Libya Energy Transition: Balancing Oil Dependence and Renewable Ambitions
Global forecasts suggest hydrocarbons will remain central to the energy mix even as countries set ambitious climate goals. The International Energy Agency projects oil demand will continue climbing through the mid-decade, while BP expects global consumption to reach a peak of more than 103 million barrels per day by 2030. Gas demand is also expected to rise in Asia under current policies. For Libya, which relies almost entirely on oil and gas, these outlooks provide short-term breathing space while raising questions about long-term strategy.
Libya’s economy is dominated by hydrocarbons, which account for around 95 percent of exports and state revenue. Political instability has disrupted production in recent years, but the oil sector is recovering. After blockades lifted in 2023, output rose sharply and the IMF projected a 15 percent increase in hydrocarbon production. With 48 billion barrels of proven reserves, Libya holds 41 percent of Africa’s total and remains the continent’s second-largest producer. Policymakers see these resources as essential to public finances and reconstruction, even as international partners press for diversification.
Hydrocarbons and International Partnerships
Tripoli has turned to international firms to stabilize and expand production. In 2025, the National Oil Corporation announced exploration agreements with BP and Shell covering three major fields. Other companies, including Italy’s Eni, Austria’s OMV, and Spain’s Repsol, have also resumed operations after years of absence. BP is reopening its Tripoli office and restructuring concessions in joint ventures with Eni and the Libyan Investment Authority.
European partners remain central. The EU and UNDP fund reforms on energy efficiency and policy dialogue, while France’s TotalEnergies has taken the lead on solar projects. Oil Minister Khalifa Abdulsadiq has emphasized a balanced transition that secures energy security and ends gas flaring by 2030. EU Ambassador Nicola Orlando has praised Libya’s commitment to diversifying its economy, describing the partnership as one that should deliver benefits for all Libyans.
Libya has also deepened ties with Turkey, which is co-developing solar and wind projects and supplying modern turbines and panels. Agreements include undersea links that could one day export electricity to Europe. Turkish firms are already involved in emergency power projects in Tripoli and Ubari, while Libyan authorities highlight training programs that build national capacity and reinforce sovereignty.
Renewable Ambitions and Domestic Reforms
Alongside oil projects, Libya is setting renewable targets. The government plans 4 gigawatts of renewable capacity by 2035, representing about one fifth of its future energy mix. The centerpiece is the 500-megawatt Saddada solar farm, developed with TotalEnergies and national agencies. Additional tenders for solar, wind, and waste-to-energy are being prepared.
The first reforms have targeted efficiency. In late 2025 the Planning Ministry, backed by the EU, launched standards for refrigerators, air conditioners, and lighting. Officials hope such measures will reduce demand and postpone the need for costly power plants. Minister Mohamed Al-Zaidani described the move as part of a broader push for a transparent and efficient energy sector. The EU has called these steps key to building a reliable system that serves Libya’s future transition. Public initiatives, including the national Energy Expo, have also showcased Libyan innovation and youth-led climate campaigns.
Still, the pace of change is gradual. Libya’s growing electricity demand and aging infrastructure mean oil and gas will remain dominant for years. UNDP and government speakers continue to stress energy security even as they promote cleaner sources. For Libyan leaders, the transition is framed as a long-term process guided by national priorities rather than external timelines.
Global Climate Shift: Risks and Rewards
The global energy transition presents risks that Libya cannot ignore. A peak in oil demand could reduce prices and strain public budgets. The IMF has warned that diversification away from hydrocarbons remains one of Libya’s greatest challenges. European carbon policies could eventually raise costs for Libyan exports. Heavy reliance on a few foreign partners may also leave the sector vulnerable to outside pressures.
Yet opportunities exist. Natural gas offers a lower-emission bridge fuel, and Libya’s reserves could support exports to Europe through pipelines or LNG projects. Abundant sun and wind give Libya potential to export renewable electricity to Mediterranean neighbors. Carbon credits for reducing gas flaring or investing in reforestation could open new sources of revenue. Analysts also note that oil demand in Asia and Africa is likely to remain strong even as advanced economies decarbonize, providing stable markets for Libyan exports.
For Libya’s policymakers, the challenge is to strike a balance. Oil and gas will continue to provide revenue and jobs, but investment in renewables and efficiency will shape future resilience. International partners encourage this dual strategy, stressing that the transition must support equitable growth and national ownership. Ultimately, Libya’s success will be measured not just in barrels of oil but in how effectively it uses energy wealth to build sustainable industries and protect its sovereignty.
As the country looks ahead, its energy sector has become a test of how a resource-rich state can navigate a shifting global landscape. By sustaining oil revenues while gradually expanding renewables, Libya could secure both economic stability and a place in the emerging Mediterranean energy economy. The next decade will be decisive in determining whether Libya’s energy strategy strengthens its sovereignty and prosperity or leaves it exposed to the volatility of global markets.
