This article is part of Bain’s 2026 CEO Sustainability Report

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In a post-globalization world, energy can only be understood in the context of population growth, economic development, and geopolitics. Those forces sit at the heart of Bain’s 2026 Global Energy and Materials Outlook, which uses Intersect^SM to model three plausible scenarios for the global energy system through 2040. Across those scenarios—based on various geopolitical, trade, capital cost, technology, and policy assumptions—global warming is forecast to range from 2.1 to 2.9 degrees Celsius by the end of the century.

While these scenarios are shaped by choices made around the world, Asia will play an outsized role. China and India alone account for 46% of the swing in 2040 carbon emissions between the first and third scenarios, compared with 18% for the US and EU combined. Asia’s impact is anchored in its expected share of electricity demand growth. In all but one scenario, China and India’s electricity demand outstrips that of any other nation (see Figure 1). The trajectory of the global transition will depend in large part on how that demand is met. 

The three scenarios include:

• one in which present dynamics perpetuate;
• one in which energy and industrial policies diverge further across regions, with uneven effects on trade, energy security, and the scaling of low-carbon technologies; and
• a third “low-carbon scale” characterized by greater global alignment on trade, significant investment in low-carbon technologies, progress in removing bottlenecks such as grid constraints, and financing and policy environments that support investment at that scale.  

At the same time, Asia has been the driving force behind the scaling of the most prominent low-carbon technologies. Solar energy, battery storage, and electric vehicles—the three clean technologies that have exceeded expectations by the widest margins and that underpin the transition, as highlighted in “Navigating Sustainability in an Age of Divergence”—all scaled predominantly through Asian, specifically Chinese, manufacturing, deployment, and, increasingly, innovation.

Figure 1

Four reasons to pay attention to Asia

For business leaders, whether based in Asia or not, the region commands attention across four key themes.

1. Disruption. Innovations in energy technology are some of the most disruptive forces reshaping global industry. The companies scaling these technologies and increasingly developing the next wave (green molecules, for example) are overwhelmingly Asian. If you are tracking the wrong companies or the wrong markets, you will not see the disruption coming. This could be a drop in the cost of these technologies as they scale in Asia that is so steep it makes rival options uncompetitive.
2. Competition. Building on their deep manufacturing expertise and increasingly homegrown innovation, companies in Asia are decarbonizing a cross-section of industries including energy, transportation, manufacturing, and robotics. Industry-leading Chinese and Korean companies include CATL and LG Energy Solution in batteries and BYD and Hyundai in electric vehicles, including fuel cell EVs. Whatever your industry, leaders of local companies and multinational corporations alike must prepare for increasing competition from Asia.
3. Supply chains. Asia has long been the world’s foremost manufacturing hub and equipment provider, but when it comes to supplying energy transition technologies, its significance is particularly dramatic. In the global battery supply chain, for example, Asia, led by China, accounts for three-quarters of the processing and refining of key critical minerals and dominates battery cell manufacturing. Understanding Asia and managing supply chain risks is ever more important in an era of increasingly complex geopolitics.
4. Investment. The scale of the investment required by the transition and development ambitions of Asia is monumental. The region is already the largest single destination for energy transition investment, attracting $947 billion in 2025, according to the IEA. India alone will require hundreds of billions of dollars to meet the sixfold increase in renewable generation forecast in our divergent pathways scenario—a significant opportunity for global investors.

Four countries, four stories

Asia is not a single story, of course. Each country is navigating trade-offs between a trilemma of energy security, affordability, and decarbonization while nurturing ambitions to capture economic opportunities presented by the industries and supply chains central to these transitions. Their choices will shape energy markets, supply chains, competitive dynamics, and investment opportunities.

Nor is Asia the only story. North America, Europe, and the rest of the world all matter to the energy transition. But Asia is the most likely to drive change and opportunity in the next decade and a half.  

This article will examine four markets—China, India, Indonesia, and South Korea—showing how differently the transition is unfolding in each, and what those differences mean for companies seeking to capture opportunities and manage risk.

China: Transition as economic strategy

The world's largest emitter and deployer of clean energy, China has an economic and industrial strategy for transition technologies that helps develop new engines of growth while laying the foundation for a domestic energy mix that is increasingly secure, cheap, and clean.

Coal has provided China energy security as it scales up renewables and has helped it weather recent energy disruptions better than most. In our divergent pathways scenario, coal drops from 58% to about a third of power generation, while renewables increase from a third to more than half (see Figure 2).

Figure 2

Building from its strength in clean energy manufacturing, China has driven down the cost of transition; grown globally competitive brands, including BYD, CATL, and LONGi; and strengthened its position in research and innovation in energy transition technologies. Green molecules and grid technology are the next frontier, and China is focused on them.

Chinese companies recognize the need for mutually beneficial joint ventures and local-for-local partnerships to access export markets, especially high-margin economies of the OECD. That leaves incumbents in those markets—many of which are still designing strategies to manage China’s dominance in mineral processing and clean energy manufacturing—to decide whether they wish to form supply chain partnerships or compete, partner, or both with Chinese counterparts.  

India: Transition shaped by development 

India's response to the energy transition is entwined with its development imperatives and economic goals, including those in its 2047 vision for its centenary of independence.

With a population projected by the IEA to grow to 1.61 billion and a GDP per capita that could increase by more than twofold, India is expected to roughly double its electricity consumption by 2040.

While our divergent pathways scenario forecasts a 12 times increase for solar, 6 times for wind, and 5 times for nuclear, coal is still expected to account for roughly 30% of power generation in 2040 (see Figure 3).

Figure 3

The level of growth in renewables and in energy overall required by this development will require substantial capital. That creates opportunities for foreign and domestic investors alike. The opportunity is broader than just generation capacity. Other sectors targeted for development include biofuels and clean molecules, two- and three-wheel EVs, electrolyzers, energy storage, as well as technology and services more broadly.

India needs technology and expertise as well as capital, but the country also has the potential to be a trailblazer in transition technologies and capabilities. Added together, India is one of the most significant commercial opportunities of the coming decade, but scale of opportunity should not be confused with ease of execution or certainty of returns. For CEOs who are new to India, there is much to learn about government majority–owned energy producers, national and state governments, a vibrant private sector, and active private equity and infrastructure investment markets.   

Indonesia: Transition shaped by resources

Of these four markets, Indonesia most clearly illustrates how resources shape a country’s transition choices and their global implications.

Coal is central to Indonesia's economy and energy security. It is the world's largest exporter and a major consumer of coal, with relatively young coal-fired power plants. The country also recently reversed course on financial assistance intended to accelerate coal plant retirement. Efforts to electrify industry and transport could reduce dependence on oil and liquified natural gas (LNG) imports, but on a coal-intensive grid, this would not necessarily translate into decarbonization.

Yet Indonesia also holds critical clean energy resources, including the world's largest nickel reserves. By restricting nickel ore exports, the country has enticed foreign companies such as CATL, LG Energy Solution, and Hyundai to commit billions to building battery cell manufacturing capacity in Indonesia. In 2024, it became the first Southeast Asian country to produce EV battery cells.

Indonesia sits at the intersection of supply chain opportunity and risk. As the country moves up the battery value chain, it offers companies a genuine route to diversify critical mineral and battery cell sourcing. The investment required to develop that capacity is a growing opportunity for those with capital and technology to deploy. At the same time, Indonesia's clean energy industries are being built on top of its coal-intensive base, and the carbon embedded in its battery and mineral exports is a growing concern. For companies with Scope 3 regulatory requirements, independent commitments, or customer expectations, sourcing from Indonesia may require additional investment to reduce, offset, or capture emissions. 

South Korea: Transition as energy security and export edge

For South Korea, which imports around 85% of its primary energy and has been hit hard by the recent spike in energy prices, the energy transition is fundamental to energy security. Its export industries may be its greatest transition asset.

The government has high ambitions to reduce its LNG imports, close coal plants, and increase nuclear and renewable generation, but a structural shift away from fossil fuels will not come easily. Nuclear facilities take time to build, renewables face major constraints to land access, and the country's ambition to become a leader in AI data centers adds to electricity demand.

Korea's export industries may prove an unexpected catalyst for its domestic transition. Hyperscalers and other foreign purchasers of Korean semiconductors and AI compute power have Scope 3 targets that are creating growing commercial pressure to decarbonize Korea's grid. This is contributing to regulatory easing of land access constraints and capital investment in Korean renewables. Recently, KKR and SK Inc. launched a $1.3 billion renewable energy platform to meet clean power demand from chipmakers and data centers.

Beyond semiconductors and AI, Korea maintains globally competitive positions in batteries, power equipment, and other clean energy technologies. LG Energy Solution, SK On, and Samsung SDI are among the only top battery manufacturers outside China and remain key partners to Western EV automakers. Korea is also one of the few countries capable of constructing nuclear reactors at scale and is developing capabilities in small modular reactors, a technology that could disrupt how the world sources dependable, low-carbon power.

Korea raises questions for businesses across all four themes. On disruption, advances in next-generation nuclear and battery technology deserve close monitoring. On competition, Korean manufacturers of batteries, EVs, and power equipment are global players that cannot be overlooked. On supply chains, Korea's technological credibility, commercial accessibility, and geopolitical alignment make it one of the most compelling diversification options in the transition economy. On investment, the clean energy build-out required to sustain Korea's export industries offers opportunities to those with capital to deploy.

Five implications for executives

Together, these four countries tell a story business leaders are wise to track closely. Many of the factors that will determine the pace, shape, and cost of the global energy transition will play out in Asia. Decisions made by its governments and markets in the coming decade will reshape industries, supply chains, and competitive landscapes.

The implications are neither uniform nor distant. Consider the following propositions that our analysis suggests are true, and that more boardrooms need to fully internalize.

• The companies most likely to disrupt your industry in the next decade may not yet be on your competitive radar. The technologies that have already reshaped energy, transportation, and manufacturing scaled from Asia, and the next wave—in green molecules, grid technology, and next-generation nuclear—is likely to follow. Tracking Western incumbents will not be sufficient when the signals that matter are increasingly coming from China, Korea, and beyond.
• Your supply chain may be more exposed to Asia than you think. The concentration in Asia of critical mineral processing, battery cell manufacturing, and clean energy equipment production represents a structural dependency that most major industries are only beginning to map. As Indonesia's nickel-backed battery industry illustrates, diversifying away from China does not always reduce embedded carbon risk or geopolitical exposure.
• India may be the largest commercial opportunity in the transition economy that international companies are missing. The scale of capital, technology, and expertise required to deliver India's energy and manufacturing ambitions dwarfs what domestic sources can provide. Companies and investors that engage now and navigate the conditions of entry will be far better positioned than those who wait for the market to mature.
• The pressure to decarbonize your supply chain will arrive through your customers as much as through regulation. As Korea's semiconductor industry is already discovering, the Scope 3 commitments of major global buyers increasingly dictate procurement requirements. Companies with carbon-intensive supply chains in Asia face a choice: Invest proactively to reduce embedded emissions or risk potentially losing customers and high-margin markets.
• The capital flows that Asia's energy growth and transition will generate—and require—will be commensurate with the region’s impact on the global energy system. The greatest risk is not making the wrong bet on Asia; it’s failing to make a considered bet at all. You may conclude that your current exposure and strategy are appropriate, but that conclusion should be reached with a clear-eyed view of what is unfolding across these markets.

None of these propositions require a company to be headquartered in Asia, or even to operate there. But they do require CEOs to build genuine conviction about what is happening in these markets—country by country—and monitor developments with the same rigor they apply to their home markets. In an era of fragmented transition, the competitive advantage will go to those who see the risks and opportunities coming and move before consensus forms.

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