First introduced in Allocation Round (AR) 7, the Clean Industry Bonus (CIB) rewards clean energy projects with extra CfD revenue support through a competitive allocation process where projects invest in more sustainable supply chains. Whilst remaining the preserve of fixed and floating offshore wind for AR8, AR9 shall see CIB extended to onshore wind.
The Government boasts an expected £204 million of public investment in CIB, leveraging up to £3.4 billion of private investment in manufacturing, factories and ports as a result of AR7. With AR7 offering funding of £27 million per gigawatt of offshore wind, Department for Energy, Security and Net Zero (DESNZ) is now looking to build on that success by extending CIB into AR8 and beyond.
In anticipation of AR8, DESNZ has produced drafts covering a revised allocation framework and implementation monitoring guidance, alongside a consultation on proposed changes to the terms of the Contract for Difference.
What was required in AR7?
Minimum standards were required to be met as a pre-requisition to allocation round participation in AR7 with minimum investment levels falling into one or both of two criteria, being investment in shorter supply chains and investment in more sustainable means of production. The standards sought to drive capital investment within the UK, particularly in government-designated deprived areas and to encourage prioritisation of lower carbon emitting suppliers. For fixed-bottom offshore wind, sums invested across all minimum standard proposals was at least £100m per GW.
Beyond this, generators could seek top ups through up to ten CIB extra proposals. These also needed to meet the criteria but were scored on the level of investment beyond the minimum required and the proportion of suppliers with Science Based Targets above the minimum threshold, as well as other factors set in the framework. Proposals for CIB extra would be ranked and bonuses allocated on a priority basis.
Proposals required detailed evidence of proposed investments and supply-chain arrangements with a focus on investments in ports, manufacturing, blades, nacelles, towers, foundations and transition pieces, export and array cables, onshore and offshore infrastructure, installation, vessels, mooring and anchoring, and floating substructures, assembly and marshalling.
What’s changing in AR8 and beyond?
Going into AR8, new obligations and structural changes have been incorporated in the CIB framework as a result of consultation. These changes include a focus on workforce protection, skills investment, the introduction of onshore from AR9, and process improvements and regulatory streamlining.
For AR8 and beyond, the following changes have been introduced:
– Workforce protections: from AR8, all generators and suppliers included as part of the shorter supply chains criterion (Criterion 1) must sign up to the Fair Work Charter on application to CIB and remain a signatory to the charter throughout implementation. There are limited exceptions for small enterprises and new facilities.
– Skills investment reform: stopping short at project-specific required investments for AR8, DESNZ intends to establish a skills investments fund and will work with the Offshore Wind Industry Council, Renewable UK and Scottish Renewables to explore how this can be delivered. For AR8, generators will need to have contributed their industry agreed amounts to the Offshore Wind Growth Partnership.
– Onshore wind: the CIB framework will include onshore wind from AR9 with a minimum standard investment of £25m/GW for projects applying for CIB extra funding and a ringfenced sub-budget to protect competitiveness.
– Process improvements and regulatory streamlining: timelines have been shortened to enable annual allocation rounds. One single application will be needed per project, clarifications have been made to force majeure, the Government has reserved powers to re-structure the budgets and the CIB scheme has been extended to all allocation rounds established before December 2028. In addition, CIB payments will commence upon delivery of the commitment as opposed to the CfD start date.
– CIB Extras: Generators will also be able to include up to 15 CIB extras proposals for AR8 and beyond.
The interim Fair Work Charter was published on 9 March 2026 by DESNZ (available here) with the aim to ensure clean energy jobs are good jobs. The charter sets a minimum standard for AR8 and seeks early alignment with changes due under the Employment Rights Act 2025.
The charter is in two chapters – Chapter 1: independent worker voice and Chapter 2: health, safety and welfare. Supporting independent worker voice, the charter seeks early implementation of trade union access rights, proactive support in trade union access and early implementation of the duty to inform workers of their right to join a trade union. To ensure health, safety and welfare, the principles approach requires adoption of best practice, pro-active communication and collaboration, support of inspections, broadening union access to health & safety forums and ensuring sub-contractors are similarly protected. The charter also provides for a dispute resolution process should a signatory not uphold their commitments.
Consultation: Clean Industry Bonus changes to Contracts for Difference
On 4 March, DESNZ launched a new consultation on the standard forms of the terms and conditions and contractual agreements for AR8. The amended CfD documents contemplate both those topics proposed in December’s consultation on changes to AR8, as well as the change for the Clean Industry Bonus covered in this article. It also fully fleshes out for consultation the proposed changes for hybrid metering.
As a reminder, the December 2025 consultation (covered in our article here) sought changes to AR8 in relation to surrendered capacity, hybrid metering, floating offshore wind, deepwater foundations, tightening prevention of delayed CfD start dates, exclusion of Gate 1 connection reform projects, as well as other administrative and legislative changes. Whilst the final response to the December 2025 consultation is awaited from DESNZ, its has taken the opportunity for convenience to incorporate these now.
For CIBs, the main changes to the CfD documents are in Schedule 2 to the standard terms and conditions. This schedule seeks a generator’s compliance with the CIB Statement (a confirmation of the project meeting the minimum standards received from DESNZ) and obligations in respect of CIB commitments. It also allows the Low Carbon Contracts Company (as the CfD counterparty) to act on a generator’s CIB Implementation Statement, including making delivery payments and applying Performance Related Adjustments for non-delivery. The schedule also includes drafting for the CIB process improvement changes and new or amended minimum standard criteria.
The consultation on proposed amendments to the CfD contract to implement the CIB reforms, and also on hybrid metering, ahead of AR8 closes at 11:59pm on 1 April 2026
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2026.