The Big Debate: Is the Energy Transition Losing Momentum?

At ESF Europe in Vienna this February, 85% of the attendees believed that yes, the energy transition is indeed losing momentum!

Are we losing momentum, or has the pace and rate of change always been slow, driven by lengthy engineering studies and market analysis? We’ve witnessed projects with the right mix of project elements progress at pace, while others have reached a tipping point where the groundwork has been laid, and balance sheets are on the line. According to PwC’s recent Net Zero Economy Index 2024, last year’s global decarbonisation rate of 1.02% was the lowest in over a decade and world must now decarbonise at a rate twenty times faster if we are to limit global warming to 1.5°C. Against this backdrop, we gathered industry leaders to discuss and present different views and perspectives on what is becoming “the elephant” in the energy transition room. 

Read the key takeaways from this insightful discussion:

• Diversifying supply and source – For OMV, the energy transition is not solely about replacing fossil fuels with green alternatives. It's about strategically diversifying energy supply to ensure long-term security and sustainability. Ultimately the goal is to phase out fossil fuels responsibly while integrating alternative energy sources that are not only environmentally friendly but also cost-competitive and technologically viable.

• Climate goal commercial realities – BASF’s Net Zero Accelerator is a dedicated unit driving the company’s efforts in energy transformation, raw material transition, and CO₂ abatement. While supporting the company’s long-term climate goals, the unit is firmly grounded in commercial realities and does not pursue sustainability initiatives solely for the greater good. Every project must have a solid business case and compete for capital just like any other business unit.

• Facing a reality check – As we scale the energy transition, we face a different set of challenges, including longer timelines from Pre-FEED to FID, greater sensitivity to regulatory and policy environments, supply chain vulnerabilities, geopolitical volatility, and persistent inflationary pressure.

• Climate goals demand collective momentum – There is a juxtaposition within the industry between companies that are advancing at pace and those that are reactive. On one side, some companies have clear decarbonisation roadmaps; they know where they’re heading with well-defined time horizons, and quantifiable emissions reduction targets against those timelines. On the other side are those companies, often with smaller asset bases or more limited resources, that are still highly reactive to policy announcements and regulatory shifts. For them, progress remains confined to early feasibility or conceptual studies. This uneven maturity for an industry-wide challenge raises real concerns.

• A shift in perception – There’s been a noticeable shift in the tone and pace of communication around the energy transition. The high enthusiasm and bold announcements from policymakers and industry leaders created the perception of rapid, decisive progress, but the phase of talking is over.

• A shift in focus – What began as a proactive push for innovation and action is increasingly being redirected towards meeting Europe’s complex and cumbersome reporting requirements. For many, this change in dynamics or felt dynamics has altered the conversation about what we are doing to drive the transition to reporting.

• Getting our ducks in a row – This large-scale transition demands extensive infrastructure changes. Given how long it took the EU to deliberate over hydrogen grids, CO₂ pipelines, and electricity grid expansion, we shouldn't expect swift decisions or rapid implementation. The perceived momentum stems more from the sheer scale of the challenge and the timeline required to get all our ducks in a row to align all the necessary components, rather than from the actual speed of progress. Coordination and collaboration become critical success factors.

• The energy transition never really gained momentum – Despite the cost of renewable energy implementation coming down over recent years, we still face serious challenges, particularly in terms of grid connection, permitting, and consenting. This means that those projects have taken a lot longer to see the value than they could have if we could simplify those regulatory hurdles. Looking at hydrogen, actual project deployment continues to lag. The high cost of production and demand uncertainty remain key challenges. Without sufficient demand, projects still struggle to reach FID and help scale up supply. In the absence of off-takers, projects are not bankable or commercially viable.

• The skills and competencies to deliver – The energy transition's success hinges not only on innovation and investment, but also on the availability of people with the right technical expertise. We need qualified, skilled people to implement, scale, and maintain new, emerging low-carbon technologies.

• Losing momentum or strategic recalibration – Some companies are reassessing or reprioritising their strategies to better align with operational realities, capacity limitations, or constraints of the markets in which they operate. Meanwhile, others are staying the course, or even accelerating their transition efforts. This variation shouldn't be seen as a loss of momentum; instead, it reflects a maturing phase, where the transition is becoming embedded as core long-term corporate strategy.

• Low-carbon investment trajectory – Between 2017 and 2023, the 12 member companies of the Oil and Gas Climate Initiative (OGCI) collectively invested nearly $100 billion in low-carbon technologies and solutions, including renewables, biofuels, CCUS, and hydrogen. $25 billion was invested in 2023 alone, marking a steep incline in the investment curve, a very positive sign in OGCI’s low-carbon investment trajectory.

• Achieving the biggest short-term impact on ESG goals – While navigating technology, commercial, and policy uncertainties in today’s market, many commercially robust opportunities exist to improve the energy efficiency of existing assets and reduce their carbon footprint with attractive short-term paybacks. It’s a matter of prioritisation, evaluating where companies can achieve the most significant short-term impact on their ESG goals.

• Harvesting low-hanging methane emissions – Methane emissions from the oil and gas industry amount to approximately 2 gigatons of CO₂ equivalent annually. The technology exists to detect, measure, and mitigate these emissions effectively, but we need a shift in mindset. Just as there is zero tolerance for oil spills, there should be zero tolerance for every molecule of methane released into the atmosphere, which is avoidable.

• Pace-setter projects – Meaningful change requires role models. In the energy transition, we need pace-setter projects that lead the way, demonstrating how to manage the risks, secure the financing, prove technology readiness at scale, and ultimately achieve commercial viability. Examples of projects in Europe nearing reality include the Baltica 2 offshore wind farm, OMV Petrom’s Petrobrazi refinery, and Net Zero Teesside. We need to see more of these projects that provide a pathway and enable the pace of the energy transition to increase further.

• Scope 3 upstream opportunities – Opportunities lie in working with suppliers who have transformed their own energy systems, thereby helping to reduce upstream emissions and improve the overall carbon footprint across the value chain.

• Collaboration is a key driver of transformation – To date, companies have collaborated in bilateral or trilateral partnerships to deliver specific projects. Moving forward, as we encounter increasingly complex challenges, collaboration efforts must deepen and broaden. It no longer makes sense for companies to develop solutions to the same problems independently. Instead, more structured, defined frameworks for collaboration can help deliver more scalable and impactful results, and ultimately accelerate the energy transition.

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Like what you read? This is part of our ESF Europe 2025 post event report—stay tuned, it’s coming soon!