EME Macro/Strategy: macro considerations of the energy transition

This report looks, in detail, at the costs and implementation bottlenecks of the energy transition. We start with international agencies' reports, primarily from the IEA, the IPCC and the IMF, as the main sources of long-term projections to derive the required investment needs for part of our coverage universe, primarily CEE. The central scenario, in our view, is of increased governmental commitment ahead, to achieve net-zero emissions, as global warming effects intensify. Nonetheless, we note that the transition will be costly and pro-inflationary, a discrepancy compared to how most of the electorate perceives it. We see, in the EU, the risk of a political backlash, which would make the transition even more costly later on. This first report identifies five themes for analysis, including political risks, the transition to electric vehicles, renewable energy challenges, electrification, and the geopolitics of critical minerals.