ALFED warns UK aluminium sector risks exclusion from British Industrial Competitiveness Scheme
Image: ALFED
The Aluminium Federation (ALFED) has formally submitted its response to the Government’s consultation on the proposed British Industrial Competitiveness Scheme (BICS), warning that significant parts of the UK aluminium industry risk being excluded from support despite being strategically important to manufacturing, recycling and industrial resilience.
While welcoming the Government’s recognition that industrial electricity costs remain a major barrier to competitiveness, ALFED has raised concerns around the proposed scope of eligibility, particularly the exclusion of non-ferrous casting activities under SIC codes 2453 and 2454.
Under the current proposals, ferrous casting operations are included within the scheme while equivalent aluminium and non-ferrous casting activities remain excluded.
ALFED has warned that this creates a clear imbalance between steel and non-ferrous manufacturing and risks placing UK aluminium casting and processing operations at a structural disadvantage relative to both domestic competitors and international markets.
ALFED’s submission also questions the underlying electricity intensity assumptions applied to non-ferrous manufacturing activities within the consultation framework. The Government has stated that eligibility for foundational manufacturing industries will apply to sectors with electricity intensity above 2.7% of GVA. However, evidence provided directly by members suggests that aluminium casting operations are significantly more electricity intensive than these thresholds and are comparable to, or exceed, other sectors currently included within the scheme.
The Federation has warned that relying solely on broad SIC-level categorisation risks failing to capture the operational realities of integrated aluminium processing activities and may unintentionally exclude strategically important businesses that are highly exposed to UK industrial electricity prices.
The Federation’s submission also highlights broader concerns from members around the treatment of integrated aluminium processing activities, including downstream finishing and surface treatment operations such as polishing, coating and related processes, which are highly energy intensive and central to UK manufacturing capability.
ALFED argues that the proposed framework does not yet fully reflect the realities of the modern aluminium value chain, where recycling, remelting, casting, rolling, extrusion, processing and finishing are often closely interconnected.
Commenting on the submission, Nadine Bloxsome, CEO of ALFED said:
“The UK aluminium sector fully supports the Government’s ambition to improve industrial competitiveness and strengthen domestic manufacturing capability. However, if the scheme excludes strategically important non-ferrous processing activities, there is a real risk that critical parts of the UK aluminium supply chain will remain at a competitive disadvantage.
“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.”
The Federation’s response also stresses that aluminium should be recognised as a strategic secondary raw material and highlights the growing risk of the UK becoming increasingly “processing-light”, exporting scrap and secondary material overseas while re-importing higher-value finished products.
ALFED has called for BICS to support the competitiveness of the full aluminium value chain, including:
- Recycling and remelting
- Non-ferrous casting
- Rolling and extrusion
- Advanced processing and alloy capability
- Finishing and surface treatment operations
- Domestic midstream manufacturing infrastructure
The response further highlights the importance of long-term investment certainty, competitive industrial energy policy and alignment between energy, trade and circular economy frameworks.
ALFED noted that the UK aluminium industry already has strong circular capability, established recycling infrastructure and significant demand across automotive, aerospace, packaging, construction and low-carbon technologies. However, high electricity costs and uneven policy support continue to weaken the competitiveness of domestic processing operations.
The submission also highlights concerns that excluding aluminium casting and wider non-ferrous processing activities from BICS could undermine industrial electrification objectives. Members noted that the current cost differential between gas and electricity already creates significant barriers to investment in electrified processing technologies. ALFED argues that inclusion within BICS would help improve the commercial viability of industrial decarbonisation investment while supporting the Government’s wider Net Zero ambitions.
The Federation has confirmed it will continue engaging with Government as the consultation progresses and will continue representing member concerns around industrial competitiveness, supply chain resilience and domestic manufacturing growth.
