Ken West is president and CEO of Honeywell Process Technology.
Over the past year, the global energy landscape has shifted in meaningful ways. Liquefied natural gas, and natural gas overall, gained momentum, while growth in areas like petrochemicals and renewables slowed. Global policy developments shaped how governments and companies make investment and innovation decisions, reinforcing the need for stable, long-term policy frameworks to support next-generation energy solutions.
What became clear in 2025 is that the future will require more energy supply requiring all forms of energy, which includes making traditional fuels more efficient while adding innovative alternative fuels to the mix.
Growing energy demand and evolving regulations will continue to shape 2026. Meeting the global need for more power means expanding energy infrastructure worldwide, which is becoming more challenging. As these systems become increasingly complex, digitalization is emerging as the connective tissue that links infrastructure, data and people. The next phase of progress will be defined by how technology is deployed — not only to cut costs and boost efficiency, but to enable intelligent operations, advance modular solutions and strengthen energy security for responsible growth.
Here are four strategic shifts that will shape the energy sector in 2026.
Digital solutions help meet rising energy demand
Looking ahead, connected solutions — where AI-powered tools are integrated with digitally connected infrastructure — will accelerate the shift of energy companies toward intelligent operations. These tools help strengthen and augment workforce capabilities, extract more value from existing assets, and position energy leaders to meet rising demand with greater confidence. Early adopters are already seeing measurable gains in reliability and workforce efficiency.
Skilled labor constraints remain a challenge as experienced workers retire and turnover stays high. To address this, energy companies are turning to digital solutions that upskill the workforce, maintain reliability and scale operations. AI is playing a critical role, analyzing millions of data points across the plant and using predictive analytics to help optimize performance and prevent downtime in day-to-day operations. It is also empowering junior employees with expertise that would normally take decades to build, helping them handle complex scenarios safely and efficiently.
Digitalization is also helping companies extend the life of existing assets and avoid costly new builds. The focus is shifting toward maximizing reliability and efficiency through predictive maintenance and connected operations. Refineries and petrochemical facilities have spent the past decade laying the groundwork for digitalization, and now advances in 5G, AI and cloud computing are unlocking a new level of operational intelligence. By linking assets and processes across entire enterprises, companies can improve reliability, increase output, reduce energy consumption and minimize equipment wear.
The rapid growth of data centers to power AI is adding pressure to the energy system, driving significant demand for natural gas. But AI can help offset this strain by boosting efficiency and optimizing production. By integrating AI-powered solutions, organizations can better manage energy use, streamline operations and reduce emissions. In 2026, energy leaders will sharpen their focus on where and how to expand capacity. Upgrading and modernizing legacy infrastructure with AI and data-driven systems may prove even more critical than building new facilities to meet global demand.
Energy security moves to the top of the agenda
Connected solutions will play a significant role in supporting energy security, but geopolitical uncertainty — including economic tariffs, sanctions and evolving policies — is driving the need to expand energy sources and infrastructure globally.
To support this expansion, many new projects are being developed in regions where construction and execution can be challenging. Energy leaders are increasingly turning to modular solutions for everything from upgrading and expanding traditional refinery and petrochemical facilities to building new LNG and sustainable aviation fuel plants. Modular solutions are critical in regions where labor and materials are in short supply, but they are also widely sought because they provide certainty in project execution, timelines and budget.
While resources vary by region, advanced technology solutions enable regional expansion and localization efforts by allowing a wider range of feedstocks, like biomass, to be converted into energy sources, supporting global energy security.
LNG expansion offers path to boost energy supply
The global need for responsible energy expansion is driving demand for alternative fuel sources. LNG remains essential to energy security efforts, especially in countries that lack access to traditional fuels and those seeking stable, lower-carbon power options.
To meet this demand, LNG project developers are prioritizing proven, bankable solutions that streamline operations and reduce complexity. Energy producers and operators are investing in process innovation to optimize performance, including end-to-end and modular solutions that can reduce costs and accelerate approval and permitting. This reflects a broader push toward technology-driven efficiency across the value chain.
In 2026, LNG projects will balance increasing scale in the short term with long-term energy needs shaped by shifting global demand. With its lower-carbon profile and transportability, LNG will continue to play a critical role in supporting global energy security.
Regulation is shifting to balance sustainability with economic viability
Broad adoption of alternative fuels remains largely dependent on reducing the cost premium. Policy and technology alignment will be essential to accelerating progress in sectors such as shipping and aviation, where new fuels compete with traditional options on both performance and price.
Making energy alternatives economically viable will require a combination of factors, including technological innovation, lower project costs and supportive regulatory frameworks. Companies that can adapt quickly to changing rules and broaden their portfolio to diversify their energy mix will be well-positioned to lead in a more fluid, policy-driven energy environment.
Every region will chart its own course to attain energy security. Some will prioritize emissions reduction. Others will focus on affordability. But all regions are keenly focused on supply stability. There is no single solution or source that will meet the world’s diverse and growing energy needs.
What’s clear is that the future will be shaped by those who build resilient, diversified portfolios that balance reliability, policy, emissions, cost and long-term energy independence. As policy and innovation continue to converge, technology will play a critical role in turning energy ambition into action. The coming year will reward leaders who can act decisively, innovate responsibly, embrace digital progress and deliver results.
