Draft Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026
I beg to move, That the Committee has considered the draft Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026. It is a pleasure to serve under your chairmanship, Mr Dowd. The draft regulations were laid before the House on 7 September 2026. I acknowledge the Joint Committee on Statutory Instruments, which provided helpful scrutiny of the regulations and did not draw them to the special attention of the House. I also acknowledge that the Secondary Legislation Scrutiny Committee reported on the regulations and did not draw them to the special attention of the House. These regulations deliver the British industrial competitiveness scheme, which is a flagship commitment of the modern industrial strategy. BICS is a central part of our drive to engineer the reindustrialisation of the UK. Reindustrialisation means building on the strengths of every part of our country, creating good jobs and connecting communities to the industries and opportunities of the future. BICS will address the persistent competitiveness challenges facing British manufacturers by reducing electricity costs for eligible businesses. It will drive investment and economic growth in strategically important sectors across Great Britain. BICS will support frontier manufacturing industries within the IS-8 sectors and the foundational manufacturing industries that provide key inputs to their supply chains. This includes eligible businesses in automotive, aerospace, clean energy, life sciences, chemicals and steel, and many more. The Government are committed to maintaining a competitive and resilient industrial base, but persistently high energy prices, especially electricity prices, have increasingly undermined investment, productivity and employment, particularly in manufacturing. For too long, British industries have faced some of the highest industrial electricity prices in Europe due to a combination of structural factors and policy costs. There is a need to address the immediate cost pressures that are facing the British manufacturing industry and stifling growth, which is precisely why BICS has been introduced. BICS will exempt eligible manufacturing businesses from paying the indirect costs of the renewables obligation and feed-in tariffs from April 2027 and capacity market costs from October 2027. These costs are levied on electricity suppliers, which pass them on to domestic <span id="4" class="column-number" data-column-number="4"></span>and non-domestic consumers through their electricity bills. BICS is expected to cut electricity costs by up to 25%, or £40 per megawatt-hour, and over 10,000 manufacturing businesses will be eligible. The scheme is designed to support manufacturing businesses in high-growth and strategic sectors to be more internationally competitive, and to drive investment and economic growth across all regions of Great Britain. It will spread the benefits of growth across the country, supporting businesses rooted in communities across our regions, with the vast majority being small and medium-sized businesses. The regulations are an important part of delivering that objective. They implement the renewables obligation and capacity market exemptions, and they enable the renewables obligation level for the 2027-28 obligation period to be revised in the light of BICS. They also provide for the BICS eligibility criteria and how the level of discount will be calculated. An instrument to exempt eligible businesses from the indirect costs of the feed-in tariff will also be made. We recognise the tremendous challenges that British manufacturers are facing, and we have heard the call to go further. That is why eligible businesses will also receive an additional payment in 2027 related to the amount they would have received had the scheme gone live this year. BICS will support British manufacturing businesses to thrive and become more competitive on the international market. It will allow them the freedom to invest further in their business and help drive economic growth across Great Britain. I commend these regulations to the Committee.