Encompassing both legislative design and executive implementation, energy governance has become a key instrument for accelerating the energy transition and strengthening environmental protection. This study investigates whether and how governance effectiveness influences Europe's energy transition and environmental outcomes, with a particular focus on their time-varying relationship. Employing the long-difference framework and dose-response function to address heterogeneity and endogeneity, the analysis reveals that stronger legislative and executive governance is associated with increased renewable energy capacity and reduced CO2 emissions. However, these effects weaken or reverse during a medium-run transition phase, pointing to a nonlinear governance–outcome relationship. Likewise economic growth exhibits a nonlinear association with environmental degradation consistent with the Environmental Kuznets Curve hypothesis. The findings collectively underscore our central argument that governance effectiveness exerts a nonlinear influence on the energy transition and that successful outcomes depend not only on the existence of legal frameworks but also, and more critically, on the credibility of their implementation. Strengthening both the legislative and executive dimensions of governance is, therefore, essential for advancing a low-carbon growth pathway in Europe.