For energy-intensive businesses, 2026 brings a challenging cycle of charges and relief through the EII (Energy Intensive Industries Support Levy) and BICS (British Industrial Competitiveness Scheme). Let’s explore what they both mean for manufacturers and other businesses.
First off, some context: the EII Support Levy is a non-commodity charge that came into effect in April 2025 and is paid for upfront, while the more recent BICS Relief, due to go into effect in April 2027, will offset the charge after the fact.
Here we will explore the crux of the EII Support Levy, also known as the Network Charging Compensation (NCC) Charge and BICS Relief, explain the impact on energy-intensive organisations, and explore practical strategies to help manage crucial timing.
What is the EII Support Levy?
The EII is a critical part of the UK government’s strategy to reduce electricity costs for heavy industry. It is an added charge on electricity bills intended to fund relief for businesses that use a lot of energy, so they can stay competitive. Industries such as steel, chemicals, paper and heavy manufacturing have much higher electricity costs than international competitors, so this levy helps the UK remain competitive in these sectors.
Related reading: A Complete Guide to Business Energy Audits in 2026
Who Pays the EII Support Levy?
From a business perspective, the EII Support Levy is charged to most UK non-domestic energy users, including energy-intensive users such as manufacturers, hotels, care homes, and large facilities.
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What Is BICS Relief?
The British Industrial Competitiveness Scheme (BICS) is a UK-Government energy initiative due to take effect from April 2027 and run until 2035. It aims to help eligible businesses recoup the non-commodity charge of the EII Levy.
Understanding BICS Relief and How It Offsets the EII Levy
For businesses in Energy Intensive Industries (EIIs), the British Industry Supercharger (BICS) programme is a key financial mechanism to help balance electricity costs. BICS Relief aims to offset the costs of the EII Support Levy and other policy charges, so that high-energy businesses aren’t paying over the odds to compete in energy-intensive sectors.
As previously mentioned, this works by eligible businesses paying the levies upfront and later recouping the costs by reducing the amount businesses pay through network charges or applying direct rebates, which offset overall electricity costs.
This means that although businesses take the financial hit at first, the costs are later partially or fully refunded to offset the costs of government policy over time.
This pattern will create a financial “slump” during the period after the levy is paid but has not yet been refunded; this gap can negatively impact cash flow. Therefore, careful budgeting and planning are advised to ensure that businesses do not put their operations at risk.
At a Glance: Who Pays EII Levy and Who Gets Relief
Almost all UK businesses will see the EII Support Levy on their energy bill, but only some will recoup that cost through BICS. Only qualifying high-energy users, ones that are officially approved as Energy Intensive Industries (EIIs), can get that money back through BICS relief.
| Item | What It Is | Who Pays/ Receives | Timing in 2026 | Impact of Policy |
| EII Support Levy | A small charge on electricity bills that funds relief for energy-intensive businesses. | Most electricity users (all businesses paying electricity bills contribute). | Appears upfront on electricity bills, typically monthly or quarterly. | Businesses contribute to the pot that will fund BICS relief for eligible EIIs. |
| BICS Relief | Exemption/rebate from certain policy costs under the Energy Intensive Industries (EII) scheme. | Only qualifying high-energy users with an EII Exemption Certificate. | Applied later in the year via electricity suppliers (timing varies by contract; often quarterly or annually after verification). | Reduces policy-related costs (RO, FiTs, CfD, Capacity Market) for qualifying businesses, offsetting part of the levy they “funded.” |
BICS Timing and Financial Planning
As the EII Support Levy is paid up front, it contributes to your outgoings, which can make a business’s costs seem higher and its cash flow tighter. Even with annual planning, cash flow can still matter to many businesses month to month.
Therefore, considerate planning is key to smooth cash flow during the time before the BICS Relief payment; some may even find certain aspects advantageous to schedule in for this time.
For example, when planning ahead of time with the EII Levy charge in mind, businesses can:
- Schedule significant operations for the period after BICS relief to help with cash flow.
- Plan for procurement or energy contracts after the BICS to take advantage of lower effective costs after relief is received.
- Generally, forecast cash flow more accurately, reducing potential funding risks.
Even though the annual costs are similar, depending on the rebate your business is eligible for, planning for the EII Levy and subsequent BICS payment can still help monthly finances.
If businesses plan some of their more energy-intensive operations after the BICS relief, they might also want to consider conducting a general energy audit at that time. Doing this while systems are under the most stress gives expert energy consultants the opportunity to provide the most accurate data on potential efficiencies.
Find out how we can help reduce your business’s energy costs with our expert energy audits.
What Type of Businesses Get Full or Partial BICS Relief?
Different types of businesses will be eligible for various amounts of BICS relief from the EII Support Levy. This chart helps break that down:
| Relief Type | Business Type | Potential BICS Support Level | Timing of Relief | Strategic Considerations |
| Full Relief | Exclusively manufactures IS-8 or other eligible products. | 100% exemption from policy costs. | Applied after the initial levy is billed (often quarterly or annually). | Can plan major energy-intensive operations after relief is applied to maximise cash flow. Full benefit available without pro-rating. |
| Partial Relief | Manufactures a mix of eligible and ineligible products. | Pro-rated exemption based on the proportion of the eligible production. | Relief applied after initial levy; amount depends on the eligible proportion. | Consider segregating production or adjusting scheduling to maximise eligible energy use during relief periods. Align procurement contracts with relief timing. |
| Already Eligible via EII/Supercharger | Businesses that already qualify under EII / Supercharger schemes. | Typically ineligible for additional BICS relief. | N/A — relief already embedded through the EII scheme. | Ensure ongoing compliance to maintain EII status. Focus on network or operational efficiency to reduce overall energy costs. |
| Ineligible / Should Use EII | Businesses that do not meet BICS eligibility. | None | N/A — must apply for EII if applicable. | Explore if qualifying for EII exemption is possible. Even if BICS doesn’t apply, energy audits, load shifting, or procurement strategies can reduce net costs. |
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