For years, the energy transition was framed around ambition: global climate agreements, national roadmaps and corporate net-zero commitments. That phase is giving way to something more fragmented, more regional and more commercially consequential, says Franziska Danz, Market Owner EMEA, ION Commodities.
Now, the U.S. has stepped back from multilateral climate commitments, Europe is embedding carbon into trade and industrial policy, and China is treating clean technology as a manufacturing advantage.
For companies, the result is a more complex operating environment. Decarbonisation is no longer just about targets, but about managing a growing web of power procurement, carbon exposure, certificates, supply-chain data and project economics.
At the same time, markets are becoming more volatile, fragmented and difficult to navigate.
The U.S. withdrawal is a symptom, not the story
The U.S. withdrawal from the Paris Agreement was not entirely surprising given the country’s changing attitude towards climate policy. It is now focused on energy dominance, generating cheap energy by any means necessary to, among other industrial areas, win the AI race against China.
There’s been a shift away from focusing on the energy transition, to energy addition, looking for the most cost-effective way to support demand.
This change in approach has significant implications for international climate finance. The U.S. has also withdrawn from the Green Climate Fund and stepped down from its board seat, directly weakening one of the international mechanisms designed to support energy transition investment in developing economies.
While others may seek to fill the gap, constrained public finances globally make it unlikely that lost funding will be fully replaced.
Crucially, however, U.S. federal policy is not the whole story. States retain significant autonomy, and established regional regimes and certificate frameworks are likely to endure. The political signal from Washington matters, but it will not ultimately stop the energy transition.
Instead, it is the latest manifestation of a tension that governments are being forced to confront: the trade-off between economic competitiveness, social affordability and the speed of decarbonisation.
Ambition must meet affordability
This tension was downplayed for years. Ambitious targets helped mobilise capital and accelerate deployment, but they also created costs that households, industries and governments are increasingly unable, or unwilling, to absorb without a clearer economic case.
Even in Europe, the narrative has shifted from decarbonisation at any cost to managing its economic and social consequences.
That shift is visible in the EU’s Clean Industrial Deal, which explicitly links decarbonisation with competitiveness, lower energy costs and support for European industry. Europe is not abandoning climate policy: it is recasting it as industrial strategy.
Ambition still matters, but climate policy is now being tested against a tougher set of measures, including industrial competitiveness, energy affordability and supply-chain resilience. Moreover, the need for energy security given question marks over Russian and Middle Eastern energy, and now also U.S. LNG, means renewables represent a medium to long term path away from energy dependence.
Recasting climate policy as industrial strategy
For Europe, mechanisms such as the Carbon Border Adjustment Mechanism will become more important as transatlantic policy divergence widens.
The EU Council’s recent move to strengthen CBAM, including by extending its scope to new products and closing potential loopholes, shows where climate policy is heading. Carbon is moving from international diplomacy into trade, accounting and market access.
That is a major change for companies. For exporters to regulated markets, embedded emissions are becoming a significant commercial variable, regardless of the climate policy position taken at home. Companies must be able to measure, verify, and manage the carbon intensity of the products they sell.
Capital is becoming more selective
From an investment perspective, renewables and other low-carbon assets will continue to be built, but investment is likely to become more selective.
Projects that can stand on their own economics, secure credible offtake, manage grid constraints and withstand policy volatility will remain attractive. More marginal projects, or those reliant on stable subsidy assumptions, will face a harder path.
Corporate demand will also remain important, although it should be understood more carefully than before. Major technology and industrial players are unlikely to retreat wholesale from clean-power procurement, but they are becoming more selective about price, location, reliability and credibility.
Recent corporate power-market data points in this direction. BloombergNEF reported that global corporate clean-power purchase agreement volumes fell in 2025 for the first time in nearly a decade, even as hyperscalers such as Meta, Amazon, Google and Microsoft accounted for almost half of global activity.
That suggests not a collapse in corporate demand, but a more concentrated and sophisticated market. Clean power still matters, but buyers increasingly need it to be firm, affordable, deliverable and auditable.
Clean power as a strategic asset
The rise of AI and data centres makes this more urgent. Large, concentrated power loads are forcing companies to go beyond viewing clean energy as a climate commitment to treating it as a strategic asset. Major electricity users must manage power availability, price exposure, certificates, storage, grid constraints, and carbon credibility simultaneously.
China adds another layer to the competitiveness story. While the U.S. steps back from multilateral climate commitments and Europe turns carbon into a trade and industrial-policy issue, China continues to treat clean technology as a manufacturing advantage. It is expanding renewables while continuing to rely on coal and gas within its domestic energy mix, but across clean-technology supply chains, it has built scale that gives it strategic leverage.
For the rest of the world, the question is whether climate policy becomes a cost to be managed or an industrial opportunity to be captured.
Decarbonisation can no longer sit outside risk management
For companies exposed to energy and commodity markets, the conclusion is clear: decarbonisation can no longer sit apart from trading, procurement and risk management. Carbon exposure, renewable certificates, clean-power contracts, fuel switching, storage economics and border-adjustment costs are becoming connected variables.
Treating them as separate sustainability, compliance, or procurement issues will make it harder to understand the true cost and risk of the transition.
The green transition has not lost momentum so much as changed form. The question is no longer whether to decarbonise, but how to do so while remaining competitive.
Managing energy costs, power availability, carbon exposure and increasingly complex supply chains will become defining business challenges.
The next phase of the transition will not be won by the boldest targets, but by the organisations best able to translate ambition into economic advantage.
