Energy structure and investment efforts shaping green economic growth

• Energy efficiency has the strongest effect on green economic growth • A nonlinear relationship exists between renewables and green productivity • Green finance and regulation influence growth with delayed impacts • FMOLS and FGLS methods confirm long-term energy-growth relationships • Findings support phased green transition in EU-aligned economies Transitions toward greener patterns of economic development progress unevenly across countries, even when long-term sustainability goals are broadly aligned. These differences suggest that measurable improvements may emerge either gradually or only after specific structural conditions are reached. This study aims to identify the long-run drivers of green economic growth and to determine whether their effects emerge gradually or after specific structural thresholds are reached. The analysis covers 28 European countries, including Ukraine, from 2004 to 2023. Green economic growth is measured using adjusted net savings. The study estimates three long-run panel models that examine the effects of energy efficiency, renewable energy (including a nonlinear threshold specification), and green finance. The analysis employs panel cointegration tests, OLS with panel-corrected standard errors, fully modified OLS, feasible GLS, and nonlinear models that capture threshold behaviour. The results show that higher energy efficiency consistently strengthens long-term green economic growth across all countries. Renewable energy exhibits a nonlinear pattern: at early stages, limited renewable deployment generates transitional costs and infrastructure constraints, whereas after reaching a critical scale, further expansion strongly improves green economic performance. Green finance demonstrates a positive and lasting impact, indicating that a sustained financial commitment to low-carbon investments gradually translates into measurable economic and environmental benefits. Ukraine exhibits a greater sensitivity to energy inefficiency and limited benefits from renewables, largely due to insufficient deployment and institutional constraints. Policy implications highlight that green transition policies do not generate uniform outcomes across countries. Effective strategies require accelerating large-scale efficiency improvements, reaching the renewable deployment threshold where positive returns emerge, and strengthening governance to enhance the impact of green financial flows. For Ukraine, alignment with EU regulatory frameworks and targeted institutional capacity building are essential steps for narrowing the gap with EU member states.