Due to increasing awareness on environmental concerns, stringent targets for energy efficiency and emissions are being urgently set by the European Union, in the frame of worldwide agreements. Innovation represents the fundamental challenge for the involved European industries to meet the targets. They are forced to improve their design under conflicting requirements between customers (increasing performances) and regulatory bodies (higher efficiency). Supporting and promoting innovation is of paramount priority to allow them surviving in the globalized and competitive market.Both energy generation and usage are forced to become greener, thus both the related industries are affected by these considerations. Major players in this direction are represented by clean energy sources and automotive field to reduce pollutant gases and fuel consumption. Mechanical transmissions are crucial for both the applications, where they are responsible for significant energy losses. Current research studies document margins to significantly reduce transmission losses, but also a lack of knowledge on loss phenomena.The purpose of this IAPP project is to enable a transfer of knowledge between partners with complementary expertise and test facilities in the field of mechanical transmissions design and optimization. Promising state-of-the-art modelling methodologies will be investigated for different sub-systems in a transmission (gears, bearings, structure). The aim is to combine promising sub-system models to analyse and optimise a mechanical transmission as a complete coupled dynamic system. A systematic approach will be followed for the development of innovative simulation methods, from upfront until the detailed phase, supported by experimental validation. The resulting technology is perfectly in line with the efforts of the European Community to increase efficiency of industrial products and processes, yet improving quality.