The UK government recently announced a significant electricity cost reduction for around 10,000 manufacturing businesses, framed as a major boost to industrial competitiveness. For energy-intensive manufacturers, the relief is real and substantial. However, despite facing some of the highest energy costs of any productive sector in the UK economy, horticulture has been left out.
What is the BICS scheme?
The British Industrial Competitiveness Scheme (BICS) was first announced in the government’s 2025 Industrial Strategy and is designed to bring UK industrial electricity prices closer to those paid by global competitors[1]. The headline measure is a reduction in levies applied to electricity bills for eligible Energy Intensive Industries (EIIs). These are the non-commodity costs on top of the wholesale price of electricity that have placed UK industry at a disadvantage compared to primary competitors in Europe and North America.
For qualifying businesses, the relief covers exemptions from the Renewables Obligation, Feed-in Tariffs, and the Capacity Market. The government has indicated these exemptions will reduce electricity costs by between £35 and £40 per megawatt-hour (MWh) for eligible businesses[2], equivalent to a reduction of up to 25% in electricity bills. A recent expansion brings total coverage to around 10,000 manufacturing businesses who will benefit when the scheme takes effect from April 2027.
Why is horticulture excluded?
Eligibility for BICS is determined by Standard Industrial Classification (SIC) codes, so to qualify a business must fall within an eligible SIC code. The qualifying SIC codes are those associated with manufacturing sectors identified in the Industrial Strategy’s eight growth sectors, including automotive, aerospace, chemicals, and steel.
Horticulture is classified under agriculture, specifically the A01 division of the SIC system[3], and agriculture as a whole falls outside the eligibility criteria. Therefore, horticultural businesses do not reach the first stage of SIC code eligibility.
The horticulture industry’s argument is that this classification does not reflect operational reality. A large glasshouse operation producing tomatoes, cucumbers, peppers, or cut flowers year-round is an extraordinarily energy-intensive enterprise. Heating, supplementary LED lighting, CO₂ enrichment, ventilation, and packing operations all consume substantial quantities of electricity and gas.
Industry bodies have cited figures suggesting energy can account for 30 to 40% of variable production costs in heated glasshouse growing[4]. These are energy intensities that would, in many cases, comfortably exceed the thresholds applied to qualifying manufacturers, if horticulture were permitted to demonstrate them.
A sector already under pressure
UK horticulture has faced a sustained period of difficulty. Challenges with labour costs post-Brexit and rising energy bills have increased operational costs, while retailer price pressure has remained intense, leading growers to face struggles on multiple fronts.
The Netherlands, which dominates European protected horticulture, offers energy cost support mechanisms tailored to greenhouse production. Dutch growers have historically had access to low-carbon CHP infrastructure and preferential tariff arrangements at a scale that UK policy has not matched[5],[6]. The announcement of substantial relief for 10,000 UK manufacturers, but not for growers producing food for British supermarket shelves, extends that competitive gap further.
What would change things?
The primary route to an improved outcome for growers is a revision to the BICS eligibility framework to include horticultural production, allowing growers to demonstrate electricity intensity against the same thresholds applied to qualifying manufacturers. An alternative route is the creation of a bespoke horticulture energy support framework that reflects the specific cost structure and competitiveness of the sector. Either route requires the UK government to engage meaningfully with the industry and implement a robust long-term strategy.
Energy efficiency investment remains the most reliable solution available, and GrowSave’s programme of knowledge exchange and technical support exists to help identify where consumption can be reduced.
References
- HM Treasury / DESNZ. Industrial Strategy 2025. HM Government, 2025. Industrial Strategy – GOV.UK
- DBT. British Industrial Competitiveness Scheme: consultation on scheme eligibility and approach. HM Government, 2025. British Industrial Competitiveness Scheme: consultation on scheme eligibility and approach – GOV.UK
- Office for National Statistics. UK Standard Industrial Classification of Economic Activities 2007 (SIC 2007). ONS, 2009. UK SIC 2007 – Office for National Statistics
- Lea Valley Growers Association. Responses to energy cost consultations, 2022–2024. Lea Valley Growers Association – Media Articles & Enquiries
- Rijksdienst voor Ondernemend Nederland (RVO). SDE++ stimulation of sustainable energy production and climate transition. Dutch Government, 2023. Stimulation of Sustainable Energy Production and Climate Transition (SDE++) | RVO.nl
- Wageningen University & Research. Energy in Dutch greenhouse horticulture. Wageningen UR, various. Wageningen University & Research
Written by Tom Ovenden
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