As businesses operating across the global economy, we are navigating a period of sustained geopolitical tension, market volatility and rising pressure on energy prices for companies and consumers alike.
Such repeated shocks reflect a structural reality: continued reliance on volatile fuel markets exposes economies to disruptions that drive price spikes, destabilise supply chains and delay investment.
For business, this exposure creates persistent uncertainty, raising operating costs and undermining competitiveness.
Electrification powered by clean, locally-generated energy can provide an efficient, common-sense solution. Electrifying transport, buildings and industry is one of the fastest and most cost-effective ways to reduce exposure to fossil fuels and strengthen energy security. This can build more stable and competitive economies, lower energy prices over time, improve resilience to external shocks, and unlock new sources of growth.
Many of the technologies needed to electrify transport, buildings and industry are already commercially available, delivering the same or better services with greater energy efficiency and lower overall energy demand. We need to seize this opportunity and electrify now.
Business is already moving. Across sectors and regions, companies are investing in electrified processes, supply chains and technologies. But the pace and scale of this transition depends on the clarity and consistency of policy signals from governments.
Scenarios from the IEA and IRENA show that a rapid increase of electrification in final energy use to around 35% in 2035 is possible with the right policies.1 Electrification will scale fastest where government policies create stable, investable conditions for the transition away from fossil fuel dependence.
We therefore call on governments to act with urgency and coordination to establish electrification as a central pillar of economic strategy and provide long-term policy certainty.
At the international level, governments should reinforce cooperation and send clear signals that electrified, clean energy systems are a shared economic priority. International processes, including at the G7, G20, BRICS, IEA and UN climate COPs, have an important role to play in aligning direction, reducing policy fragmentation and strengthening investment confidence across borders.
At the national level, governments should implement a coherent set of interdependent domestic policies to enable system-wide electrification and deliver tangible economic benefits, thereby lowering costs, strengthening energy security, and increasing competitiveness:
- Prioritise affordability by realigning fiscal incentives, taxation and efficiency measures and providing targeted support to accelerate electrification of end uses, improve energy efficiency, and reduce exposure to volatile fuel costs;
- Deliver effective design of electricity markets to reward clean flexibility, strengthen long-term investment signals and ensure reliable, resilient power systems
- Invest in modern electricity systems by expanding and upgrading grids, ensuring availability of skilled labour, and deploying smart and grid-enhancing technologies to optimise existing capacity and reduce congestion
- Streamline permitting and grid connection processes to enable faster delivery of renewable energy generation, energy storage, and grid infrastructure and connections for new demand, as well as electrification infrastructure, including charging networks, building electrification, and industrial site upgrades, required for electrified economies
- Develop electrification plans with clear timelines and targets, ensuring alignment with broader national policies and plans, to give businesses and their stakeholders clarity on the rate of travel and the policies they can expect to be implemented to support transitioning from fossil fuel dependence towards productive, electrified economies.
Countries that act decisively to accelerate electrification will position themselves at the forefront of the next energy economy, supporting economic development and people-centred growth. Those that delay, risk locking in higher costs, greater exposure to fuel volatility, and declining competitiveness in a rapidly electrifying world.
Business is ready to invest, scale and deliver. With the right policy frameworks, electrification can drive more secure, productive and competitive economies.
