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The current use of fossil fuels for the purpose of energy and materials production creates a number of pressing sustainability problems, such as climate change. Therefore, the fossil fuel system is in need of a fundamental transformation. However, despite this need, the targets set by policy makers, and the availability of renewable energy technologies, the fossil fuels system keeps expanding. This raises the question of why it is so difficult to move away from fossil fuels. To answer this question, this thesis focuses on both institutions and incumbents in the energy transition. The fossil fuel system is aligned with an extensive set of rules or institutions that both enable and constrain our behavior and provide meaning to our society. An important characteristic of institutions is that they provide stability and resist change. Incumbents have heavily invested in the fossil fuel system and therefore have extensive vested interests. Incumbents stand to lose a large share of their potential profits when energy production shifts towards renewable energy technologies. Therefore, it is likely that incumbents will attempt to protect their fossil fuel interests. The field of sustainability transitions has acknowledged the central role of institutions and the importance of incumbents in transition processes. However, little attention has been paid to the relationship between incumbents and institutions. This thesis focuses on how incumbents influence institutions as well as on how institutions influence incumbents. The theoretical framework consists of the institutional work and institutional logics stream within institutional theory. This thesis contains four case studies in the context of the Dutch fossil fuel system. The Netherlands was chosen for its stagnant energy transition and its many large incumbents related to fossil fuel activities. Our data collection includes interviews, newspaper articles, policy documents, annual reports, and organization websites. Analysis was conducted through categorization and constant comparison of the data in iteration with the theoretical framework. Multiple data sources were used to assure triangulation of the data. In terms of institutional work, this thesis concludes that incumbents influence institutions by cooperating with government, providing an alternative plan, framing private interests as public interests, commissioning research, and by speaking through the media. Incumbents are very capable at influencing institutions to their own benefit, and are more effective than new entrants’ institutional work. In terms of institutional logics, this thesis concludes that incumbent network operators’ behavior is guided by a hierarchy logic featuring operation according to the Gas Law, responsibility for safety and reliability, and preference for large-scale arrangements. Innovative practices tend to be at odds with this logic, as is the case with biomethane production. The implications of this thesis´ findings are that incumbents exert a considerable influence on the unfolding of sustainability transitions. Namely, institutions and institutional change are a crucial part of sustainability transitions and incumbents’ institutional work activities contribute to institutional change that is aligned with the incumbents’ interests. Dutch government should therefore develop its own energy transition vision, independent from incumbents and with ample attention for ideas from new entrants.

To protect their vested interests, incumbent firms have a history of opposing change, even when change is societally beneficial. Empirical research on this topic is limited. In this dissertation we study the role of incumbent firms in the socio-technical transition to a more sustainable society. The development and commercialization of new, cleaner technologies are important for such a transition. But these technologies render obsolete many existing assets and competences that are specific to the established technology, which decreases the competitive advantage of incumbents. Incumbents that thrive on the established technology therefore have incentive to prevent the introduction of such new, cleaner technologies. The role of incumbent firms in sustainability transitions is studied by looking at how they facilitate transition through innovation, and how they influence transition through political influence strategies. The focus is on the automotive industry. Firstly, we studied the relation between competitive forces, that stimulate incumbents to innovate, and the continuation of waves of Clean Vehicle Technology (CVT) development. The findings suggest that competitive forces positively relate to continued CVT development. Because of competitive pressures, we expect the current wave of electric vehicle (EV) development not to collapse like previous waves of CVT development, but to be prolonged on the longer term. Secondly, we quantitatively studied what types of incumbents pioneer radical innovation, by linking their incentive and opportunity to innovate to EV sales over the period 1990-2011. It turns out that during the period that EVs were commercialized (i.e. 2007-2011), large car manufacturers with both a strong incentive and a strong opportunity to innovate sold significantly more EVs. Hence, car manufacturers that profited relatively little from the established technology and that had developed an EV asset position, were the ones to abandon the established technology first by engaging in radical innovation. Thirdly, we studied the innovation and political influence strategies incumbents used in response to public CVT policy. The case study focused on incumbent car manufacturers’ response to the Californian zero emission vehicle mandate over the period 2000–2013. We developed a new theoretical framework on corporate response strategies to public policy with which we integrate the innovation and political activities literature. Combining patent, sales and content analysis, the research shows that car manufacturers initially showed few innovation activities, but over time strongly increased their efforts. Their political influence strategies changed from opposing the mandate to trying to shape and/or support it. However, coalitions continued to oppose the mandate, as they were assigned to do the manufacturers’ “dirty work”. We showed that car manufacturers combine their innovation and political influence strategies in synergistic ways. The case study thus illustrates that the role of incumbent car manufacturers over time changed from hampering socio-technical transition to a more sustainable society, to facilitating it. To deal with industry opposition to policy interventions, our research suggests that policy makers focus their interaction with industry on individual firms instead of coalitions, craft policies that stimulate competition between firms to break apart their closed industry front, and complement technology-forcing policies with demand-pull initiatives.