GLEG UK Energy Market Update 21-09-26…
September 21, 2026
For energy-intensive manufacturers, electricity can be a significant business cost.
The Energy Intensive Industries (EII) scheme is designed to help eligible UK manufacturers reduce certain indirect electricity policy costs, including the Contracts for Difference (CfD), Renewables Obligation (RO), Feed-in Tariffs (FiT) and Capacity Market (CM). The scheme is administered by the Department for Business and Trade.
How Does the EII Scheme Work?
There are two key eligibility tests.
1. Your Manufacturing Activity
Your business must manufacture a product in the UK that falls within an eligible four-digit NACE code.
This is the sector-level test and determines whether the type of manufacturing activity your business carries out is eligible.
If you manufacture both eligible and ineligible products, the exemption can be applied to the proportion of electricity used for eligible products.
2. Your Electricity Costs
Your business must also pass the 20% electricity intensity test.
This means your electricity costs must be at least 20% of your Gross Value Added (GVA) over the relevant period.
For the EII scheme, GVA is based on EBITDA plus relevant staff costs.
In simple terms, the test is designed to identify businesses where electricity costs have a significant impact on their business.
What Could You Save?
Eligible businesses can receive significant exemptions from certain indirect electricity policy costs.
For example, in Great Britain, eligible EII businesses currently receive a 100% exemption from the indirect costs of the Renewables Obligation.
The actual benefit will depend on your business, electricity consumption and eligible activities.
Could Your Business Qualify?
If you’re an energy-intensive manufacturer, it’s worth checking.
You’ll need to consider:
- Your four-digit NACE code
- What products you manufacture
- Your electricity consumption and costs
- How much electricity is used for eligible activities
- Your financial information and GVA