ALFED’s feedback comes after a dedicated roundtable, held in collaboration with Leyton, which brought together producers, recyclers, processors and fabricators to discuss the proposals in detail.
BICS is intended to alleviate electricity-related policy costs for energy-intensive industries. However, concern is raised by the ALFED members regarding the current proposal because it does not align with the energy usage patterns in the aluminium value chain. Substantial revisions in the Federation’s submission have been proposed to make sure that the scheme provides optimum support.
The requirement for broader eligibility criteria is highlighted by the members as the prime concern. Companies engaged in mid-chain activities such as polishing, anodising, coating, cutting, bending, forging and casting are emphasising the fact that, despite their high energy consumption, they are not currently captured under the government-proposed SIC and HS codes. However, these processes are integral to the aluminium manufacturing chain, and it is crucial to get recognised by BICS to truly represent sector realities.
Scrap processors and recyclers were also a key focus. Members warned that excluding these businesses could undermine the UK’s capacity to retain aluminium scrap domestically. Preparation, sorting and processing of scrap require substantial electricity and are crucial to achieving national circularity objectives. ALFED has therefore urged the government to explicitly include recyclers within the scheme’s eligibility framework.
The proposed electricity intensity test is also under concern. Many businesses are at odds with the EII scheme, where high raw material costs distort electricity intensity ratios, making it difficult for energy-intensive operations to get qualified. ALFED recommends excluding raw material costs from the calculation and reviewing threshold levels to avoid repeating these restrictive outcomes.
Should the current EII methodology remain in place for BICS, ALFED has suggested that threshold values be lowered or subjected to further consultation to prevent legitimate energy-intensive aluminium operations from being unfairly excluded. Members also stressed the importance of recognising mixed-fuel sites, particularly melters, which rely heavily on gas due to limited grid access and high connection costs, posing significant barriers to electrification.
Another pressing issue raised was the proposed April 2027 implementation date. Members widely agreed that this timeline is too distant, given the ongoing high electricity prices and urgent need for support. ALFED has therefore urged the government to accelerate the scheme and consider mechanisms for limited backdating once the parameters are confirmed.
