RTFA has responded to a Department for Business and Trade (DBT) consultation on eligibility and approach for the British Industry Competitiveness Scheme (BICS). Similar to the British Industry Supercharger (BIS), the BICS aims to reduce electricity costs for manufacturing frontier industries within the Industrial Strategy’s growth sectors (the ‘IS-8’), and manufacturing foundational industries which provide important inputs to the frontier industries, who meet a certain threshold of electricity intensity.
The high cost of industrial electricity in the UK is a major obstacle for RTFA’s advanced low-carbon fuels (LCF) projects developers, which are highly electricity-intensive and include companies active in the nascent (but strategically-important) power-to-X (PtX) sector.
In our response, RTFA makes the following key points:
– Whilst most advanced LCF producers are likely to meet the electricity-intensity standard for BICS, the level of support as proposed is insufficient for many advanced LCFs including PtX. These projects require the additional support offered by the BIS.
– Mapping HS codes to frontier industries’ SIC codes on its own is not a suitable methodology for determining if advanced LCF projects are eligible for BICS. The codes are insufficiently detailed and at a higher level, inappropriately broad.
– If the HS and SIC codes methodology is used generally, there needs to be an additional means of qualifying (eg a positive list of industries / products).
– The electricity intensity test should be designed as a clear formula which captures all relevant criteria.
– A mechanism whereby an in-principle decision of project eligibility based on estimated electricity use / production costs should be included in both BICS and BIS (as opposed to the present BIS requirement to demonstrate actual electricity usage, which precludes projects in development and acts as a deterrent for investment).
