The European Union, as one of the largest economic powers in the world, is now faced with new challenges in the energy sector. Sustainability, resilience and diversification of energy sources are key to achieving ambitious climate goals. With increasing energy demand and the global geopolitical crisis, European energy policy must confront a number of pressing issues. One of the main challenges is the transition to renewable energy. The European Union has set a target to achieve carbon neutrality by 2050. To achieve this, all member countries are required to increase the use of renewable energy such as wind, solar and biomass. However, the big challenge faced is the infrastructure and technology needed to support this transition. Large investments in smart power grids and energy storage are urgently needed to overcome the challenge of intermittency of renewable energy sources. The energy crisis triggered by the conflict in Ukraine also adds complexity to the situation. The European Union’s dependence on Russian natural gas has sparked an urgent need to diversify energy sources. The European Union, which is seeking to switch to alternative energy sources and increase energy efficiency, is exploring new relationships with alternative energy producing countries such as Norway, Qatar and the United States. This relationship includes cooperation in hydrogen technology and LNG or liquefied natural gas. Affordable and reliable electricity is another priority. Surging energy prices have caused economic uncertainty in many countries, especially the most vulnerable. Subsidy policies and financial support for the household and industrial sectors are important to maintain social stability and encourage a sustainable energy transition. The European Union also invests in research and innovation to find new solutions to energy challenges. Initiatives such as Horizon Europe focus on developing new technologies that can accelerate the energy transition, including energy storage and improving resource efficiency. In addition, the European Union needs to collaborate with the private sector on innovation and infrastructure investment to encourage green economic growth. In addition, cyber resilience is a big concern as energy systems become increasingly digital. Cyber threats can disrupt energy supplies and cause major damage. Therefore, improving cybersecurity in the energy sector is essential. Addressing the climate challenge, the European Union is now also prioritizing social equality in the energy transition. This includes ensuring that all levels of society have equal access to the benefits of renewable energy and that no one is left behind in this transition. Policies that focus on equitable access and workforce training for the new energy sector are important steps. With the various existing challenges, the European Union must adapt and innovate in order to meet future energy needs while adhering to the principles of sustainability. Good energy policies will be decisive in winning the battle against climate change and promoting economic prosperity.