Engineers of today must be shaped to tackle global challenges that are becoming increasingly complex. With globalization and digitalization, new sets of skills are required of graduated engineers. Often referred to as “21st century skills”, they encompass teamwork, leadership, digital literacy, and communication. Research has demonstrated that active learning methods such as problem-based learning (PBL) and project-based learning (PjBL), which emphasize “learning by doing,” are more effective in shaping competent engineers. More recently, challenge-based learning (CBL) has emerged as a growing pedagogical approach. The objective of this study is to evaluate the integration of CBL within the online master's program in Energy for Circular Economy in Sri Lanka, developed within an EU Erasmus + project, with a specific focus on understanding students’ experiences. By delving into the social dimension of the online learning environment, the overarching aim is to enhance insights into the online learning experience and, consequently, improve students’ progression throughout the program. An online survey was conducted among first year’s students attending the challenge-based course on Entrepreneurial and Innovative Challenges in the field of Energy. Overall, students perceived the course and its CBL approach as a distinctive experience that significantly enhanced their critical thinking, teamwork, communication, and leadership skills compared to any previous courses. One identified issue was the availability of teachers/mentors to supervise the teams, which can seriously hinder the success of CBL approach.