The UK Government has confirmed an expansion of the British Industrial Competitiveness Scheme, increasing eligibility from 7,000 to around 10,000 energy-intensive businesses. The scheme is intended to reduce electricity costs by up to 25% through exemptions from policy levies.
The expansion builds on existing measures such as the government’s Supercharger scheme, which provides partial relief on electricity costs for energy-intensive industries.
The announcement comes at a time of renewed pressure on energy prices following instability in the Middle East. Recent data from the Office for National Statistics showed the UK economy grew by 0.5% in February, ahead of expectations, with construction output rising by 1.0%. This suggests parts of the construction and manufacturing base were beginning to see modest growth at the start of the year.
However, this data predates the escalation of the Iran conflict at the end of February, which has since contributed to higher energy costs and a downgrade in the International Monetary Fund's UK growth forecasts. There is now a risk that rising input costs, particularly energy, could slow this early momentum.
While the expansion of the scheme has been welcomed by industry, its timing remains a concern. The scheme will not come into operation until April 2027, when eligible businesses will begin to see reduced electricity costs through exemption from levies.
This means that businesses will continue to face current energy costs in the near term, with no immediate reduction in bills. For many, this delay comes at a time when cost pressures are already affecting pricing, investment decisions, and margins.
For CEA members, the relevance is primarily for energy-intensive manufacturers within the construction equipment supply chain. However, many businesses across the wider sector, including hire companies, distributors, and SMEs, are unlikely to qualify despite facing similar cost pressures.
The delay in implementation means that cost pressures are expected to persist across the supply chain, with potential knock-on effects for equipment pricing, availability, and overall competitiveness.
Viki Bell Chief Executive, CEA (Construction Equipment Association), said:
“The expansion of support to energy-intensive industries is a step in the right direction and reflects the pressures many manufacturers are facing.
However, with the scheme not coming into operation until 2027, businesses are effectively being asked to carry high energy costs for another year before meaningful relief arrives. For many, that is a significant challenge at a time when margins are already under pressure.
Energy costs are not just an issue for a small number of qualifying firms. They are being felt right across the construction equipment supply chain, from manufacturers through to hire companies and SMEs, many of whom fall outside the scope of this support.
Without more immediate measures, there is a real risk that these pressures will continue to influence investment decisions, pricing and competitiveness in the near term. A broader and more timely approach will be needed to support the full industry.”
Further detail published by the Government alongside the response to consultation provides greater clarity on how the scheme will operate in practice. Eligibility will be determined at the sector level using electricity-intensity thresholds, with no requirement for individual businesses to meet a separate test. A defined list of eligible SIC and product codes has also been confirmed, alongside a simplified application process based on electricity use. While this additional detail is helpful, it does not change the overall timeline: support will still not take effect until April 2027, and there will be no immediate reduction in energy costs for businesses.
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