The Aluminium Federation (ALFED) has issued a stark warning to the UK Government, stating that key segments of the aluminium sector risk being excluded from the proposed British Industrial Competitiveness Scheme (BICS).

In its formal response to the Government consultation, ALFED cautioned that the current framework creates an “imbalance” by including ferrous casting while excluding non-ferrous casting activities (specifically SIC codes 2453 and 2454). The Federation argues this move places UK aluminium operations at a structural disadvantage against both domestic steel competitors and international markets.

While ALFED welcomed the Government’s acknowledgement that high industrial electricity costs are a barrier to growth, it questioned the data used to determine eligibility.

Concerns over electricity thresholds

The Government has proposed an eligibility threshold for sectors with an electricity intensity above 2.7% of Gross Value Added (GVA). However, ALFED members have provided evidence that aluminium casting operations are significantly more intensive than this, often meeting or exceeding the levels of sectors already included in the scheme.

Nadine Bloxsome, CEO of ALFED, noted that the exclusion of these strategically important activities threatens the entire UK supply chain.

“This is not simply an issue of energy relief. It is about retaining industrial capability, supporting investment, strengthening circularity and ensuring that more aluminium value is processed and retained domestically within the UK economy,” Bloxsome said.

A “processing-light” future?

The Federation’s submission highlights a growing risk of the UK becoming “processing-light”—a scenario where the country exports scrap and secondary material overseas only to re-import higher-value finished products.

To prevent this, ALFED is calling for the BICS to support the full aluminium value chain, including:

• Recycling and remelting
• Non-ferrous casting
• Rolling and extrusion
• Finishing and surface treatment operations
• Domestic midstream manufacturing infrastructure

Impact on Net Zero ambitions

The exclusion of aluminium processing could also undermine the UK’s industrial electrification and decarbonisation goals. ALFED members noted that the current price gap between gas and electricity already discourages investment in electrified technologies. Including the sector in BICS would improve the commercial viability of switching to low-carbon processes, supporting the Government’s wider Net Zero targets.

ALFED has confirmed it will continue to engage with the Government as the consultation progresses to ensure the interests of the UK aluminium ind