Honeywell: Efficiency Now Rivals Sustainability in Europe's Energy Push

Russia's invasion of Ukraine ended Europe's ability to treat the energy transition purely as a sustainability project, according to Anant Maheshwari, president of strategy and global regions at Honeywell Technologies, the industrial automation company with a $66 billion market cap.

"Before the Russia-Ukraine war, the security of gas coming in and the cost of using it was so low; the risk was just not there," Maheshwari says. "Now, it may not be available, and if it is available, it's at a high cost."

For years, cheap and relatively secure gas supply meant Europe could take the economics and security of energy largely for granted. That equation has changed. Europe can no longer think about decarbonization separately from the cost and security of the energy needed to power its economy. The challenge now, Maheshwari argues, is to build an energy system that is simultaneously cleaner, affordable, and secure — without undermining the competitiveness of European industry.

China's breadth, Brazil's biofuels

China offers one template. The country faces its own energy security constraints and, beyond coal, does not control many of the traditional energy sources it relies upon. Its response has been rapid investment across a broad technology mix: solar, wind, biofuels, sustainable aviation fuel, and carbon capture, alongside improvements in energy efficiency.

"China understands that they have an energy security problem," says Maheshwari. "They are very clear that they're not going to create a new source of fuel, so it has to be generated in a way that's sustainable. And therefore they're doing everything with the notion of sustainable technology, but focusing on security and economics."

What distinguishes China, in his view, is not just the scale of investment but the pace of deployment. "They have the widest range of technology applications, at pace and scale," he says.

Brazil presents a different model. Maheshwari calls the country a frontrunner in biofuels, drawing on agricultural resources and crops including sugarcane and macaúba, a native palm tree that can be grown specifically for fuel. The opportunity lies in renewable fuels for sectors where electrification is difficult, including aviation. "Imagine you've got a fully renewable source — you are growing something from the ground and converting that into jet fuel," he says.

Europe's deployment problem

Europe holds its own advantages: world-class companies able to deploy new technologies at scale, strong R&D capabilities, a deep pool of engineering expertise, a large wealthy market, an established industrial base, and sophisticated energy infrastructure. The open question is whether it can deploy those capabilities quickly enough, and at an economic cost that keeps European businesses competitive.

Maheshwari notes that 48% of the energy produced in the EU in 2024 came from renewable sources and 28% from nuclear, according to official EU data. But he argues Europe needs to make better use of all parts of that mix — expanding renewables, nuclear, and natural gas, while making fossil fuel generation cleaner by capturing or reducing its emissions.

Regulation is the potential bottleneck. "Europe needs to make sure that regulation helps industry to accelerate, rather than decelerate," he says.

Efficiency: the cheaper, faster route

Efficiency now matters as much as new energy supply, Maheshwari argues. Increasing production with greener sources misses a potentially cheaper and faster route to meeting demand. He cites a global fast food restaurant chain that had no central visibility of energy usage across its 600 U.K. stores. Once the stores were connected to a central system, consumption variations of as much as 30% to 40% became visible, creating opportunities to cut energy use.

"Savings can be made everywhere. It's not just in areas that we design systems for, but in any areas where systems can be applied," Maheshwari says.

Physical AI enters the equation

AI changes the economics of efficiency. Conventional building controls follow programmed rules: if the temperature changes, adjust heating or cooling. AI can learn from changing conditions, including occupancy, and heat or cool only the parts of a building that need it.

Applying AI to the physical economy is harder than applying it to IT, says Maheshwari, who spent seven years as president of Microsoft India between spells at Honeywell. Industrial systems operate for decades, forcing companies to integrate new technology with legacy equipment, and the data they generate often sits in proprietary systems.

"Operating technology has to connect data to physical processes," Maheshwari explains. "That creates a particular challenge for AI because companies have to introduce new technology while maintaining and integrating legacy equipment."

He calls the broader opportunity "physical AI" — a term, he concedes, with no settled definition. For Honeywell, it means using AI to make buildings, factories, assets, and supply chains more efficient and increasingly autonomous. One application: regulations require periodic testing of fire detectors, a job that can involve technicians physically checking individual devices. An automated system can test multiple detectors remotely and flag those needing inspection, compressing days of manual work.

On jobs, Maheshwari keeps people "at the core of the decision making," using AI to give them intelligence to decide faster — a pragmatic stance for industrial companies already facing labor shortages as populations age.

His closing argument reframes the entire energy debate: the focus should shift from how much more power the world can generate to how intelligently it uses what it already has. "The world will need more energy than it uses and produces today," he says. "The question is, are we going to consume it as inefficiently?"