A windfall tax, also known as an excess profits tax, is applied when a certain industry gains higher-than-average profits from a crisis, to such an extent that those extra earnings appear “unreasonable or unfair or immoral,” says Hadrian Mertins-Kirkwood, senior researcher at the Canadian Centre for Policy Alternatives.

Prior to the outbreak of the war, Canada’s oil and gas industry was expected to make $30 billion this year in profit, according to Mertins-Kirkwood. Now profits are expected to go as high as $100 billion, resulting in about $70 billion in excess earnings. “Their profits tripled basically overnight through no act of their own,” he says.

As Canada grapples with an ongoing affordability crisis, as many struggle to afford housing, groceries and now gas, Mertins-Kirkwood and left-leaning organizations and politicians like the Alberta Federation of Labour and NDP Leader Avi Lewis argue that excess profits in the oil and gas sector could benefit more Canadians if redirected toward public priorities.

Who gains?

“These companies are making money off of an illegal war against Ukraine and now the Iran war,” Catherine McKenna, former Canadian minister of environment and climate change, told Corporate Knights at the Montreal Climate Summit on April 16. “I feel if you’re going to make those profits, they can be reinvested in a way that supports Canadians, not given back to your largely U.S.-based shareholders.”

Mertins-Kirkwood projects that Canadians as a whole are spending an additional billion dollars each month because of higher oil prices. However, Canadians themselves aren’t padding the oil industry’s pockets on a one-to-one basis, he says. Most of the oil that the Canadian oil industry produces is sold to international markets, such as refineries in the United States.

Canada wouldn’t be the first to establish a windfall tax. The United Kingdom currently has one in place, and ministers in Germany, Italy and Spain have recently called on the European Commission to implement one because of rising gas prices. That approach is not widespread, however, Mertins-Kirkwood says, because in many countries the oil industry is state-owned, so a large share of the windfall would already go to the government.

Not likely

While the Alberta Federation of Labour has urged the Alberta government to implement a windfall tax, most arguments push for the tax to be imposed at the federal level.

However, natural resources fall primarily under provincial jurisdiction, which complicates any federal attempt to impose a windfall tax, says Kent Fellows, a professor in the School of Public Policy at the University of Calgary. Further, Alberta, the largest oil-producing province in Canada, already takes royalties from the oil and gas sector, he says. “When prices increase and these firms are more profitable, the public purse gets a larger chunk of their revenues.”

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According to the Business Council of Alberta, resource royalties in recent years have generated an estimated $20 billion annually, or approximately one-quarter of total provincial government revenues in a roughly $75-billion budget. “The idea of a windfall profit tax doesn’t really make a lot of sense here because really they’d just be stealing from themselves,” Fellows says.

Mertins-Kirkwood, however, argues that a windfall tax would be applied after royalties have already been taken, so it would have no bearing on how much provinces already collect.

Another major pushback against the initiative is the idea that a windfall tax could stifle investment in the oil and gas sector. Investors take on the risk that in a low-price environment they might lose money, Fellows says. But if prices go up, they also expect to benefit. “They’re making calculated bets on that capital investment, and right now those bets are paying out.”

Leah Golob is a freelance business journalist based in Toronto.

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Throughout it all, speculation abounds that an EV tipping point approaches.

New battery-electric vehicle (BEV) registrations in Europe took off in the first quarter of 2026, rising by nearly 30% from a year ago, as the U.S.-Israel war in Iran spiked gas pump prices to levels not seen in years, Reuters reports. BEV registrations (a proxy for sales) jumped more than 50% in March alone.

Pedal to the metal on EV sales

Estimates are that more than 21% of all new cars registered in March in the European Union and EFTA (the European Free Trade Association, whose member countries are Iceland, Liechtenstein, Norway and Switzerland) were ⁠electric.

Meanwhile, the United Kingdom’s BEV market grew 12.8% in the first three months of 2026, with BEVs accounting for 22.5% of new car sales.

While high gas prices have been a major driver of BEV sales, new  and pre-existing – policy supports also played a role. “Generous government incentives” spurred the 50% year-on-year uptake of EVs in France, The Guardian reports.

That Nordic countries continue to outstrip their southern neighbours in BEV uptake – 98% of all new cars sold in Norway in March were BEVs, “followed by Denmark at 76% and Finland at almost 50%” – owes in part to “higher wages, generous subsidies, and extensive [public] charging infrastructure.”

Gas pump prices appear to be behind Italy’s full-throttle acceleration into the EV market, with that country experiencing a 65% year-on-year increase in EV sales in March.

Gas price concerns are also fuelling EV demand across Asia, with Japan – or rather, Toyota – offering a case in point. Toyota sold almost 3,500 EVs in March, “an increase of 4,117%” over the same month last year, Electrek writes.

EV tipping point ahead

“Rapid innovation, decline in cost and a rise in popularity” are all driving EV sales toward a tipping point “where uptake becomes self-propelling” and EVs “irreversibly replace internal combustion engine vehicles,” write the authors of a study published in early December in Nature Communications.

A combined effort by researchers from the University of Exeter, the University of Macao and the World Bank, the study found that even as the sale of gas-fuelled vehicles began to decline in 2019 (the study period ran 2016 to 2023), EV plus hybrid sales increased exponentially, with the global fleet doubling every 1.5 years. Sales in the European Union doubled every 1.3 years, while China saw EV plus hybrid sales double every year. “Our data and analysis provide evidence that several European markets and China have begun tipping towards EV dominance, although this is not convincingly the case for the U.S.,” the research team writes.

But a degree of uncertainty about the timing of the shift remains, even for strong EV markets. “Once investment is sunk into converting production lines, a return to [internal combustion vehicles] becomes comparatively expensive, irrespective of the oil price,” they write. The “imposition of new tariffs” remains the wildcard, they warn.

All eyes on China

Your average EV battery contains four basic components: the cathode (some combination of metals, often including lithium), the anode (typically graphite), the separator that keeps cathode and anode from touching explosively, and an electrolyte solution. As Bloomberg explains, China corners the market on all four.

It is also leading the charge on battery innovation. China’s latest iteration of its lithium ion phosphate battery now rivals its far more expensive kin, the nickel manganese cobalt battery, in energy density. According to its makers, the lithium ion phosphate battery can recharge “in about the same amount of time as it takes to refuel a gas car.”

China’s battery innovations extend far beyond improving the lithium ion phosphate one, however. Chinese battery-manufacturing giant CATL has just made public “six stunning new battery technology innovations, including an electric vehicle battery with driving range of up to 1,500 kilometres and the third generation of its Shenxing Superfast Charging Battery that it says can charge from 10% to 90% in six minutes and 27 seconds,” Zecar reports.

And China’s pre-eminence doesn’t end with batteries: Momenta (autonomous driving), Huawei (super-rapid-charging EV systems, among other things) and Alibaba (“intelligent cockpits”) are all headquartered there.

Meet the 2026/2027 BMW iX3

Western automakers have lost huge amounts of ground in China as new domestic highfliers like BYD seize market share. Western brands like BMW and Volkswagen held just 32% of the market this year, down from 64% in 2020, the Financial Times reports.

BMW is among those seeking to regain traction in the huge Chinese market, and it is doing so through direct collaboration with its hosts. Enter its BMW iX3, an electric sport-utility vehicle equipped with a CATL battery and the latest technology from Momenta, Huawei and Alibaba.

While Germany’s second-largest auto manufacturer intends to sell the iX3 abroad, it is also laser-focused on the domestic Chinese market. “Developed ‘in China, for China, and with China,’” the iX3 “has been deeply localized for China,” BMW states in a January release.

“Tailored to local traffic conditions and usage scenarios, the system is designed to deliver highly capable driver-assistance functions optimized for complex urban environments, highways, and long-distance travel in China, further enhancing safety, comfort, and driving confidence,” the car manufacturer adds.

Volkswagen – Germany’s largest car manufacturer – is also looking to collaborate with China. VW “plans to launch 50 plug-in hybrid and EV models in China by the end of the decade to rejig its petrol-heavy lineup with vehicles designed and engineered locally as part of its ‘in China for China’ strategy,” the Financial Times reports.

This story was originally published by The Energy Mix. It has been edited to conform with Corporate Knights style. Read the original story here. 

Gaye Taylor is a staff writer for The Energy Mix. She is passionate about showcasing what individuals and communities are doing to advance climate solutions, in Canada and around the world. 

The post EV sales in Europe and Asia soared following the start of the war in Iran appeared first on Corporate Knights.

We already know the headline facts. The wars in Ukraine and Iran are producing emissions on the order of a mid-sized industrial economy. The scramble for energy and resources helped set the stage, and the destruction of pipelines, depots and power stations has become a recurring spectacle. Analysts have tallied the greenhouse gases, the poisoned soils, the bombed substations and the forests turned to smoke. Less discussed is what this means for the energy transition itself: every tank, missile and drone is built from metals and fuels we also need for wind turbines, batteries and resilient grids.

Every tonne of copper that ends up in shrapnel rather than in wires, every kilogram of lithium that ends up in loitering munitions rather than stationary storage, slows the transition and deepens climate risk for everyone, including the supposed winners. When we choose war, we are not just adding to the climate problem; we are cannibalizing the solution.

Here we face a fork in the road. One path is to treat transition minerals as the new oil: strategic assets to be hoarded, weaponized and fought over. That path is already visible in export controls, trade extortion and a growing list of violent incidents and community protests around mines in the GlobalSouth. The other path is to treat them as a global lifeline for common security, with shared stockpiles, transparent reporting, producer countries as real partners and apolitical norm that the first call on these minerals is decarbonization, not escalation.

Modern warfare also confirms, in the harshest possible way, the old principle that shows up in all the great religious traditions: what you do unto others, you do unto yourself. In a tightly coupled Earth system, the effects of our actions propagate through food webs, supply chains and the atmosphere. When a refinery or gas pipeline explodes, the carbon doesn’t check passports on the way up. When artillery fires shell after shell into fields, the contaminants do not ask permission before entering rivers and crops. Thermobaric weapons suck oxygen from the air and generate firestorms; forests and towns burn, releasing greenhouse gases and black carbon that darken ice and accelerate melting thousands of kilometres away. High-precision missiles and drones can target power plants and transmission lines with uncanny accuracy; the replacement steel and concrete, when they eventually arrive, carry their own enormous carbon price tag. In Ukraine, war-related emissions are now estimated to exceed the emissions from all of the country’s civilian sectors.

And yet, from a certain narrow corner, war looks like a success story. Defence budgets climb; order books for missiles, shells and air defence systems fill; share prices rise. Headlines announce record revenues for the world’s largest arms makers. If your horizon is the next quarter and your constituency is shareholders, war is indeed “good for business.”

Should governments that proudly report power-sector decarbonization be allowed to keep military emissions off the books?

But that business model is parasitic on the larger economy and on the biosphere. War destroys infrastructure, scares off investment, shreds trade links and forces governments to divert money from health, education and decarbonization into replenishing stockpiles and repairing damage. It also burns through critical minerals that the low-carbon economy will need for generations.

Militarization is itself a threat to our security and that leads to some uncomfortable but necessary questions for business and finance. Should climate-aligned investors treat defence exposure as compatible with net-zero strategies, given what we now know about war’s emissions and mineral demands? Should governments that proudly report power-sector decarbonization be allowed to keep military emissions off the books? Should critical-mineral off take agreements be judged only on price and supply security, or also on whether they prioritize uses that reduce net global risk?

My father’s line about there being no winners in war was, in its way, a statement of planetary accounting. In the 21st century, with the atmosphere full and the mineral supply tight, any war anywhere threatens states and markets everywhere, and the thin atmospheric envelope that makes any kind of economy possible at all.

 Ralph Torrie is director of research at Corporate Knights.

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