Mobility, multi-locality, and transnational migration are current social developments among the population of the European Union. These social developments in society and companies, linked to the challenges of sustainability, lead to new requirements for working in the European Union. Teaching and learning in higher education needs to adapt to these requirements. As a result, new and innovative teaching and learning practices in higher education should provide competencies for transnational teamwork in the curriculum of tomorrow’s engineers in order to ensure their competitiveness in the job market and advantage in their future careers. Thirteen European students from four countries participated in a new project-based course, called the "European Engineering Team". Students focused on the development of two innovative and sustainable products. The goal of this paper is to present the thermal pallet cover, which is the result of the first one-year transnational and sustainability-oriented project. This paper also aims to present the process of performing the project. It provides the overview and discussion of engineering and management tasks that students completed in the transnational environment, working remotely at their own campuses between scheduled transnational meetings. The work contributes to project-oriented learning that may constitute a basis for teaching holistic engineering courses at mechanical and industrial engineering departments. © 2018 Elsevier B.V. All rights reserved.