Asia's Carbon Markets Strategic Imperatives for Corporations 2025

Capture new business growth opportunities – empowered by carbon markets The growth of carbon markets fuels demand for low-carbon technologies and services (including carbon removals), unlocking significant commercial opportunities. Companies can pursue these opportunities by strengthening core business – for instance, renewable energy firms accelerating scale and offering – or by developing “Engine 2 businesses”44 such as conventional energy or chemical companies expanding into green sectors. Figure 16 identifies commercial opportunities in four business model archetypes: –Proven low-carbon technologies and solutions. –Green service champions. –Digital tools. –Technologies of the future.Imperative 2 Use cases for carbon credits in the net-zero journey FIGURE 16 Note: 1. Risk profile accounts for financial risks (e.g. magnitude of multiple, stability of cash flows) and projected market growth. Source: Bain & Company analysis.Description Investment thesis/what you need to believe Opportunities foster ed by carbon marketsCapital intensity Risk pr ofile1 Empowerment of high- emissions enterprises as a decarbonizing solution; overseas competitiveness while exporting to markets with exter nalities.Proven products enabling the energy transition (e.g. green energy natives, electrification etc.).Proven low-carbon technologies and solutionsGreen service championsTechnologies of the futureDigital tools — High differentiation potential. — Scalable business models with potential for margin improvement. — Critical components with limited substitutes, yet broad applicability and strong underlying demand. — Exclusive access to more customers and penetration potential.Varied across assets LowAdvanced digital tools (e.g. AI, digital twins, blockchain, cloud computing) and digital- driven model shifts. — Clear regulatory frameworks and certainty on winning tech. — Innovations can significantly enhance production efficiency and optimize energy consumption. Incubation and incentivization of technnologies enabling market efficiency (e.g. AI, blockchain etc.).Services supporting the energy transition (e.g. carbon asset mgmt. services, green financing etc.). — Direct customer access to optimize profitability (vs. broker-led). — High degr ee of expertise. — Scalable business models (demand/r egulatory growth) and clear monetization model. — Clear benefit for employer (vs. all with service personnel). Emerging needs for end- to-end carbon asset management solutions from high potential sectors (e.g. new industries cover ed by ETS) .Promising emerging carbon reduction tech for a faster transition (e.g. CCUS, green H2etc.). — Clear regulatory frameworks and certainty on winning tech. — Leading player with a defensible competitive advantage. — (Exclusive) access to early adopters (OEMs/ customers). — Clear path of monetization with models that are not easily replicable.Varied across assets Varied across assets Varied across tools Low Moderate High Incubation and incentivization of innovative decarbonization technologies empower ed by CCER.Significant increase in overall demand is catalysed by carbon markets Asia’s Carbon Markets: Strategic Imperatives for Corporations 36