Energy Intensive Industries (EII) compensation scheme and Network Charging Compensation (NCC) scheme

Understand your eligibility for EII support

• The EII compensation scheme was designed to ensure that the UK’s most energy intensive businesses remain competitive within global markets
• This government initiative is designed to offset some energy-related costs that disproportionately affect industries with high electricity use
• These costs come largely from renewable policy mechanisms such as Renewable Obligations (RO), Feed in Tariffs (FITs), Contracts for Difference (CfDs), and other non-commodity elements
• Eligible businesses can receive significant compensation, in some cases up to 100% of certain charges
• To be eligible, a business has to operate within an eligible sector, defined by a four-digit Standard Industrial Classification (SIC) code
• Organisations approved for an EII Certificate are mandated to make quarterly and annual returns to the Department of Business & Trade

What are SIC codes?

• SIC codes categorise a business’ activities
• The codes are a primary filter to determine which industries are energy and trade intensive enough to warrant support
• Many of these are within manufacturing, chemicals and food production
• The government publishes a list of eligible SIC codes

Electricity Intensity Test

In addition to the SIC classification, to demonstrate eligibility for EII compensation, businesses must pass the electricity intensity test, demonstrating that their electricity costs amount to at least 20% of their Gross Value Added (GVA), based on data from the three most recent financial years.

Understanding the NCC Scheme

• The NCC Scheme is a UK government programme to provide all organisations who hold an Energy Intensive Industries certificate (EIIs) with additional financial support by compensating them for a portion of their electricity grid network charges
• It is funded by a levy paid by all electricity suppliers and administered by Elexon
• Currently EIIs receive a 60% reduction on their network charges, increasing to a 90% reduction from the 1st April 2026
• EII’s are required to make quarterly applications to Elexon for rebates on the Transmission, Distribution, and Balancing Services Use of System charges they have incurred

Remaining compliant for the EII and NCC schemes

Participants have to liaise with the electricity suppliers and make quarterly and annual returns to Elexon and the Department of Business & Trade to fulfil the schemes’ reporting obligations. These data returns have strict submission deadlines, which if aren’t adhered to, will result in eligible organisations not receiving the full level of relief they qualify for.

How we can help

As specialists in business energy management and compliance, we can review your SIC classification and perform the electricity intensity test to check your eligibility. We can support you through the EII compensation scheme application process, and, if you are approved, can assist you with managing both EII and the NCC Schemes. The data returns have strict submission deadlines and failure to meet these will result in you not receiving the full level of relief.

Contact us to arrange a no-obligation discussion with one of our energy experts to ensure you receive the full support you are entitled to, while remaining compliant.