Europe's energy crisis has upended the green transition and undermined efforts keep global warming below 1.5 degrees Celsius, business leaders and environmentalists said on Monday, with one warning of an "existential threat" to climate goals.

With parts of Europe facing a possible fuel shortage this winter, panelists at the Reuters IMPACT sustainability conference in London addressed the challenge of keeping the power on - sometimes by producing and using more coal - without giving up on the region's climate goals.

"We're in a transformational moment," said Steve Malkin, CEO of environmental consultancy Planet Mark, noting the war in Ukraine and resulting energy crisis posed an "existential threat" to countries' sustainability goals.

Prices for thermal coal, used to generate electricity, and other fossil fuels have soared, as many European countries go with less Russian gas.

While coal demand had been expected to decline in the long-term, there's been a resurgence in Europe in recent months as coal plants are turned back on.

"We need (coal) in the short term of the energy crisis," said Christian Rynning-Tønnesen, CEO of Europe's largest generator of renewable energy, Statkraft. "But policywise, we need to go for low emissions and renewables in the long-term."

Accelerated transition

While many speakers at the conference worried the energy crisis could slow climate progress in the near term, some were optimistic it could consolidate the movement to greener grids to ensure energy security in the future.

"The transition to renewable energy will go faster now," said Ikea CEO Jesper Brodin during an interview with Reuters, noting the crisis would also encourage energy efficiency.

With the next two years expected to be economically challenging, he said, Ikea is introducing more energy efficient products for customers feeling the cost-of-living crunch, including LED lighting and electronics powered by solar light and batteries.