Electrify to compete: Why countries that plug in faster win the next decade
Molly Walton, Director of Energy, We Mean Business Coalition
As the Coalition prepares to launch its flagship program focused on clean electrification, Director of Energy Molly Walton lays out why electrification is the connective tissue that will enable the energy transition across all sectors — and how countries that incentivize businesses to electrify can capitalize on the greatest economic opportunity of this century, driving growth and prosperity for all.
The 2020s are set to be the dawn of the age of clean electrification. Accelerating the shift to electrified economies, powered by clean electricity, will be the defining trend of the years to come — serving as the foundation for long-term economic success, for countries and businesses alike.
An electrified economy is the goal; electrification is the primary route to get there, as it is the fastest, most scalable and most systemic way to both modernize and decarbonize the economy. But to both get fossil fuels out of the system and keep up with the demands of a new electrified economy, electrification must be paired with a supply of clean power and scale-up of storage.
As we kick off 2026, we see encouraging trends playing out globally. The global stock of EVs and digital devices has been doubling every two years. Electric vehicle sales are soaring globally, as low-cost options emerge. And electrification is increasing in sectors across transport, buildings and industry.
But more can be done. With countries incentivizing businesses, electrification can become the greatest economic opportunity of the century, driving growth, affordability and prosperity.
Why electrification?
Electrification — replacing technologies or processes that use fossil fuels, like internal combustion engines or gas boilers, with electrically powered equivalents, such as electric vehicles or heat pumps — is the most efficient way to support the energy transition: It accelerates the reach of renewable electricity and displaces fossil fuels at point of use.
While many countries are scaling renewables, few focus on electrification at the scale required — even though doing so offers up the largest opportunity to increase competitiveness, ensure affordability, improve livelihoods and strengthen energy security.
Global competitiveness
Globally, rates of electrification are uneven. Electrification is stagnating in places like the United States and European Union, while surging in countries like China and Vietnam. According to Ember, a quarter of emerging markets have higher rates of electrification than the U.S.
Meanwhile, China has raced ahead of other nations to become the world’s first electro state, using its competitive edge in manufacturing to install and produce most of the world’s clean technologies.
That said, as the International Energy Agency pointed out, much of the supply chain for electrification has yet to be built, leaving, significant opportunity for those countries that anticipate and invest. According to Ember, manufacturing capacity for electric vehicles and heat pumps currently cover just 20–30% of expected demand. To truly take advantage of an electrified economy, companies and governments will need to build out capacity and infrastructure across the value chain.
As the world enters the age of clean electrification, the businesses that capitalize on these trends will be rewarded in the marketplace.
Affordability
While electrification can have high up-front capital costs, if we look at lifetime costs, clean electric systems are vastly cheaper to run: They are more efficient, have no fuel costs and have lower maintenance needs.
The IEA and BNEF report that lifetime costs of EVs and heat pumps are already at or below fossil equivalents in most markets, a trend that is accelerating. And cost savings from the shift to renewables and further electricity market integration could amount to around €40 billion annually by 2030.
Long-term affordability, however, differs from short-term affordability. To capitalize on the benefits of electrification and ensure widespread uptake, we must address both the cost of electricity and the upfront cost of the technologies.
Today, power market structures, perverse incentives and subsidies are distorting pricing in favor of fossil fuels. This hinders the affordability of a clean electrified system. While there is no overnight fix, realigning incentives away from fossil fuels — through interventions like grants, tax breaks and regulatory preferences — is one of the most powerful tools that governments have at their disposal to accelerate the transition.
Better livelihoods
Electrified economies, powered by clean energy, immediately benefit public health. Cutting coal, oil and gas use reduces the most harmful pollutants to human health, lowering rates of heart diseases and premature mortality.
The World Health Organisation estimates that the ambient and household air pollution are associated with 6.7 million premature deaths annually, underscoring the scale of avoidable harm that can be reduced by clean electrification.
Electrifying transport, heating and cooking removes exhaust and combustion from streets and homes, improving urban air quality and eliminating indoor smoke exposure, with the greatest gains in dense cities and communities.
These health gains strengthen economic resilience. Cleaner air lowers healthcare costs, sickness and absence, while boosting productivity. The World Bank estimates that global economic costs from ambient air pollution amounts to about $6 trillion a year, or equivalent to ~5% of global GDP in 2020. In contrast, clean energy and electrification accounted for 10% of GDP growth in 2023, with employment and jobs growth outpacing that of the fossil fuel industry.
Security and resilience
Eighty percent of the world lives in fossil fuel–importing countries, with over 50 countries importing more than half their primary energy as fossil fuels. Meanwhile, 92% of countries have renewables potential over 10 times their current demand.
After up-front investment, electrified solutions and clean power technologies last for decades, tapping locally sourced energy that is immune from the vagaries of global pricing and geopolitical shocks. This brings more stable and reliable investment opportunities.
It also reflects global trends, as electrified solutions are already displacing fossil fuels. For example, EVs alone are displacing ~1.3 million barrels of oil per day and are on track to displace ~5 million barrels/day by 2030.
What business is doing
For business, electrifying operations can provide cost savings, new revenue streams and strategic resilience — all while aligning with decarbonization goals and generating lasting value.
Across the real economy in buildings, transport and industry, these solutions benefit businesses and communities alike.
In just one day, German manufacturer Kronospan, in collaboration with Signify, replaced gas lamps with 1,000+ LED high bay lights. They also tailored lighting by area and integrated smart sensors to optimize lighting based on real-time data. Combined, these solutions are reducing electricity consumption by 75%, saving Kronospan €1.72 million over the next decade.
Maersk, a leading global container logistics company, has deployed over 340 zero-emission medium- and heavy-duty vehicles, proving that electrification is becoming mainstream for freight transportation.
Organon, a global pharmaceutical company, is installing Trane Technologies’ decentralized heat pumps to replace their current fossil gas-based boilers. The heat pumps provide sustainable, efficient and all-year round heating and cooling. And since heat pumps are more efficient than boilers, they also save Organon nearly 7,700 gigajoules/year.
To accelerate this shift, businesses can also follow the practical, near-term actions laid out in the Fossil to Clean Business Action Checklists.
How policymakers can support
An electrified economy, with all the benefits that come with it, will require support from governments.
While companies are already innovating and delivering increased investments in electrification, much more is possible. Governments can put in place the right tax breaks, policies and market reforms to create the conditions for business to invest confidently and at scale.
To advance electrification and unlock business investment, policies and regulations are needed at an international, national, sub-national and sectoral level. Such policies may include:
- A global goal, similar to tripling renewables and doubling energy efficiency, to raise the profile of electrification and to set global ambition levels; this sends a clear signal that electrification is key in the transition.
- National and sectoral policies and regulations to ensure ambition translates into action and to align electrification with clean power and grid readiness. The national climate plans (NDCs) for 2035 — submitted by 99 countries plus the European Union — must now focus on implementation. This means creating conditions to accelerate the uptake of electrification such as reforming electricity pricing and market design, build out and upgrading grid infrastructure, expand clean energy supply, and investing in workforce training, for example.
- Redirection of trillions of dollars spent on fossil fuel incentives toward electrification and renewables, better alleviating energy poverty and reducing bills for those who most need it.
As 2026 begins, we see exciting opportunities to bring together business, policymakers and other organizations working in this area to supercharge the age of clean electrification.
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Business and governments have a clear economic case to work together to invest in, innovate, and scale clean electrification.
Electrified solutions — powered by abundant, resilient and affordable clean electricity — can become the driving force for competitiveness, affordability and better livelihoods, for business, governments and communities.
The question is no longer whether to electrify. It’s how fast countries can upgrade the grids, build storage and pass policies to reach this cleaner, more secure future.
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