness Scheme, is a government programme designed to cut electricity costs for more than 7,000 energy‑intensive manufacturers. It sits at the centre of the new UK industrial energy scheme, and its purpose is simple. Reduce operating costs. Strengthen industrial regions. Support long‑term cleaner production.

Starting in 2027, the scheme will remove or reduce a range of green levies that currently inflate electricity bills. It will also expand existing business energy relief schemes, including the British Industry Supercharger, which already supports sectors like steel, ceramics, glass, chemicals, automotive, and aerospace.

So, what does the Industrial Support Scheme aim to achieve?

Lower electricity costs for qualifying businesses through levy exemptions and enhanced network charge reductions.
Provide government support for industrial energy costs in regions that have struggled with competitiveness.
Accelerate industrial decarbonisation by improving the economics of low-carbon production.
Strengthen the UK manufacturing base as part of a wider ten-year industrial strategy.

The scheme is designed to give UK manufacturers a genuine competitive advantage, especially those operating in global markets where energy costs dictate margins. It creates a clearer path for businesses looking for industrial decarbonisation support in the UK, while offering relief that’s substantial enough to shift long-term investment decisions.

If you’ve been watching energy prices erode profitability, this is the first large-scale intervention in years designed to alter that trajectory.

Who Qualifies for the UK Industrial Support Scheme?

The Industrial Support Scheme is designed for energy-intensive industries that face high electricity costs and global market pressures. It’s designed to support sectors that are both strategically important to the UK and vulnerable to rising energy prices.

While the full eligibility criteria are still under government consultation, the scheme is expected to prioritise:

Steel and metal processing
Automotive and aerospace manufacturing
Ceramics, glass, and chemical production
Pulp, paper, and plastics
Food and drink processing.

If your business already receives support through schemes like the Energy Intensive Industries (EII) exemption or the British Industry Supercharger, you’re likely to be in scope for this new industrial energy support scheme for UK businesses.

The scheme is part of a broader push for government support for industrial energy costs and includes potential UK business energy subsidies that could reduce electricity bills by as much as 25%. A detailed list of qualifying sectors, along with the application process, is expected in early 2026.

If you’re unsure whether your site qualifies or how to prepare for the rollout, Renew & Sustain can help assess your eligibility and plan your next steps.

How Will It Affect Business Energy Costs?

Electricity bills for eligible companies could drop by as much as 25%. The cuts will come from a mix of:

Exemption from specific green levies (like Contracts for Difference and Renewables Obligation)
Increased discounts on network charges
Potential access to reserved grid capacity for strategic projects.

As a result, UK firms may begin to close the price gap with European competitors. For example, current average electricity costs for UK steelmakers sit around £66/MWh, compared to £50/MWh in Germany and £43/MWh in France.

What Energy Relief Schemes Are Being Extended?

The Industrial Support Scheme UK builds on existing government measures designed to lower energy costs for energy-intensive industries. Rather than starting from zero, this new scheme expands current business energy relief schemes and streamlines support through a single, coordinated policy.

Understanding these overlapping mechanisms can help businesses prepare for what’s next and position themselves to access the most effective government support for industrial energy costs.

Here are the three core schemes being extended or integrated.

British Industry Supercharger: Boosted Discounts for Energy-Intensive Users

The British Industry Supercharger is a current energy relief scheme designed to lower costs for some of the UK’s most energy-intensive sectors, including steel, ceramics, glass, and chemicals. It will be extended under the new industrial strategy, and made more generous:

100% exemption from key green levies, such as Contracts for Difference and the Renewables Obligation
Increased network charge relief, rising from 60% to 90%
Support for around 500 qualifying businesses, helping them stay globally competitive in the face of rising UK industrial electricity prices.

If your business already benefits from the Supercharger, the Industrial Support Scheme could mean even greater savings and longer-term stability.

Industrial Strategy Zones: Simplified Incentives, Bigger Opportunities

As part of the wider UK industrial strategy, the government is consolidating three overlapping incentive areas: freeports, investment zones, and enterprise zones, into a single, streamlined framework: Industrial Strategy Zones.

These newly structured zones will offer:

Capital allowances for plant, machinery, and decarbonisation upgrades
Business rates relief for qualifying facilities
Fast-track planning and infrastructure development support
Clearer, more accessible access to industrial energy support schemes.

This update is particularly relevant for regional energy users, manufacturers considering site expansion, and companies seeking to qualify for low-carbon industrial support under other schemes, such as the Industrial Energy Transformation Fund (IETF).

Grid Connection Reform: Faster Access for Strategic Projects

The government has also announced the Connections Accelerator Service, a new programme to help industrial businesses access grid capacity faster. This responds to years of backlog, where energy-intensive projects were stalled due to connection delays.

Key features:

Grid access prioritised for strategic industrial projects
Integrated with planning reforms in the Infrastructure Bill
Aimed at reducing wait times for on-site generation and electrification upgrades

This could be a significant enabler for businesses pursuing decarbonisation, battery storage, or electrification of heat and processes. If your energy strategy includes on-site generation or a move away from fossil fuels, this reform could be the missing link.

Together, these enhanced schemes form part of a wider government push to reduce electricity costs, accelerate the net-zero transition, and boost industrial resilience across the UK.

If you’re looking to understand which business energy subsidies your company might qualify for, or how to future-proof your electricity costs, now’s the time to act.

Ready to Find Out What Relief Your Business Could Access?

If your business operates in a high-energy sector, these schemes could unlock serious savings, but only if you’re positioned to take advantage.

Our team will help you:

Identify eligibility across multiple support schemes
Optimise your energy procurement to capture full savings
Plan infrastructure upgrades that align with grid reforms
Understand how the Industrial Support Scheme UK could reduce your long-term costs.

Get a clear strategy and expert guidance, all in one call.

Find Out What Support You Could Unlock

Is There Funding for Industrial Decarbonisation?

Yes. The strategy also works in conjunction with existing schemes, such as the Industrial Energy Transformation Fund (IETF), which supports site-level decarbonisation upgrades. Businesses may be able to stack funding across multiple schemes, depending on their investment plans.

If your business is pursuing low-carbon technology, electrification, or process efficiency, this is the time to act. Early alignment with industrial strategy objectives is likely to enhance access to both relief and funding.

What Does This Mean for Non-Eligible Businesses?

While the scheme targets high-energy sectors, many others, including retail, logistics, and hospitality, are still grappling with rising energy costs and increasing non-commodity charges.

If you’re not eligible for government support, your energy strategy matters more than ever. The right combination of the following can all help level the playing field:

Smart contract selection
Optimised energy procurement timing
On-site generation planning
Submetering and consumption insights.

How Can Businesses Prepare?

The scheme is still in development, but early preparation is essential. We recommend:

Reviewing your energy profile and comparing it against known eligibility indicators
Identifying sites with the highest potential cost savings
Tracking government updates as criteria and timelines are confirmed
Exploring energy procurement strategies that align with upcoming support.

Working with an energy consultant can help you assess your options, act early, and integrate this support into your long-term energy cost planning.

Common Questions About the Industrial Support Scheme

If your business relies heavily on electricity, understanding how the new Industrial Support Scheme UK works could help you unlock significant savings. Here are answers to some of the most frequently asked questions.

What Sectors Benefit from the Industrial Energy Support Scheme?

The scheme targets sectors with high electricity consumption and exposure to global competition. These include:

Steel and metal processing
Automotive and aerospace manufacturing
Ceramics, glass, and chemical production
Pulp, paper, plastics, and food processing.

Any business operating in these or related industries may qualify for relief.

How Does the UK Government Help Energy-Intensive Businesses?

The UK government provides industrial energy relief through several overlapping schemes, including the British Industry Supercharger, Emissions Trading Scheme exemptions, and the upcoming Industrial Support Scheme. These programmes reduce green levies, cut network charges, and offer capital allowances to lower electricity bills and support industrial growth.

Is My Business Eligible for Industrial Energy Relief?

Eligibility will depend on the sector, energy usage intensity, and existing participation in schemes such as the Energy Intensive Industries (EII) exemption. A professional consultation will define full eligibility criteria in 2026, ahead of the scheme’s 2027 launch.

What Funding Is Available for Industrial Energy Efficiency in the UK?

In addition to energy cost exemptions, businesses may also be eligible for funding through the Industrial Energy Transformation Fund (IETF). It supports low-carbon technology upgrades, energy efficiency improvements, and infrastructure projects that reduce emissions and lower long-term consumption.

When Will the Industrial Support Scheme Start?

The scheme is expected to begin in 2027, following the consultation and finalisation of eligibility rules. Now’s the time to review your site’s energy profile and prepare to apply when the application window opens.

Get Ahead of the Curve

If your business relies on electricity-intensive operations, the Industrial Support Scheme could deliver significant cost relief in the years ahead. But the key is being ready, with a strategy that leverages support while optimising what you control today.

At Renew & Sustain, we help UK businesses assess their eligibility, forecast savings, and align procurement and efficiency plans with government support.

Let’s explore how this scheme could support your growth.

Sources and References

Financial Times. Energy prices to be cut for businesses as part of UK industrial strategy
UK Government. British Industry Supercharger: Government support for energy-intensive industries.
Ofgem. Industry Charges (Electricity Distribution Charges and Network Costs)
House of Commons Library. Government support for business energy costs
Office for Budget Responsibility (OBR). Economic and Fiscal Outlook — November 2025
Make UK. UK Industrial Electricity Prices Compared to Europe.