Everything is Energy - Europe's Electrification Dilemma & Who Pays "Unearned Luck" #212
revisiting Europe's emergency energy package, the Hydrogen new dream, and extra industrial taxes on supply chain chokepoints
Five stories that matter this week:
Climate advocates in Europe are rejoicing, and I quote one from World Fund VC, “The Hormuz disruption is doing something that a decade of sustainability arguments never quite managed: it is making the business case for petro-alternatives impossible to ignore.” Besides this weird, joyful tone (mind you, it is a warzone with actual people dying, while millions of businesses are being affected), this is nothing close to a business-as-usual case.
Speaking of electrification, electricity is only 23% of Europe’s total energy use. The rest: transport still runs on 92% fossil fuels, buildings on 71%, and industry on 61%. Worse, in 2024, 95% of oil and 88% of natural gas used in the EU were imported. Switching from Russian gas to US LNG doesn’t fix this, given the latest developments in the Middle East. The vulnerability is structural.
Furthermore, the machines at the centre of Europe’s electrification (aka EVs, heat pumps, wind turbines, grid infrastructure, etc.) are built from critical minerals. And the supply chains for these are concentrated in a small number of countries that do not have the incentives to sell their resources to Europe easily. We break down this critical mineral supply problem in our latest premium piece, “Europe Electrification and the Critical Minerals Gap: What Is at Stake Before 2030” for those who want to see the full picture.Speaking of structural vulnerability, within a window of thirty months, the Strait of Hormuz, the Panama Canal, and the Suez Canal have all been impaired or seriously stressed. Each disruption has left quite a lasting premium on ocean freight, marine insurance, feedstock pricing, and inventory costs. The World Bank calculated that the Red Sea crisis raised shipping costs 141% by the end of 2024, which is now a permanent addition to the global manufacturing costs.
We wrote more extensively on these chokepoints and their economic implications in our premium piece, “The Hidden Tax on Industrial Manufacturing: Energy Chokepoints and What They Cost”. Inside, you’ll also find structural responses for businesses, as we believe these occurrences are no longer once in a blue moon.
Moving on to public policies, Laurence Tubiana, President and CEO of the European Climate Foundation, made an argument on April 23: a 20% surtax on the annual profits of the world’s 100 largest oil and gas companies would have raised $1 trillion since 2015. Instead, that money funded share buybacks and fossil fuel infrastructure, locking in the very dependence that leaves Europe exposed to crises. The European Commission’s emergency energy package, she says, falls short by not pursuing a “windfall profit tax” (i.e., one-time, higher tax rate levied on a specific company or industry that has benefited from a sudden, massive increase in profits without extra effort or investment of their own).
Before we even discuss the effectiveness of this proposal, we have to look at the reality: under normal EU law, any proposal involving taxation requires the unanimous agreement of all 27 member states. By the time a levy is negotiated, the profits may have already moved. The ambition is right. The execution challenge is, as usual, almost immovable.Speaking of ambitions, two stories landed in the same week on hydrogen. On April 16, Russia and China signed a memorandum to create the first cross-border “hydrogen corridor,” with plans for localized hydrogen production and refuelling infrastructure along major highways in the Far East. Days later, on April 21, UK-based startup Rivan Industries raised $34 million to build what it calls the “largest synthetic natural gas plant in Europe,” using a Sabatier reaction system that combines green hydrogen with CO2 captured directly from the air to produce synthetic methane, chemically identical to natural gas and supposedly injectable into the existing UK grid without modifications.
The Brawl Street Journal commented on the latter, “Europe’s looming fuel shortage does what pitch decks failed to do recently: revive uneconomic hydrogen fantasies. Taxpayers are on the hook, of course.” Whether this is visionary infrastructure or expensive experiments (backed by strong political will), it depends on whether the tech and the economics work.
Speaking of closing the economics, on April 22, CATL announced it will begin mass production of sodium-ion batteries in Q4 2026. The batteries have completed verification and can support roughly 300 km of range in extended-range vehicles and 500 km in battery electric vehicles. Sodium-ion won’t replace lithium. The energy density sits at about 160 Wh/kg, making them better suited for vehicles priced below 100,000 yuan (around $14,660) or for energy storage. But the performance in extreme cold is striking: at -30°C, sodium-ion delivers nearly three times the discharge power of lithium iron phosphate batteries, retaining over 90% capacity at -40°C. CATL’s chairman Robin Zeng has said the technology could eventually capture 30 to 40% of the battery market. We previously covered CATL’s expansion beyond cells into automotive chips. The pattern for China's industrial competitive landscape is clear: develop a fully vertical stack. Read more on China’s New Five-Year Plan and/or the EV race in China to understand what that means better.
Enjoy your weekend. Stay sharp, and keep building.
Anh & Tri
On behalf of the Tocco team
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Further Readings · Material & Manufacturing News · 04.2026
(Netherlands 🇳🇱) Foamlab Raises €3M to scale production of high-performance foams made from bacterial cellulose. The round was led by Icos Capital, with participation from Capricorn Industrial Biotech Fund and others.
(Global 🌏) Metamaterials - the invisibility cloak never quite materialised. What did materialise is a $2.5 billion global industry growing at over 30% a year, building from smartphone cameras to satellite antennas. The gap between the original hype and the actual outcome is one of the more interesting stories in modern materials science.
(Spain 🇪🇸) Turning Sea Lettuce into Weavable Materials in Galicia. Biodesigner Paula Camiña Eiras is partnering with traditional basketmakers to turn sea lettuce, an invasive algae pulled from shellfish farms, into a weavable biomaterial.
(Global 🎙️) The Belgian CEO who spent 20 years inside China returns for round 3 with Leon, Tocco Founder. This time: why the Iran conflict might be “the Waterloo of America,” Europe’s shift from pragmatic statecraft to what he calls “hypocrisy”, the truth about the “China threat. Available on YouTube, Spotify, and Apple Podcasts.