Hello. Good afternoon or good morning if you are in the North America, and good evening if you are in Asia. And welcome for our Investors Day, I would say, today and tomorrow. This is the first day. It's a special one.
As we've done last year, it will be dedicated to share with you the vision that TotalEnergies As of the energy landscape and with our publication today of our Energy Outlook 2021. And as you know, this session is special as it is open not only to investors, but we have also some media who will follow us this afternoon. As you know, since we met last year, We changed our name to Total Energies. We changed our logo. We have reaffirmed a clear strategy to build a multi energy company.
And that's why we think it's important that we contribute as a responsible player to the debate around energy, the energy transition and climate change. This year, we have taken a new initiative, which is not only to update and you will see there is Quite an update because this energy world is moving quickly to update our energy outlook 2021. But we have also taken another initiative, which is to publish a new report About the energy landscape, which is a report written in collaboration with Capgemini and Colette Leviner, an energy expert, well known in France. In order to describe, I would say, the worldwide energy system, The energy debate is quite complex, primary energy, secondary energy, supply, demand, Many possibilities and the more we go into the transition, the more we open different options for this evolution of the energy system. And we will through this report, we will Try to we hope to contribute, I would say, to install the debate about the future of energy on solid basis.
So Helle will introduce you to this report, which will be available to you on our Internet site in French today, in English tomorrow. And so you will be able to learn all what you want to know about the energy by reading these reports. I'm sure there will be so many questions about it, but it's, I think, a Strong contribution so that we can have this debate on solid basis. The second report that we are publishing today, You begin to be accustomed to that. It's the 3rd year that we publish it.
It's a Total Energy Outlook 2021, where if you follow us quickly, we have 2 scenarios, momentum and rupture. The momentum Being, I would say, as Helo will explain you, in line with, I would say, the policies which are published and committed by the various countries around the planet. And since last year, of course, a number of countries declared their ambition get to net 0 by 2,050 or 2,060. And the rupture scenario is a scenario with fitting in line, I would say, meeting the target of the Paris Agreement to have a temperature elevation well below 2 degrees compared to pre industrial era. So Helle will I will leave the floor to Helle now, and I hope that You will enjoy this presentation.
It's a little long, so you will learn a lot, but Helle will do it with It's dedication and patience. And after that, we'll have a Q and A session where we will first take the questions from the investors and then the question of the media. For the media, just let me clear, We'll answer today it's not a press conference on any topics. It's a session which is dedicated to share with you the vision by Tel Energies for energy landscape, the present and the future. And so questions should be concentrated on this topic.
But before I would like to give the floor to Helle, of course, like in all session with Total Energies, we'd like to introduce This meeting for a safety moment.
Good afternoon, everyone, or good morning if you are in the U. S. Or elsewhere. And again, a very warm welcome. So we're going to start this afternoon with some highlights from the energy landscape.
As Patrick told you, the idea behind the energy landscape is to share some facts and data About the current energy sector so as to set the stage for the ongoing energy transition. So sharing knowledge and insights. We're covering simple stuff and quite complex matters. And my chart this afternoon are not at all a summary of this handbook. So if you are interested, again, don't hesitate, go to our website and download it Since it is available in both England and French.
By way of an introduction, This is our shared sustainable energy challenge. Number 1, ensuring a reliable, affordable, accessible energy supply For a growing world population. Number 2, protecting the planet and its inhabitants from the adverse effect of greenhouse gas emissions And their impact on climate change. Now why is that a challenge? Well, because By all considerations, the world population is widely expected to grow to 10,000,000,000 people 30 years from now, up from Roughly 8,000,000,000 people today.
And as you can see on this chart to the right, the world GDP and energy demand Have grown over the last 50 years more or less in sync with population growth. Carbon emissions linked to energy that are showed in the little gray boxes also to the right. These emissions have gone up So from 15 gigatons in 1970 to 33 gigatons in 2019. We cannot continue like that. Our societies must find a way to reconcile population growth and prosperity With a massive reduction in CO2 emissions.
Starting now with energy supply. Energy supply is generally split into 3 families. Primary energy, meaning energy resources available From the nature, from nature. And that's at the bottom of the chart here. Then secondary energies Requiring some form of man made transformation, refined oil products, for instance, or power.
And finally, energy for final use, the top of the chart here, which is broken down to the kind of things we do with the available energy. Not everybody knows this, but you all do. 80% of the world's energy supply still relies on greenhouse gas emitting fossil fuel resources. This dependence is not sustainable. We must increase the share of other sources of energy.
One highlight we wanted to share with you all relates to energy value chains. So how we are moving from primary energy to secondary energy and then to final end use. What you see here is exactly that moving from left to right. We are showing 2 examples of 2 energy value chains. At the top, two examples for electricity, electricity made from the sun, photovoltaic and electricity made From gas via the liquefied natural gas value chain.
To the bottom, we are showing 2 chains for hydrogen, Hydrogen made from natural gas, which is gray hydrogen and green hydrogen, which is made from renewables, renewable power. I know the chart is crowded. And don't worry, if you're interested by this topic, again, there's much more on it In the full report. In both cases, for similar end use, the number of transformation steps It's very variable. You can see that at least from the crowded chart.
The longer the production change, the greater the potential losses And therefore, the cost. On the other hand, some of the longer value chains emit much less greenhouse gases. So there is a trade off here. As an example, green hydrogen to the bottom of the chart It's much better in terms of emissions and gray hydrogen. There's virtually no emissions when you do green hydrogen.
But the value chain yield today is very low, meaning that it's costly, and therefore, green hydrogen is not at all consumer ready at scale Today. So innovation in these kind of production value chains is going to be extremely important going forward. And as a chart building on exactly the same idea. Here, you see the performance yields Of 3 kinds of vehicles, broken down between the efficiency at the full production level and at the level of the engine or battery, the so called tank to wheel efficiency. And the overall efficiency of given chain is simply the multiplication of 1 by the other.
What the chart shows is that the thermal cars, internal combustion engine cars that the world uses today are in fact highly, highly inefficient. And that's primarily due to the internal combustion engine. The overall efficiencies you can see is only 20%. But the current hydrogen based fuel cells, and that's to the bottom of the chart, Those cars are not very efficient either, 22% overall. On the other hand, battery based electrical cars in the middle of the Chart, you can see that they are extremely efficient at 73%.
So that's one good reason to push for EV car adoption. We avoid energy losses. And in fact, electrification is a major trend In the energy sector, not only in transport. So decarbonization is underway, And electricity is a main enabler. This, again, therefore, implies that power must come from low carbon sources.
And indeed, low carbon electricity is at the core of numerous net zero carbon emission oriented policies around the world. That's for the good news. What the chart here also wants to convey is that the less exciting news is that it takes time. Solar and wind electricity have increased close to 10% per annum over the last 30 years, But they still only represent roughly 10% of the overall global power mix. So we have a long way to go still, And actually, we need to accelerate.
The magnitude of change that is needed varies country by country, as you can see to the right, Because the starting point, meaning today's energy electricity mix country by country is very different. One word on Power Systems. And again, this is a crowded chart, I know. And Go to the full report if you want to really understand the messages. But there is one key thing to remember, which is not too complicated.
And that is that power generation and power consumption must be balanced at any point in time. To the right, today's power systems are built upon schedule and manageable power capacities that come online to match Demand, knowing that demand varies intraday, intraseason and so on. These capacities are known as base loads, and they are always running, Intermediate loads and peak loads. The massive introduction of intermittent renewables, meaning solar and wind, Has a systemic impact on network balances because by definition, these renewable energies are not as predictable and reliable as all the sources of power. Our power systems need to adapt for that.
Going forward, mitigation will come from building more storage capacity, building or maintaining intermediate and peak load Capacities. And also from working with customers on demand response. But let's be clear. Today, we can't power a hospital with wind and solar electricity. They must be complemented by some form of firm power, Reliable and predictable power.
Gas can play that role as was recently decided in California, for instance. To wrap up on Energy Supply. The chart here summarizes the main characteristics To consider when we compare energy. We all do that all the time, but not always on a solid basis. We've listed here 7 key dimensions to consider, and I'll read them because it's important: energy density, Energy availability or abundance, energy predictability or reliability, the impact on the electricity networks, Other forms of externalities, typically emissions, both CO2 and methane, for instance, corrective measures That can help on the negative externalities.
And then technology maturity. For illustrative purposes, we've then, on the Collins here tried to compare oil, natural gas and intermittent renewables against solar and wind. The takeaway is that comparison are not at all straightforward. As you can see, these different energies score differently On each of the seven criteria. We have not added cost on the table because if you want to do a good job on cost, then you have to put a Price on emissions on carbon and methane on one side and on the negative impacts on the networks electricity networks on the other side.
So there's much more to be said on this topic of comparing energies. And again, if you're interested, we've dedicated a full chapter to that In the report. Just one other comment. Footprint of different energies is also to be considered. The footprint is linked to the density of the energies and to the engineering characteristics, which in the end boils down to planned production Yield.
It's illustrated here in terms of square meters of land needed to power 100 watt flat TV screen. You don't see oil on the chart because it's not really a good way to use oil to produce power. So hydro, of course, is a little specific because it's not at all modular. But what you can see here that for the same amount Of power, the land use required for wind or solar is way, way bigger than the square meters Needed for a coal power plant, a nuclear power plant or a gas power plant. And this is a way of showing why There are acceptability issues linked to wind and solar.
Not everywhere, but in Europe, for instance, it is a mounting issue that has to be overcome. So now a few words on energy demand. Where does it come from? I think we all know this. Energy is central to human life.
We use energy every day to move around, to make stuff in the industry, to heat and cool buildings and homes, to put the lights on and more and more importantly, to communicate. When energy is plentiful, its consumption mix Tends to vary according to end use. This is illustrated to the right for countries in the OECD. Specializing energies according to the end use for which they are the most efficient, so optimizing usage and mix, is one of the levels for a successful energy transition. But of course, that comment is not relevant If all the energy you have comes from traditional biomass, for instance.
What you see here now is the evolution of energy demand over the last 20 years per geography contrasting The evolution of energy demand in developed countries, OECD, and non OECD countries. The obvious thing is that energy is grow energy demand is growing very fast in non OECD countries, and it is virtually flat and is Probably going to be down in the future in the more developed countries. 1,000,000,000 people today do not have access to electricity. And for a lot of the non OECD countries, access to energy is simply a prerequisite for their development. So people are not equal when it comes to energy.
The chart here shows the 2018 consumption per capita In megawatt hours. What you can see is that Saudi per capita consumption is very close to the one of the U. S. France is behind, But then much, much higher than India or Kenya, for instance. This energy consumption level is a direct function of energy access End of living standards.
Hence, the need for a just and inclusive transition, meaning enabling The energy demand per capita to go up in non OECD countries while we decarbonize. Given that energy consumption varies region by region, countries are not equal either when it comes to emissions. To the left here, you see the top 7 countries or regions in terms of emissions in one given year. In this case, it's 2019. So China is first, followed by the U.
S, European Union and then comes India, Russia, Japan and Germany. Not really surprising, of course, when you factor Population sizes. So to the right, we are showing the same ranking, but in terms of emissions per capita. This data is a little less well known. I will let you review it, and you may be surprised.
And now the much more important picture, which is a comparison of the 10 largest CO2 emitters worldwide over the last 40 years since 20.71, so a little more than 40 years. So that's in cumulative tons of CO2. Close of half of those cumulative tons come from us in the Western world, 25 from the U. S, 22 from the European Union. And developed countries have thrived without any constraint On greenhouse gas emissions, developing and emerging countries will need help to grow without following that same path.
And this is the top, top of the agenda of the upcoming COP26. It also takes us back to where I started, our shared sustainable energy challenge. We all have a role to play for a successful transition. And we know what to do, which is summarized on the chart here. Avoid emissions, reduce them, compensate them, Meaning compensate residual emissions when everything has been done to limit them to the strict minimum level Via avoiding and reducing.
And then the 4th driver, which is innovation. All these drivers are effectively at Play in the modeling work that we have done in our energy outlook. So now I propose that we switch to the 2021 energy outlook From
Total Energies.
So moving on to the outlook. As a reminder, our energy outlook only focuses on energy demand And looks at how this demand may evolve over the next 30 years, so out to 2,050. Last year, the European Green Deal was one of the highlights of our outlook. As Patrick began to explain, this year, One key modeling driver is that many more countries have joined the net zero race with carbon neutrality pledges For 2,050, sometimes 2,060, which is great news for all of us, of course. We assume that these pledges will be delivered.
And we have accounted for that, therefore, in our 2020 Energy outlook. So like last year, we've modeled 2 demand forecast scenarios To 2,050, with 2 really completely different methodologies. Momentum is a forward looking scenario Based upon the decarbonization strategies of the net 0 fifty countries, and that's what I'm going to call the countries that have pledges To reach carbon neutrality net by 2,050. And they are shown on the map to the in green to the left. Momentum also takes into account China's goal or ambition to reach net 0 by 2,060.
And this is why it's only partially green on the map to the left. For all other countries, momentum considers the announced pledges And nationally defined contributions. Momentum, because of these assumptions, goes way beyond the business as usual scenario and results in a 2.2 to 2.4 degree increase in temperatures by 2,100. The second scenario, rupture, has been built with a backcasting approach using the IPCC emission scenarios. It has 66 percent probability of it being well below 2 degree.
So rupture is a template for what needs to happen to be in a well below 2 degree world instead of a 2.2 or 2.5 degree world. And we've added to that, at the very end of my presentation, a sensitivity on the additional efforts required To reach 1.5. So elaborating a bit on this framework, The key assumptions for momentum include a complete internal combustion engine sales ban By 2,035, in all the net 0 50 countries, and that's a major assumption. And when we say internal combustion engine Ban, sales ban, it applies both to light duty vehicles and to heavy duty vehicles, meaning trucks. It also assumes a global acceleration of the transport revolution revolving around electrification And increased penetration of hydrogen and hydrogen based efuels.
It assumes a broad electrification also of end use In Industry and in the residential and commercial sector, which I will call Rescom. All of which It's a massive feedback loop on additional power demand and therefore, on need for many more renewables. Beyond that, momentum assumes a widespread use of natural gas as a transition fuel, especially in Power and Industry, Much more than in transport, and we have much less gas in that transport segment than last year, for instance. Gas is also used as feedstock for blue hydrogen. On plastics, we've modeled a ban on single use plastic, SUP, by 2,040 For the net 0, 50 countries in China, and we've also increased recycling rates versus last year.
China reaches 60% decarbonization by 2,050 and its emission peak somewhere in the middle of the year 2020. The macro backdrop for momentum is shown to the left here. It's 3% GDP growth per annum until 2,050, And it results in a 0.5% growth per annum for energy demand. In rupture, GDP is unchanged, But Energy only grows at 0.3% per annum, which helps reach the well below 2 degree target. The important difference of rupture versus similar well below 2 degree scenarios is that energy demand is up and not down.
I insist on that. Other than that, to go from momentum to rupture, the key drivers are the extension to all developing and emerging countries Of the decarbonization policies and technologies implemented in the net zero of 50 countries. This raises, of course, a question of how do you do that and who pays, meaning are the richer countries Ready to fund the energy transition beyond their borders. The next chart elaborates on that Question, talking about population growth and need for energy in developing countries, but we've already covered that in the energy landscape, so I will skip it. Now how to curb emissions?
To curb greenhouse gas emissions, we need to know where they come from. Acting on energy is paramount because it's shown on this chart. More than twothree of global greenhouse gases, meaning CO2, methane and so on, They are energy related. To the right, you see the breakdown of energy related CO2 emissions. Transport and power sectors are the main contributors and therefore top priority sectors to decarbonize.
And this is what we've done in our modeling work. So how do we decarbonize? How to be on this Energy transition pathway allowing for more energy on one hand and less emissions on the other hand. The common themes and takeaways from Both scenarios are listed here, and I'll read them quickly. It is that we have more energy, so growing energy demand in both scenarios.
Oil plateaus before 2,030 and then declines. Gas remains a key enabler of the energy transition, especially in Power and Industry and also blue hydrogen, as I said. Liquids and gases become greener and greener through decarbonization. Electrification is absolutely key. And actually, we've modeled a pretty radical electrification, including in the transport sector.
And therefore, there's also going to be an increasing need for storage. As we electrify, we need to electrify on low or no carbon, and therefore, renewables Play a key role in both scenarios. We have increased our outlooks for hydrogen, And the penetration is much higher than last year, both in Industry and in Transport. And then finally, and you know this, We believe that carbon sinks, be they man made through carbon capture and storage or nature based NBS, Carbon sinks are absolutely mandatory for the net zero journey. The next chart here Shows what you would call the key decarbonization drivers from our model, per sector final demand, and then we've also added Power to the very right.
So we've listed a number of decarbonization drivers and try to qualify You know how important they are. So the impact level has been either low, medium or high. This impact level It's been assessed in terms of technical and economic maturity of each driver and also its readiness to be deployed. I'm not going to cover everything. But just if we go by column quickly, what do we have?
What you see is that Energy Efficiency and Recycling Our major drivers for industry. In transport, if I only to mention one driver, it's clearly electrification. For the residential and commercial sector, RESCOM, Electrification and Energy Efficiency are key contributors. And finally, for Power, the 2 most important drivers are switching away from coal to gas, Adding in CCS, if possible, and increasing solar and wind deployments together with storage to mitigate the impact of these intermittent renewables. We've also summarized the key modeling assumptions are 2 scenarios because we did that last year.
It was something Some of you really liked. So you have that chart again. I'm not going to comment it. And we've actually covered most of what it says in here. So now I'm going to move to momentum.
I'll cover 3 themes. The key energy transition levers, those that are listed here. So what's going on in transport? What about clean hydrogen? And what about related huge Power demand.
Secondly, I'll show you some charts wrapping up momentum, and then I'll zoom in on the net 0 50 countries because I think that's really important. The units are in petajoule per day. I hope you're familiar with conversions. Otherwise, the energy landscape gives you the right formulas. Starting with electrification in transport.
Here, you see the evolution of energy consumption, the light duty vehicle segment That actually accounts for roughly half of the CO2 emissions of the transport sector today. The thermal car and truck Sales span in 2,035 in the net 0 50 countries accelerates EV and fuel cell penetration So that in this segment, those technologies reached 67% globally by 2,050. And that is actually 100% in the net 0 50 countries and 90% in China. You can see to the right, the substitution of oil To the left, the substitution of oil is not so spectacular in 2,030, but then really Accelerates after 2,030 and becomes pretty impressive by 2,050 since oil falls below 50% Of the light duty energy mix. For heavy duty trucks, Close to 30% of today's transport emissions.
Both electrification and hydrogen based fuels contribute to the decarbonization. This scenario, if you go back to last year, is very different from we had in 2020. Clean hydrogen based solution here refer to both Fuel cell and efuels, meaning green hydrogen combined with carbon molecules. To the right, you see the decarbonization traffic Assumptions that we've used, so this is in kilometers per year for the 2 subsegments of urban heavy duty and long haul heavy duty. The degree of decarbonization is not at all the same.
It's much higher in 2,050 for the urban trucks and for the long haul trucks. And the energy mix is not the same either, as you can see. Moving on to Aviation and Shipping, Respectively, 13% 10% of transport emissions. The main message is that the jury is still out On which low carbon fuel options will eventually prevail in those markets. In Aviation, it will be difficult to do without liquid fuels In the coming years due to density needs and storage constraints.
Our scenario here assumes penetration of biofuel and hydrogen based Fuels, so again, efuels combining green hydrogen and carbon. In the marine sector, LNG moving to bio LNG will a part of the mix for a while, together with some biofuels and probably a lot of fuels derived from clean hydrogen, including e methanol And in ammonia. That was for transport. Now our second accelerating decarbonization driver, which is clean hydrogen. I already started covering that, of course, as I spoke about transport.
Here you see to the left The overall use of clean hydrogen per sector in 2,050, and 30 contrasted with today. This picture is also very different from what we had last year. In 2,050, the use of clean hydrogen It's 4 times bigger than today, knowing of course, and today, we have no clean hydrogen and the hydrogen we have is gray, so it's emitting CO2. In other words, hydrogen stops being a tiny niche market and sees demand picking up in all sectors, Especially in transport and in industry. Also to the left, we show the split between green and blue hydrogen, And that's roughly twothree onethree.
Blue Hydrogen helps kick off the market at scale, pushes up demand for natural gas, as shown here And requires roughly 1 gigatons of CCS. And then to the right, what's the impact of green hydrogen? Well, we are highlighting the massive need for future power linked to green hydrogen production. Green hydrogen makes up close to 15% of power demand in 2015. If we add in transport And it's electrification.
Roughly 25% of 2,050 power demand comes from sources, Sources of demand that do not exist today. In terms of growth, in power demand between today and the next 30 years, Hydrogen and transport represent roughly 45% of the increase. And in momentum, the overall power demand is up Some 2.5% per annum over the next 30 years. So what about power generation to accommodate for this increase in demand? Generation more than doubles By 2,050, with solar and wind making up 85% of new capacities.
Gas is the only fossil fuel to grow in the power mix due to its key role in coping with intermittency and demand seasonality. To the right, you see our assumptions in terms of gigawatts of solar and wind. The capacities are multiplied by 10 In 30 years, the share dedicated to the production of green hydrogen is higher than today's solar and wind capacity. So it's massive. In addition to baseload capacities, an estimated 1500 gigawatts of battery based Storage will be needed in 2,050 to ensure firm power delivery.
Green hydrogen can also do the job or help Do the job as electricity storage. Moving now on to the summary of momentum. Here are the main decarbonization highlights of momentum through now, 1st, total final consumption. Total final consumption grows steadily at 1.5% per annum. You see the mix to the left.
The messages are: 1, electrification. Power becomes the number one source of final energy in the early 20 40. 2, mix diversification. Decarbonization entails many more choices and adoption of low carbon solutions. 3, Decrease in oil demand.
Oil is down because of everything we said related to transport and due to the single use plastic bans and recycling of plastics. The sector to the right, you see that the sector final demand that decarbonizes fastest is transport, And that is also a highly emitting sector. Power is not there because it's not considered a sector of final demand, in case You wonder. We've seen the growth in Power and Renewables, but what about oil and gas? The chart here is in BCM to the left for gas and in 1,000,000 barrels per day to the right for oil.
In momentum, natural gas demand grows Roughly 1% per annum. This CAGR is driven by Power and Industry and Blue Hydrogen. For oil, Demand peaks in this decade with a decline of 1.9% after 2030. And we added that number to the chart here because we'd like to just remind everyone that this decline It's well below the natural decline of existing oil fields. It stands more at minus 3% or minus 4% per annum.
Oil ends up at the level of 64,000,000 barrels per day in 2,050 in momentum. Final chart on momentum. Here is a wrap up in terms of primary energy demand and CO2 emissions decline. The net 0 50 countries do take us a long way when it comes to decarbonization. And again, it leads to a world in a 2.2, 2.5 Great scenario.
On the other hand, today's net zero pledges are insufficient to reach global carbon neutrality. We need many more countries to join in, which is one of the key topics, again, for COP26. In momentum, The residual CO2 emissions stand at 24 gigatons, and that's net of 3 gigatons of CCS. Now let's take a closer look at these net 0 50 countries. I think it's really important to show How they play a pioneering role in adoption of low carbon energy solutions.
They are modeled the same way in momentum and Since they are net 0 in both scenarios. These countries, as shown on the chart here, represent Plus or minus 10% of the world population. Their share in global GDP goes down over the next 30 years from 41% to 28%. And their share in global energy demand drops from roughly onethree to 20%. And that's, in fact, why their net zero strategies are both absolutely Critical to fight climate change and far from being enough.
So here is a Total primary energy demand evolution in these net zero countries. We are talking about OECD countries. So energy demand is down By 0.9 percent per annum, helped by energy efficiency and deep electrification. And this contained energy demand in these OECD countries leaves room for economic development and improvement in living standards In the rest of the world. The primary energy mix is highly diversified, as you can see to the left, with gas keeping its role.
I'll come back to that. The share of fossil fuels goes from the 80% of today that we talked about in the landscape to 33% In 2050. Coal is out. Moving to the transport sector. The net 0 50 countries are at the forefront of the so called transport revolution.
With the internal combustion engine sales And in 2,035, the fuel mix is, of course, evolving extremely rapidly even by 2,030. And oil, as you can see on the chart here, is almost gone in that transport segment in 2015. The steep penetration of alternative fuels is also visible to the left. And alternative fuels means power and H2 based fuels, fuel cells and efuels. And you can see here how that penetration is very different between all of the worldwide countries Just the net 0.50 countries that's shown to the right.
Now we come to power demand. Electrification is massive in all It is reaching 45% of end user demand in the net 0 50 countries, way above momentum, which stands globally at 30%. Green hydrogen and transport make up close to 40% of power demand in 2,050, and that's Versus 25% in momentum. 80% of new power demand is linked to these 2 sectors, so transport and green hydrogen. Again, that's what it says to the right.
And I will move on and talk about the consequences for power generation. The resulting picture is a huge increase, of course, in solar and wind capacities that make up 60% of the power mix in 2,050 Versus 48% for the whole world in momentum. An important assumption that we've used is that the U. S. And European power grids are almost carbon free by 2,035, in line with the stated government goals.
The grid stability and resilience is maintained, thanks to gas with CCS, nuclear, hydro and batteries. So coming to gases demand in the net 0 fifty countries. As you know, we firmly believe that gas has a pivotal role to play in the next decades as a reliable and affordable transition fuel That will become greener and greener. And this certainly applies to the net 0 50 countries also, at least for four reasons. There is plenty of coal to substitute in these countries.
The power grid needs a baseload fuel, given the high penetration of Costs in the power networks. Gas is going greener and greener in these countries. And then gas is also needed to produce blue hydrogen. In the scenario we have here, 50 percent of gases energy is green, including biogas and Green, blue hydrogen and so on. And half of the remaining natural gas is abated via CCS, and that's used mainly in the power sector and in the industry.
Overall, threefour of gases are decarbonized in the net 0 50 countries in 2015. The chart here summarizes then the CO2 emissions pathway for momentum and look to the right here And for the net 0 fifty countries. The contrast is stark, of course. We have assumed 2 gigatons of CCS in the net 0 fifty Countries out of the total 3 gigatons for the whole world in momentum. So the net 0 50 countries also lead the way In deploying and using CCS technology.
Carbon pricing is one of the market signals in those countries that can And we'll enable that. As you can see to the left now, CCS begins to play a visible role after 2,030, and that's a pale Shaded areas on the chart. To get rid of the residual 1 gigaton of emissions by 2,050 Will require nature based solutions or a breakthrough in other technologies to remove carbon, such as direct air capture, for instance. That's all I had to say on momentum and the net zero countries embedded in momentum that are also modeled in rupture. So I will now move to rupture.
Again, by construction, rupture is a well below 2 degree scenario, assuming somehow that the whole world Follow suit on the decarbonization implementation plans of the net 0 50 countries. I will start with all the final consumption, And then I'll move forward sector by sector and then with primary energy demand. So here comes rupture's final total final consumption. Rupture assumes an even faster worldwide electrification Than in momentum. Power becomes the number one source of end use energy by the mid-two thousand and 30s and not in the early 2000 and 40s.
It's here in the overall mix is much higher than all the fossil fuels combined by 2,000 and 50%, roughly 40% versus 30%. And then the three contributions in the final consumption mix of Hydrogen based energy, bioenergy and natural gas, these three contributions end up being very similar as you can also see on the chart. To the right, you see how transport and industry experiences massive drop in their CO2 emissions. And Residential and Commercial is only slightly behind. So that's for total final consumption.
The chart here contrasts power demand in rupture with momentum and will today. Rupture relies on a power sector that is 2.5 times bigger in 2,050 than it is today. And it requires 20% more power than in momentum. Electricity for green hydrogen, and you can see it on the bar charts here, contribute roughly 20% Of power demand in 2,050. And that's 50% more than in momentum.
The associated need for wind and solar To the right is staggering. Every year between now and 2,050, every year over the next 30 years, The world has to add all of the existing installed solar capacity or all of the existing installed wind capacity because those Two bases are actually very close. This will also require, of course, massive storage solution, again, be they battery based or green hydrogen Or some other new technology that will be invented. The resulting power mix comes very close in rupture to the one we talked about for the net 0 50 countries. But here again, we're talking about the whole world.
You see to the right how the power sector intensity goes down, how the carbon intensity, sorry, goes down. It's already almost halved in momentum, and it comes close to 0 in rupture. Solar and wind to the left represent 100% of the global net increase in Power by 2,050. Achieving this Effectively means removing capacity, changing the mix, and therefore, effectively means rebuilding entirely the world's power systems over the next 30 years. The chart here summarizes the contribution of clean hydrogen to this well below 2 degree world.
The main use of clean hydrogen is in transport and industry for such industries such as steel, pet cams, cement and so on. Total clean hydrogen demand exceeds 400,000,000 tons in 2,050, and twothree of that is green. Honestly, the orders of magnitude of power and gas needed to achieve this amount of clean hydrogen 30 years from now, These orders of magnitude are very difficult to apprehend, I think. So we've tried to give you some benchmarks in the charts here. Electrolysis capacity, that would require 2.5 times the current solar and wind capacities.
In terms of power needed for clean hydrogen, we're talking about the current power demand of China And the EU, 29 countries, and so on and so forth. I'll let you read the details. Of course, scaling up hydrogen at this level also assumes that we can cost effectively scale up Electrolysis on one hand and CCS on the other hand for blue hydrogen. Zooming in now on the final demand per sector. And I'll go a little fast, Just hit the headlines.
In transport, Rapture assumes that the ongoing transport revolution in the net 0 50 countries in China Extends to the rest of the world. Non oil alternative fuels reach more than 50% of penetration in all the sub Segments that are listed to the right here. So both in light vehicles, fleet, of course, but also in heavy duty and in aviation and in marine. Biofuels helps decarbonize the remaining liquids, so the remaining use of oil. In industry, deep decarbonization actually hinges on multiple avenues.
They're all listed to the left here, coal to gas switch substitution and switching whenever possible and then Gas to electricity, switching to hydrogen whenever that is feasible, massive CCS deployments and recycling both of New materials and of scrap materials sorry, only of scrap but also of plastics. The winning recipe is clearly a combination of all these alternatives when it comes to industry. To the right, we focus on pet cams and the related oil demand, Which is down 40% in 2,050 versus today in rupture and down 20% already in momentum Due to the recycling assumptions and to the fact that in rupture, we have a worldwide single use plastics ban going on. In the residential and commercial sector, final demand is almost flat, as you can see here, Between now and 2,050. How is that?
Well, it's thanks to the strong energy efficiency gains, building refurbishment and new standards For new appliances such as lighting, cooling, heating and so on. The Rescom Electrification ends up very high at more than 60 Sand in rupture due to the link between urbanization and electrification, and that's shown to the right. As there is a massive trend going on in the world to increase urbanization that helps drive electrification in the residential and commercial And so effectively, a lot of power in the Rescom sector on one hand And flat demand linked to efficiency and standards on appliances and building. In fact, decarbonization in this area It's less a technical challenge than a socioeconomic challenge because very often, if I talk about households, Those families whose homes need most refurbishing for energy efficiency purposes can hardly afford it. And this is true in non OECD countries, but it's equally true in many households in our own OECD countries.
Coming to the world gases demand in rupture. In our scenario, well below 2 degree Well below 2 degree world still uses gas as energies. The 3 main sectors being to the left, Powergen Industry and production of blue hydrogen. If you see to the right, more than half of all the gases demand is Fired by green gases, hydrogen, biomethane, CCS abated natural gas. So we see a massive push on clean gases in rupture With this huge advantage, of course, that gas can reuse the existing infrastructure that is available worldwide for natural In the same way, liquid fuels are also much greener in rupture as shown on the chart here.
RAPTOR entails a massive adoption of sustainable liquid fuels in all transport sectors, as we already discussed. And they reach the liquid the sustainable liquid Fuels reached 30% of liquids demand in 2,050, and you can see that to the left. In rupture oil demand, it ends up at roughly 40,000,000 barrels per day in 2015. The chart here is in fact in millions of barrels per day. Finally, here is a global primary energy mix in rupture, reconciling greening the energy systems with sustainable growth for all.
The mix is even more diversified than in momentum, as you can see to the left. I will let you read the details. In terms of CO2 emissions, Ropje ends up with approximately 8 gigatons of residual emissions after taking into account 7 gigatons of CCS. Compared to momentum, if you look to the right, 70% of the cumulative abatements required over the next 30 years come out of Asia. And this is what you can see again.
You can see the impact of decarbonizing China, India and other Asian countries and then the rest of the As for net 0 50 countries, residual emissions in rupture will have to be abated via either nature based solutions Or via innovations in carbon removal technologies. So this is all I had to say on Russia. And now I have 2 final charts on the sensitivity we did, moving from a well below 2 degree world To a 1.5% world. We've done that via sensitivity once again on Rupture, and we've called it Rupture Plus. To make a long story short, assuming that there is a worldwide ban now on internal combustion engine sales As of 2,035, if we assume that, it removes 14,000,000 barrels of oil demand in 2,050 and reduces the emissions of CO2 by 2 gigatons.
Rupture Plus also assumes an increase in CCS From 7 gigatons to 8 gigatons. With that, global residual emissions, they fall below 5 gigatons in 2,050, which makes this rupture plus scenario consistent with a 1.5 degree temperature increase in 2,100. But the real message is that moving from rupture to rupture plus meeting this 1.5 Target requires another step change in energy supply and demand driven by regulation, technology and behaviors. And just because you were probably going to ask anyway, my last page here shows the total primary energy demand in a 1.5 Degree World. We've contrasted Raptor Plus with the IEA net zero emissions scenario that was published back in May.
Keep in mind, again, very importantly, that energy demand continues to grow in rupture plus, Which is not the case in the IEA net 0 emission scenario. To the right, you can see that oil demand ends up being very similar In rupture plus and in the net zero emissions scenario in 2,050. But you can also see that To get there is very, very different. This concludes my presentation, and we are now ready to open up for Q and A. I would first, however, like to extend a very warm big thank you to every colleague in Total Energies That helped put together this Energies outlook.
We've done a great job. Thank you very much to all of you. I would also like to add, as you're aware, That we consider the ongoing energy transition and the related investments as an opportunity for a multi energy company like ourselves. We have the skills and competencies, the financial strength and the global reach to grow profitably in a lower carbon energy market. We'll hear more about that tomorrow.
Thank you very much.
Thank you, Helle, for this performance, I must say. In 55 minutes to present these 2 studies and comprehensive studies with key messages about Our energy system and the potential future of them, I think it's remarkable. I'm sure that we'll have some questions about these presentations. Once again, Helene made this performance to summarize the key messages for this presentation. She did not describe the Full content of each slide, otherwise, I think would be another 50 minutes there.
But it was a key message we're there. All that material will be available to all of you on our Internet sites. They are already, I think, on the Internet sites during this presentation by people there. But now I think I will open the floor to the Q and A session, and we are ready to Take hello, Mene and me if I can assist the questions now.
Thank you. Ladies and gentlemen, we'll now begin the question and answer session. The first question comes from the line of Jon Rigby from UBS. Please ask your question.
Thank you. Thank you, Hela. Thank you, Patrick. I have two questions. The first is,
What are we supposed to do
with these scenarios? Because it seems to me is But rupture seems highly improbable. The momentum seems incredibly tough. And so with the best of all in the world, it would seem to me that success over the next 20 or 30 years will be to deliver momentum. And Does that sort of accord with your thinking?
And if it does, is how do you set company strategy against that? Because it seems to me is that sort of Setting a normative outlook, sort of backcasting from an outcome isn't necessarily the best way of setting Total's strategy. And then the second question, just did you do any work on the cost differential, so the capital investment, The delta between, let's say, a business as usual, then momentum, then rupture. So we get some idea about What has to happen in dollars and cents terms over the next 30 years in terms of these outcomes? Thank you.
Okay, John. I will help Ella. I mean, as she spoke a lot, I will begin to answer and she can complement. I think for us, this type of scenarios, first of all, we have, as a company, I remind you, the ambition to get to net 0. And we subscribe to the Paris target, which is to work for a world which should be well below 2 degree.
First comment. 2nd comment, which is important from our strategy point of view is What are the key trends, I would say, which are described either on momentum or in rupture, I would say. Then the question to which scenario will be really implemented and where the world will go is not only the matter of a company which supply energy. It's mainly, as it was explained by Helmut, a matter of demand, driving the demand, which is some, in fact, of more policies and change of behaviors and customer demand. So it's a global society which must reinvent the energy.
So it's not so easy. Having said that, what are the trends? I think there is a key trend, which is electrification. I would say the first word, obviously, it's electrification. So you can understand that when TotalEnergies has decided to submit to its shareholders that we are implementing a strategy, which is to build an electricity, a power business within the company is fully supported by this trend.
So we see the growth In the energy coming, I would say, from electricity. And mainly, as it was explained by Helle, by renewables, solar and wind. And what one of the lesson, I think, for me, when I read all these studies is that when people speak about today about hydrogen and clean hydrogen, either blue or probably green, I think this study is the first document that I'm really a comprehensive vision of what is the impact of Producing green hydrogen, clean hydrogen at a large scale on the power demand because at the end, Green hydrogen is a matter fundamentally of renewable energy plus water electrolysis providing this green hydrogen. And you have seen the impact. I think there are a few charts where you perfectly see the additional demand for renewable electricity.
This, by the way, makes me very comfortable when I have some questions from you, and I'm sure tomorrow it will come back. But Are you not too ambitious to reach 200 gigawatts? And what will be how do you produce all this renewable electricity? In fact, The demand for renewable electricity, for renewables is huge if we want to reach such a world. So it's comfort From my perspective in terms of strategy, it gives a strong comfort to this decision that we will allocate capital in a large way, around 25 percent to growing renewable production.
And there is room for many competition. It's not competition. There's room there for many producers and investors. That I would say The second comment, I would say. We can also see in these scenarios, I would say, that there is a very strong impact on the electric mobility trend, I mean, which is quite new, in fact.
I think in fact, it's this world. It's moving a lot. As you've seen, we have announced on Friday some important agreement with Mason Advanced about our battery business together with Stellantis. I don't think we'll have done such a we have just doubled the size of this JV, even more than doubled the size of the JV. There is a huge acceleration on the, I would say, the electrification of mobility.
And that's for light vehicles, light vehicles, as Helmut told you. And so this idea that The IC ban by 2,035, which seems to be odd, but Europe is at, I would say, at the forefront of it. In fact, we can see that can observe that if we don't generalize this type of approach, this But that's true that the challenge will be tough if we want to reach the objectives of the Paris Agreement. I must say, by the way, But it's 2,035, it's not 2025. What do I say that is that, in fact, you have a real impact on the oil demand, which, of course, is for us important.
Not immediately, we know these technologies have an impact on the oil demand beyond 2,035, which means that and that's another lesson of all this scenario is that momentum maintains you have, I think, in And oil production by 2,050 around 60,000,000 barrel per day. In rupture, it's 40,000,000 and in rupture plus, it's 5%, which means that and that's important for only, I would say, 0.7% or less than 1 degree of increase of the temperature between 1.52.4. You have a spread of what will be the landscape of consumption of demand in 2,050 between 25,000,000,000 barrel and 60. So there is quite a lot of uncertainties about all that, which also for us is why we as you know, our strategy is to find the right balance between maintaining our activity in hydrocarbons because we consider that our mission is also to deliver to the people who today use these energies to meet their demand in oil and gas And at the same time, to grow and to accelerate in these renewables and power electricity. So that gives us a comfort.
This is where we diverged from the IEA scenario, by the way, because in 2,030, as we 10 years. Again, the IC ban is beyond 2,030. Then that means that we need to continue to produce and invest in these hydrocarbons. And the recent events on hydrocarbon price, I think, support that vision. So that's, I would say, the key lessons and that's So for me and that's why we are looking to that.
Okay, of course, it's also make us thinking that we need now within Total Energies. And when I speak about hydrogen, again, it's a question of renewables. So all what we are doing today to be able to manage in a large way these renewable energies will be very important for us to develop our company tomorrow in clean and green hydrogen. The cost differential, I mean, I asked a question like you, John, to my teams. And to be honest with you, we came with some figures, but Helle and I have decided not to provide them today.
I promise you that next CA will have them. We need to work hard on it. We need to be sure that there are many assumptions on that at which In particular, of course, at which momentum it will decrease because you can imagine Always you have a like we've seen in solar industry, you have we're scaling up some new energies. You have a decrease, of course. So All that is difficult to factor in.
But what I'm sure is that we need at least to invest $1,000,000,000,000 per year if we want to be on the trajectory. Last year, we did not invest $1,000,000,000,000 per year in these energies. I mean oil and gas plus solar and wind, it was more around I think $700,000,000,000 to $800,000,000,000 So that means that we need to increase more the investments in energy in the coming years if we want to have a chance on the trajectory. By the way, in our strategy, we continue to invest and we have the willingness to continue to grow our production of energy, Of course, going more to decarbonize energy. But John, I will ask you to On your specific question about the CapEx differential between the scenarios, I promise you, but we'll come back to you next year, but
I can give an answer on
the delta. I can give
you an
answer on the delta, John, but not on the absolute amount.
I don't give the answer.
So I mean, roughly Today, I would say 30% more investments in rupture than in momentum. But what we're struggling with is making sure we have a solid basis for What's the amount we're talking about here? So Patrick's €1,000,000,000 per annum is probably a good proxy at this stage for momentum. So we're at 20% or 30% or 40% For rupture. But then again, the difficulties is, of course, how you allow for costs decrease and scaling up of new technologies over the next 30 years.
And When you put a number there, you get a lot of uncertainty. So this is why we chose not to choose the numbers in dollar. But the order of magnitude, if you want to go from one scenario to the other, again, would be my guess is 30%.
That's very good. Dollars 1,000,000,000 or $200,000,000,000 or $300,000,000,000 and you're talking real money, right?
At least $300,000,000,000
Yes, at least.
So that means that we've done what we've done last year, it's almost globally doubling what we've done, what has been
And again, John, this is only what we're talking about here. So oil and gas investments and Renewable power and some storage and some CCS, but we are not costing energy efficiency or refurbishing of homes and We're not adding in power transmission and distribution costs or increasing the capacities global scale. We don't I mean, we're not good at that. So we're being humble.
Thanks, Fred.
I like your question, Jean, because if I may just add to everything Patrick said, I think we are humble, and we don't say that we know what the future looks like, but the message is also We are ready to take whatever comes as an opportunity. And to leverage that opportunity, we need to explore Possible scenarios. And honestly, when we decided very early after last year I mean, in the fall of last year to model this Thermal car and trucks then in the net zero countries by 2,035, there had not been all these OEM announcements that came later out of the GMs in the U. S. And so on.
But so we were not following Existing announcement, we're just playing with assumptions. And for ourselves, trying to understand what does this mean for the world, For certain geographies, those geographies where we are more present, of course, so more Europe than the U. S, if we talk about selling oil or EV Charging points. And then what impact might it have for our strategy, and we use it as one way of informing investment decisions, as Patrick said. So I think these scenarios are very important actually.
Of course, I'm convinced otherwise we wouldn't do it.
Okay. Thank you, Helle. The next question maybe.
Thank you. The next question comes from the line of Lydia Rainforth from Barclays. Please ask your question.
Thank you and good afternoon. Thanks, Helle, as ever for a great presentation. Two questions, if I could. The first one was coming back to hydrogen. And clearly, that plays a more important role this year than last year.
But I'm not sure I really understand what it is that's Change that. Is that related to policy of the government side? Or is it on the ventures that you're doing that you're suddenly finding A lot more demand for that than you might have done a year ago. And then the second question was about energy chains, and you spent a little bit of time earlier on Talking about that, but do you think enough of those chains exist in practice? And whether that's kind of the hydrogen or the renewable electricity that there is enough of those chains actually get things to the marketplace at the moment.
Thanks.
I'll start with the last one. And so On energy change chains, and you were specifically, Lydia, asking about green hydrogen chains, the answer is no. We are still very early stage, and we are still piloting on a global scale on these Green hydrogen production change. But one element which is new between last year and this year is that there are many more pilots and there are many more Projects being announced on the global scale out of the Middle East, in the U. S, in Asia and of course, in Europe.
Europe already had it last year with a green deal. So I'm trying answering both questions at the same time. So There's bigger momentum for hydrogen today than there was a year ago. There's been a change of administration in the U. S.
There have been these Net 0 pledges out of countries who have very few resources at home like Japan. And there are all kinds of ideas around, as I try to explain, you can use green hydrogen and then Create derivative liquid fuels or other forms of fuels from green hydrogen, combining with carbon to e fuels, Sustainable liquid fuels for aviation but also moving to ammonia or moving to methanol in shipping. And so we have increased the forecast hydrogen demand by, I think, it's 100,000,000 tons versus last year. So 31 third more, if you want, which is substantial. And we have also decreased the gas demand in some of the transport sectors where Hydrogen derived fuels may pick up.
Again, shipping would be an example.
Yes. May I add, I think the hydrogen, as you know, there are 2 main And I think which led us to introduce it in a larger way. And that's true. It's partly at the detriment of natural gas, in fact, in our scenario. I know that last year, all scenarios were quite gassy, I would say.
This year, we used more, I would say, decarbonized gas rather than just guessing why. Clearly, both hydrogen, everybody agrees that it will be one vector for hard to abate 6 industrial segments, I would say, like cement, steel, etcetera. So we see but it's not enough. I think when you think to transportation, for the future of transportation, the more we look to trucks, Heavy duties to shipping to sustainable aviation fuels. We clearly see some space therefore, going to, I would say, liquids, some form of liquids, either synthetic fuels, e methanol or e ammonia or we see that without this type of fuels, it will be difficult to reach, I would say the Paris targets.
And so where does it come from? It comes fundamentally from renewable, from hydrogen. So I think it was this trend and we observed that. And by the way, we contribute, we participate. As you know, we have a small part of the strategy is to work together with customers.
So we have some teams of Total Energies who are deeply involved today. In works with the shipping industry, with the aviation, we just announced this morning a new strategic partnership Safran in the aviation industry. We are strong partner of the Maersk Research Center for marine fuels. So we learn. We learn with them.
We evaluate different, I would say, alternatives. And we have more and more the conviction. And we work also with the truck heavy duties, truck manufacturers, where we see a trend where electricity on one side could occupy quite a large space. When you go really to, I would say, long distance, long haul EBITDUTIES, then something like hydrogen should be a position. So we see more space for that.
Having said that, we still have to work out because We perfectly know that the cost of green hydrogen is not today in line with expectation of customers. But There is there, honestly, I think we have to work on it. And the challenge for all of us will be, can we really scale down the cost of green hydrogen by being able to process this at a massive scale. This is what we will target as total energies. But again, one key driver will be obviously the capacity to drive down the cost of renewable energy, of clean energy by making that at a very large scale, large weight.
So yes, hydrogen has a larger role because it's the results of evolutions of, I would say, of what we share with some of our big customers has conviction that we'll need to drive in that to that direction. So Kitchen, yes, that's, I think, the answer.
Yes. I'd like to add just one thing. If you go back to the chart I showed from the energy landscape, Of course, if we talk about green hydrogen, we talk about renewables. And so if it's land based renewables, you have this issue of land use and the amount of square meters of Miles that you need to create the renewable power for the green hydrogen. It can be done offshore.
It can be done Outside of the borders of a hydrogen consuming country. And we don't share all the details of the model, but Lydia, I can tell you that in our modeling this In Europe, with the green bean and the consumption of hydrogen that we've modeled in Europe, roughly half of it is imported, Okay. Because if we do scale up hydrogen massively, it doesn't necessarily mean that all of it will be produced locally. There may be new trade flows linked to hydrogen also.
Okay. Next question?
Thank you. The next question comes from the line of Paul Cheng from Scotia. Please ask your question.
Thank you. Good morning. Patrick and Helen, two questions, please. I think whether there's a momentum or rupture, Electrification and substantial increase of the alternative energy, solar, wind is we need a key theme. But in order for that to work, that's I think the other bottleneck or the key is the battery storage.
Yes, it will increase dramatically. But when we're looking at the building of the battery storage, they are quite Polluted, quite dirty. And also that how should we look at from a disposal Of those old battery, I mean, we potentially that actually creating another monster problem from an environmental C. Wei:] By trying to solve the carbon dioxide issue. So how should Total Energy and the world should looking at from that aspect.
The second question is on your Chart on the EV battery car, the efficiency, say 73%. Just want to get clarification, is that including From the actual creation of the electricity, Because I mean that the battery efficiency is high, but that the electricity transmission from the power plant To actually get charged to the battery, you could see a lot of emission loss, Our transmission malls in power, particularly given the alternative energy source, their footprint is so high so that they are probably Far away from the population center. So just want to know what that 73% really mean. Thank you.
I will leave the second question to Helle. The first one. First, I think Helle insisted that one of the, I think, For us, the key limitation to the increase in renewables, solar and wind is more a matter of footprint of space, I would say. We need before, Total Energies was looking for scarce resource underground. Now we are looking to
Above surface.
Above surface. It's a new challenge for us. It's not exactly the same skills that we need to have. But frankly, I think it's really we need one of the question we have asked and we'll ask is to translate all these But it is into the square kilometers, just to be able to have the idea of what it means. And that's why I think, by the way, that less like Helle said just before.
So Green Deal obviously will be possible only if we are ready, of course, in Europe to import from abroad because I think we don't have enough space to build all these renewable capacities on the continent. Coming back to your question about batteries. Batteries, in fact, it's not only batteries. When you develop electricity and renewable, intermittent renewable, it's a matter of energy storage. It's not only battery is one way to do it, but there are other ways to store energy.
And by the way, hydrogen may be one of them. You could imagine to store into hydrogen and then to transport hydrogen and full networks and then they're redelivering it. So there are other options. It is true what your question is very true about Recycling of batteries, as you know, TotalEnergies is involved through SAFT. We have a battery company.
And now we are establishing a new company called ACC with Stellantis and Mercedes Benz Daimler for batteries for EVs. And this is obviously one of the key issue that we are looking, not only the upstream of do we So management of all the, I would say, all materials. But what do we do after that with the batteries? There are some idea about second life of batteries and trying to extend them in order to continue to store energies, by the way. But it's obviously something which is very important to look to the life cycle analysis of these batteries.
Europe is taking, by the way, some Regulations about it, it's a smart way, by the way, to oblige the competitors to have the same standards, Not only if you want to sell batteries in Europe to accept the same standards instead of global recycling and life cycle analysis of it. I show there is a problem. I mean, there is an issue. By the way, each time it's not specific to batteries. I mean, There was a debate recently about the wind farms and the capacity to recycle these
The blades.
The blades. And Siemens has just announced recently that they are able to build blades, which will be for recycled. So I think
So has Vestas.
Yes. So has Vestas. Yes. I mean, I should have not some wind farm manufacturer, blade manufacturers announced that. But I mean, it's I think, yes, true, we are obliged to invent new way to find energy.
So we create new problems. But I'm like always, nothing is if it were there was a perfect solution, we would have found it. But don't we should not overestimate it. And I think it's not the limitation in the battery. The battery, the issue is more the cost of all that.
It's not super efficient, what we do today in terms of capacity to store. So we have still, I think, it's one of the sector where clearly we'll have to innovate solid state and other ways to store to batteries. So I think we are today with I'm absolutely convinced that these lithium ion technologies that we use today are not at all the final stage, including, by the way, So type of metals that we include in these batteries, we are working a lot on different chemistry in order, in fact, to try to avoid and to reduce the potential disposal issues by selecting the right chemistry at the entry of the problem. So I will let maybe
Yes. And I'll go quick. Paul, I believe the answer to your second question is yes, but I'm ready to take it offline because I want to be sure I understand what you call full cycle so that we talk about the same things here. So we can follow-up on that after the online meeting.
So the EV battery efficiencies question will be handled by Helo and Paul together. Thank you. Next question.
Thank you. The next question comes from the line of Irene Shimona from Theetees General, please ask your question.
Thank you. Good afternoon. Thank you for A very rich presentation. I had two questions, please. First, our energy has become much more expensive, Not just on the oil side, but importantly on natural gas.
We have high record high prices just ahead of winter. There's been a relative lack of recent LNG FIDs. So should we be somewhat concerned? Are you concerned About the affordability of this transition for the consumer even in the rich countries, especially as we need to rely On gas as a transition fuel. And then secondly, I realize you presented 2 demand scenarios today for the transition, Not supply.
But should we be concerned about the availability of the critical minerals required to affect the transition to all these clean energy technologies? Thank you.
There again, I will leave the second questions That's the easy one. No, but I'm not sure we have the whole answer. In fact, we need to make this cycle going up. And I think it We are reading a lot about this question, so I try to understand it. It's a little like the cost and the CapEx.
We need to I see cycle fully the scenario down to the primary demand for metal, I think. And again, that's moving part, but I understand your question mark. And I can tell you, by the way, it's part when we work in the battery domain, we are That's part of the things that we have decided to better understand in particular for this JV that we have with ACC. How far should we go upstream in terms of management and controlling, I would say, future costs of the supply what could be critical or not. On the first one, I think it's not I think it's more, I would say, a short term issue, I think.
Irene, you know perfectly better than me because or as much as me that there is a lot of volatility in the energy market. And I think it's very clear that the so today, we experience, I would say like in many, not only in energy, by the way, in a lot of commodities, there is a strong stress on many supply chain and Strong after the big decrease last year, a strong increase. Globally speaking, I think this global system of the world that we have built during 30 years is not clearly designed to accommodate such big growth. And so we see some stress, logistics increase, sudden, I would say, sudden increase of Demand, which is difficult to cope. It creates, of course, some inefficiencies and some stress on some markets.
The natural gas today is very high, at least I mean, the spot market, let me be clear. Most of the gas markets are not sold on spot. It's not true. Most of the gas market is sold on long term contracts and they are not reached the $25 per 1,000,000 BTU or etcetera. So it's really spot.
I'm not sure it's not good, by the way. I'm not sure it will last. Of course, it's quite remarkable because it's summertime. The question more fundamentally that you have asked for me is I mean and you know that I'm trying to repeat it regularly in different conferences to as a wake up call to all the policymakers. But there is no miracle.
We speak about huge amount of investment. We speak 1,000,000,000,000 and 1,000,000,000,000 of dollars. I don't see people could think that we'll be able to invest all this $1,000,000,000,000 to change fundamentally our energy system without an impact at the end of the customers. Even if we amortize these investments on 20 years. That's a lot of new investments more than what we do normally in the previous year.
So if you invest more somewhere it will have to be reflected in the cost for the customers. So there is no reason not to I don't know why people don't want to accept it. That's, of course, for governments, for policymakers, that's a major question, a major question which is how do you compensate it for, in particular, the low income revenues. I think that's obvious. And I think this question today, maybe It's spectacular the way it's on their desk this year.
Maybe they did not we are not expecting it. Like, I mean, I would be I'm very humble like but none of us, I think, in the industry were expecting such increase of price at the beginning of the year. We were all planning with dollars 40, dollars 50 low gas prices. So suddenly, we see this disruption. But that's very clear that I think there is no way to make this transition.
If governments are serious about the Paris Agreement without clearly putting on the table some clear schemes, with whom they will compensate for low incomes people, maybe not only them, by the way, the impact of this transition. If you take taxation on CO2, it's very good to put a CO2 pricing And they have to do it if you want to influence the behavior of customers. But this amount of money it must be given back to the consumers in order for them to find must be given back in a smart way. I mean, helping them to change their behaviors of consumptions and to reward the ones who are, I would say, more diligent than the other one. So I think that's something and I'm sure the citizens will not accept to pay more For CO2 or more for energies, they have the feeling that it's going just to finance the global deficits of our countries.
That will not work. But this is a key question. And that might be, I think, in the implementation, including in developed continent like Europe, I think it's probably the key obstacle to the Fit for 55. And you have seen the reaction of the countries. The commission has put on the table a very comprehensive scheme, which honestly I can we will subscribe to it.
The problem now immediately for all governments is how do we make it really pragmatically, how do we implement it? And this question of affordability it's becoming so it's not only of natural gas, it's true for oil, true for by the way, it's true for electricity. You've seen the price of electricity has been more than doubled in Europe. So that's a key question for all this transition. And I think it's quite good, by the way, that it comes on the table just before COP26 because it's a matter, of course, the Emerging countries have their own debate about how do we finance for us the increase of, I would say, necessity of more demand for energy to get people out of poverty and to elevate their living standards.
In our own countries, developed countries and net zero countries, we'll have this key question, which is how do we make a just transition? That's I think just transition should not be only a motto. It will have to become real because that's a matter of money now. So the second one, but do you have other elements of
No, it's a good question, Irene. And of course, we're looking at it. So recycling is part of the answer. Moving to new metals or new minerals is part of The answer and we have a good window, I think, of understanding at least the questions through Saft and through everything we now do in batteries, including in the ACC JV. So we're looking at it.
I would say that it there is an opportunity linked to the fact that until recently, Demand was not so high. So there are, I would say, resources available that have not been put at work. There are mines and Mining and Critical Materials Resources, a little bit everywhere in the world in Africa and Latin America, even in Canada and of course, in countries like Asia. So we first have to really map the supply, which is probably bigger than what people Have thought. And then we have to look at the balances between supply and demand.
So we're working on it.
But it's a moving target because I observed the way that our soft are indeed people are changing the content on some of these critical elements.
Back to what you said on changing the chemistry.
Changing the Chemistry and we told them be careful to cobalt and then we diminish a lot of cobalt content. So I think it's that's where it's complex because there are some fundamental elements, but there are also others which are more
There are options. And as you said also, Patrick, the battery technologies are going to change anyway. Moving to solid state and then after solid state. But it's an excellent question and it's a fascinating topic.
Next question please.
Thank you. The next question comes from the line of Michel Della Vigna from Goldman Sachs. Please ask your question.
Thank you very much for the comprehensive presentation. My question really has to do with bioenergy, which plays A major part in your scenarios, but to be fair, also in several other net zero scenarios, especially for aviation and for shipping. And I was wondering How confident you feel that the raw material will be there to fuel such a substantial growth there Without really competing on the other side with the role of nature based solutions and also without the key role of Agriculture to supply food for a growing global population. Thank you.
Very good question, Michele. It's a very good question for me. It's why, by the way, we have probably increased as well in our scenario what I call the hydrogen based liquids, you know, either busy fuels, synthetic fuels. Because it's very clear, but very true, maybe our own experience. We know we have suffered a little.
I will come back on it with So palm oil, and I think it's not only the end, the soybean tomorrow, I think in Europe. So my view is that And you also know that in our industry, we have invested a lot of money like other players to try to make what we call the 2 The 2nd generation biofuels to become a reality without a lot of success, to be honest. And so In my view, there will be, of course, I would say the biofuels are immaterialible. So we can begin to make, for example, sustainable aviation fuels with biofuels, either the first generation or even what I call some wasted animal fats or used cocoa. But there will be a limit to that, obviously, in this type of feedstock, which is quite limited, in fact, on the planet.
So and I agree with you that the competition with agriculture and will be also a limit to the 1st generation biofuels. It depends, of course, on the sensitivity of the continent, but what happened in Europe, I think, will spread out. So this one again, so yes, it's part and we will develop that. I think it's for maybe a transition, a transition between Oil today to integrate some of these biofuels, biodiesel within oil to reach 10%, 1%, 2%, 5%, 10% in order to support the first decarbonization, And in order to support the first decarbonization steps for the aviation, for example, But beyond it, I'm absolutely convinced we'll need to have other technologies like synthetic fuels. Otherwise, We'll get to use a limit that you are proposing, which is a limit of in fact, again, by the way, it's a matter of space allocation and land allocation, land competition.
And people will have to be to get their food before to get their energy from the food. So I know this is different by the way I observe that for example in North America This debate today seems to be not as strong but in Europe, but I think it will raise. So We see that as, yes, an investment to be done, but we need also to invest in the next generation of synthetic fuels.
And I think Michele that What Patrick just said is exactly what is reflected in our two scenarios. So there is a room for Bioenergy, but it's capped, if you want to say it like that. And we have, again, Patrick explained it, we've really significantly increased the H2 derived sustainable fuels For that reason. Because the other competition, of course, is with biodiversity. If you talk about land use, then you also run into biodiversity.
And then the question will be, are we able to really develop these 2 gs technologies? But honestly, And I've shared that with most of my peers, we invested. And unfortunately, yes, it works at a small scale, but a very large scale, We see some limitations to make it
It may
come of course over the next 30 years. But yes, we are not there yet for sure.
Okay. The next question?
Thank you. The next question comes from line of Vanish Kapadia from Palisade Advices, please ask your question.
Good afternoon. Thanks very much for the interesting presentation. I had one quick question and a more detailed one. The first one was around your assumptions of 3% GDP growth with just 0.5% energy growth. I was just wondering, is there a risk To that, in terms of GDP growth, if energy is only growing at 0.5% per annum and your thoughts around that.
And then just going into a bit more detail. There was some very large numbers in the presentation when you look longer terms, which is 15 100 gigawatts of battery is required. So I really wanted to kind of dig a bit more into the work you've done on the feasibility of getting to Some of these numbers, just given that some of these things are going to have quite large second order effects and maybe unintended consequences. So by that by this, I mean, some of the things you've touched on like metals, the batteries, but also water usage for electrolyzers, Being able to for grids being able to cope with the higher electricity demand and gas networks being able to take hydrogen Or even finding enough space for renewables and biofuels. So just wondering if you've looked into these effects, the constraints and Does actually that create somewhat of an investment opportunity for Total in some of these secondary areas?
Thanks.
I will let Helene answer to the two questions. Just one comment. It's clear that, honestly, when we the more we are reading these scenarios, the more I think that we are willing to reinvent the world and that there are many unexpected consequences. I mean, because what we built for these scenarios is something that we okay, we put I mean, we see it, but there are many of them. Space is a land and land management is an issue, water is an issue.
So it's very difficult to be able to evaluate the whole consequences. And I think that's part of the difficulty, I think, by the way, also for policymakers, which is that the planning of this transition is tough because we are describing something which is not real today, which is at a pilot stage. So to extrapolate it is not easy. But by the way, I would insist that is why we recommend, globally speaking, to governments to think to what means transition. Transmission means step by step.
It does not mean that suddenly we'll be able to change the world in the night. I mean, so step by step because we need to be able to monitor this transition as well, including these unexpected consequences. But I will let Helle, coming back on the assumption of GDP and on this issue as well for Patrick.
Yes. Thank you, Anish, and thanks, Patrick. Is there a risk to that assumption? I would say yes, because I cannot guarantee you what the GDP growth of the world will be every year over the next 30 years By definition. So humbly, we're looking at what the Oxford Institute and other Big macroeconomic think tank say about future growth.
We have lowered the GDP assumption a little bit From last year, we had 3.3% last year. We've taken 3% this year because we got some feedback that maybe 3.3% was high. If you go back to the Landscape, we had a chart showing that energy demand has been up globally by 1.8% over the last 20 years, Driven by non OECD. But so honestly, I don't think that the 0.5% energy demand growth assumption is High. I think it's low.
It does factor in also the energy efficiency increases that we have outlined in the model. So Globally, it's not a forecast. It's an assumption in a model. But the 0.5% growth per annum in energy demand, if anything, Looks low. On the batteries, I would say nothing to add to what Patrick just also just discussed.
Yes, there are lots of unintended consequences or fall on impacts of this whole transition. We talked about recycling. We talked about land use. We talked about competition for food. So I think Patrick said, as we use new energies, there'll See new problems coming up, and that's a fact.
So I'll be happy to discuss this with you. But yes, there are From moving from oil to power and then using more power and more solar and wind, needing the firm power It is to stabilize the grids. And that's what makes it interesting also and full of opportunities.
Yes, two additional comments that one. First about the GDP assumption, our 3% is a little lower than last year, but the net zero Scenario from IEA is around 2.8%. So I mean there is not much difference. And I think it's important because I think when we speak about just transition Again, we must think that it's also a matter from somewhere being able to make this transition. We are discussing with Irene before about the population of our different countries.
But you have billions of people in this planet We want to again have higher living standards. And this ones in our assumption, I think we have This
is the past.
There is a growth of 3 point 4% in the last no, they have grown at 3.4% in the last 20 years and they need it. They need this growth if they want really because This transition will not be done against the populations of all these emerging countries. That's not possible. So I think And this is again how do we find the balance? So the concept that we can read today in some articles in the Western world But we could lower the growth in order to meet the price agreement.
I think we'll really raise a lot of issues in many countries. And I have no I don't see the way to tell to this population, sorry for you. You will have to stay and develop during many, many years because we have we are not taking enough action. So that's the point. And the second one, Sorry.
And yes, you said, are there other opportunities there beyond when we speak about batteries over like secondary grid and all that and connecting EVs to make on grids. I think this is interesting technologies, but for Total Energies, let's first, I would say, develop in, I would say, the primary business. And let's be renewable, probably at scale in a profitable way.
Focus.
Focus. Yes, there will be additional ways to drive value out of this renewable or battery business. But let's be first Professional, let's make I would say my message here is more we want to be good in, I would say, renewable products as a renewable battery producer. And then beyond it, I'm sure that if we master in a profitable and professional way, these technologies, we will be able to add additional values from power to grid and all these concepts, which are, I would say, interesting on the paper, but let's first develop So mass EVs before to speak about the power to grid with EVs. Otherwise, so it's a question to follow that at the R and D level, but not yet opportunities will come.
You're right, Anish.
I just wanted to add one thing. Listening to you, Patrick, Anish, which is the other thing which is Easy to do, but we on purpose stayed away from. It's just throw into the model a lot of energy efficiency increases over the next 10 years Because that, again, can completely change the profile of energy demand if you suddenly assume by some magic that energy efficiency can double From today until 2030, right. So we've tried to model assumptions that are aggressive, Showing a real need to change what's going on and be on this transition path, But not throwing in completely unrealistic assumptions either.
Yes. Knowing that, obviously, we are quite ambitious on this one. But I know and it's Probably the scenarios of total energies has one key difference compared to others. We have energy demands which continue to grow in 2,050 compared to today. Most of the scenarios of which are today published in order to cope with the Paris Agreement consider that the demand energy demand will diminish despite the rising population on the planet.
We did not took that into account. But despite that, the average Energy efficiency on the planets in the last 30s, I think, something like 1.5%. And what we have put in the scenario is 2.5%. So Yes, we have been ambitious on it. The mankind, we have not been able to do more than 1.5 percent.
It's a general trend for 30 years when I read the papers. So we have added 1 point. 1 point, when you combine that The growth of population gives you a higher demand and not a lower demand. So if you add 2 points, yes, it's easy. The model will you will be on the price targets, but probably it's absolutely unachievable unless something happens, which I do not know and I don't know what could happen.
But With COVID, we have our generation has to be ready to see some unexpected events. But Okay. So that's a point about energy efficiency. And but again, by the way, it's always a key message for me. The first emissions First mission for all of us is to avoid emissions, which means be more efficient.
But we have taken into account 2.5% instead of 1 point 5. And again, it's a strong challenge for everybody if you want to achieve it. Next question.
Thank you. The next question comes from the line of Christopher Kuplent from Bank of America. Please ask your question.
Hello. Thank you for your presentation and time. Just hopefully two quick ones. I was interested in whether you're using this new outlook, and you've referred to quite a few interesting changes compared to last year. And you've referred to quite a few interesting changes compared to last year in shaping your views and assumptions embedded in your long term planning.
I think you were up to now using a $40 per ton CO2 price for your project deliberations. So if you could explain whether there is a direct link here between this study and your thoughts as they evolve and the long term commodity price Assumptions that you're using for running the business. And secondly, briefly, if that's possible, just wonder, Patrick and Helle, What do you think is the main difference here between your rupture scenario and the most recent net 0 2,050 scenario That the IEA is published and perhaps less about, I think you've been quite clear, the inputs and the underlying assumptions, But behind the messaging, where do you think are the main differences here? Thank you.
I will take both questions. The first one, Clearly, as you know, we were using $40 but we had we are asking our teams to run $100 per ton as from 2,030. In fact, you will see tomorrow in my presentation that it's no more an alternative, an option, dollars 100 it becomes a key base scenario. So it's $40 per tonne increasing to $100 per tonne from 2,030. By the way, we so we have I think it's consistent with the ambition of TOTAL to get to net 0.
And with $100 per tonne, I think we are covering most of the technologies we need with this assumption. So I will come back on it. To commodity price, I will come back on it. No, we keep you will see a $50 per barrel scenario against very volatile. And it's not we should stop changing the assumption because of the short term because it's a matter of planning CapEx expenditures.
And what happened to our companies in the last 6 years since I'm CEO, not because I'm CEO, but I can tell you that it's better to plan on, I would say, basically, stable assumption rather than changing regularly. The second one is I think I'll I show you. In fact, you have to compare rupture plus because high end net zero scenario was willing to cope with 1.5 degrees. So this is what we call 1 drop tier plus because and I would say what are the differences, there are some similarities first. A lot of electricity.
Both scenarios are very much more electricity. Power is key and renewable. So We converge on the scenario of amount of renewables. The production by 2,050 requirement for oil, I think, is 24,000,000 barrels per day on one 26 on the other side. So that means that the landing point for oil is the same.
There is more gas, I think, in the scenario from Total Energies, but in the one of IEA. But the main difference, as Helle On the last slide, she shown explain you is a trajectory between today where the demand is, therefore, oil is around 100,000,000 barrels per day, little less this year, and the 25%. And the main difference is that in our scenario, by 2,030, We still have something like we decreased by 10%, I think, compared to VIA, which decreased by 30%. And honestly, Reducing the oil demand to 70,000,000 barrels per day by 2,030 compared to 100, We don't know how this decrease could happen. Where the demand will be erased, in fact, in 10 years.
Again, if we took the assumption that the IC ban in Europe represents 15,000,000 barrel per day, if it It was on all the 0.25, it's coming in 2,035, not in 2,030, not in 2025. So that's the key difference. It's a trajectory to get there. And of course, this has a main consequence of one of the spectacular conclusion which has been drawn by some of the IA scenario, which is to say, you must stop investing in oil and gas new investments because, Yes, it's true, by the way. If you want to if the demand is only 70,000,000 barrels per day in 10 years, which means a decrease of 3% per year, No need to invest much for the next 10 years in new projects.
But it's not the supply who create demand. It's not true. If the demand is still €90,000,000 like we anticipate by 2,030 and not €70,000,000 and that we produce only €70,000,000 The price will be at the roof and more than at the roof. So maybe it's a good scenario for TotalEnergies and its shareholders. I'm not sure it's a good Scenario for all the customers and citizens of the planet.
So that's why, to be clear, As Helle reminded you, and you know that very well, Chris, I think that our auditors, if we do not invest, we have a natural decline of 3% to 4%, and then we'll have a lack of supply. So according to our trajectory, By 2,030, we are more around €90,000,000 And that means that we need to continue to invest in some oil and gas fields if we want to meet the demand. So again, the question in this transition is not to think that we can change the pattern demand by constraining the supply. If we just do that, we'll have A huge spike in the price and a huge instability, social instability on this planet. So we cannot do it like that.
We need to monitor the transition smoothly and taking into account. But we need also to work hard in order to substitute as quick as possible some oil demand from some customers. So and we, in total, assign this mission to our teams. When we can do that, we do it. And we work with many of our customers now.
So next question?
Thank you. The next question comes from the line of Jean Luc Romain from CIC Market Solutions. Please ask your question.
My question on energy intensity was answered. Thank you very much. The remaining question I have is how do you I believe that such a massive increase in investment could come in the next 10 to 15 years, dollars 300,000,000 to $400,000,000,000 a year that would be needed in a Rupture scenario compared to the momentum scenario.
The
question was about CapEx increase between the scenarios. But please answer.
No. Sorry, I want to make sure we understood the question because the line was not so good. It was a question about the Incremental investments needed in rupture versus momentum?
Yes. That's very impressive. And I was wondering how that could happen So it's such a massive increase.
Because you need much more renewables and much more electrolyzers. In fact, this going from, as Helo showed you, in that you have to substitute an additional 20,000,000 barrels per day. You have to The substitution of, I would say, one scenario, one pattern of supply by the others will require much more CapEx in order to be able to deliver the same energy. And I think it's just a matter because You know we go from like it was, I would say, the energy landscape presentation by Helle. You go from energies, which are super efficient.
Let's be clear. Today, with oil, gas at certain level, we have the most efficient way to produce energy in terms of cost per kilo, Not in terms of CO2, for sure, but in terms of cost per kilo. Of density. Of density. So the CapEx to produce 1 joule of energy when it comes from oil, it's much more efficient than when it comes from alternative energies like renewables, etcetera.
So that's the famous chart where you can really look at it. And so this density, If you want the same amount of energy, you will have at least less dense, you will just have to invest much more. So that's not so it's just a matter. And again, it's just a matter of yes, it's true that we have drive down the cost of solar and wind a lot. But at the end of the day, in terms of density of energy that we get, it's not the same.
And if you need to transform your solar electricity into a synthetic fuel combining that with CO2 making a transformation all that costs money. So it's that's the required investment. This is why it's not so easy to go from one to the other. Yes. If you look more specifically, I have one comment from 1 person of my team, which is sending me a message I can share with you.
When you look to the power demand on one side, the momentum is something like globally 7,500 terawatt hour. And in the momentum, in the rupture, it's 11,500. So it's an increase of almost 50% of power demand. So this has to be invested. Okay.
Jean Luc, a new next question?
Thank you
very much. The next question comes from the line of Jason Gabelman from Cowen. Please ask your question.
Yes. Hey, good afternoon. Thanks for the Presentation. First, it seems like hydrogen, the pace of growth It's probably the biggest change from last year looking out to 2,050. But if we focus on changes versus last year's outlook To the mix out to 2,030, what would you say is the biggest change In the outlook, focusing on that 10 year period.
And has that resulted in Changes into what Total is doing in terms of their strategy? And then the second question, you alluded A handful of times to COP26. What do you think is the potential most material outcome From that conference, as it relates to Total's strategy, what should we be looking for? Thanks.
The next 10 years, the big changes, No, I think it's just a confirmation of the acceleration of electricity. Yes.
It wouldn't be major, Jason. I would As Patrick said earlier, we have put a little less natural gas into some transport Sub segments and put a little more beginning of efuels instead. But honestly, It doesn't have a major impact over the next 10 years. You need to go between 3050.
Yes, you are right. Maybe we have within TOTAL, we are more looking today to, I would say e mobility, we think, for the next 10 years, to invest more in e mobility event. We have some question marks strategically in terms of what will be the use of natural gas as an alternative vector for quotation,
if
I may share with you, we think that this one we need to monitor carefully the investments in this part. Yes, there are. It could be really a transition. And on the other side, spending more on what I say e mobility either through charging networks, charging points or through batteries, by the way. So that's more, I would say, for the next 10 years, one of the change which could affect you.
But it's marginal compared to what we had in mind. 26, I will maybe surprise you. I think What we would expect from COP26 is probably some clarity about this Article 6. We need to if we want to be serious about net 0 in the future. We need to understand the way that all these, I would say, carbon credits market will work or do you evaluate the fact that you invest in one country compared to another place?
I think it's urgent to have a clear framework. We know it's not easy. But I think speaking about Net 0, if we don't have a clear understanding as a way that all these even if it's a voluntary offset will work. And we have a clear and I would say Ethical way. Robust one.
Robust one. Critical way to manage that. That will limit some investments, which might be very efficient in terms of I mean elimination of some emissions. So that for me is an important point. And I know that Mark Carney and others are working on it.
I hope they will be able to convince government to progress for this part because There is no way to reach carbon neutrality without having to be able to optimize economically for the planet our investments in order to be more efficient in terms of carbon credits. So I would say that's something that I would which could have an influence on the way we work. And the next question?
Thank you. The next question comes from the line of Jason Kani from Santander. Please ask your question.
Hi, thanks. Hello, Patrick. Good to speak to you. I was wondering about the future of global hydrogen markets And the connectivity of exporting countries of green hydrogen or other hydrogen versus importing and the preferred shipping Technologies you think that could be developed over time because I'm conscious that we have a global ammonia market today, but it is toxic. Pressured vessels for hydrogen require massive infrastructure investment for Pressurization and decompressing in different places.
They're also point to point. And there is fast Growing research into solid state hydrogen systems, which could prove disruptive over time and potentially scale up quite rapidly 2030 onwards. So just wondering how you see global hydrogen markets and connectivity of hydrogen volumes in the 2030, 2000 and 50 time frame. Thanks.
It's an excellent question. And I think it's why we are and we have I think it's the reason why some companies are speaking about methanol, by the way, e methanol and or e ammonia. I agree with you, ammonia is toxic. But I perfectly agree. And by the way, it's not obvious at all when you ship ammonia, if you can use ammonia, of course.
But the reverse reaction to go from ammonia to hydrogen is not at all technology, which is today, I would say controlled and it doesn't work at all. So we have to work hard. But methanol is another one of another way to ship, I would say, some hydrogen and there is a lot of infrastructure already. But your question is very true about global H2 markets. So we don't have we have nothing today.
It's not easy technology. It's a liquefaction point. As you know, it's much lower than for natural gas. So it raised a lot of issues and a lot of investments. So I agree that this question for me is not fully addressed today.
And by the way, the projects which we are looking, and I will not disclose the projects today and neither tomorrow, but we are working on some projects to be sincere with you more looking to ammonia at VN rather than H2 for the logistics. But to establish markets is better, maybe a nice way to do it before to go and to go to the whole logistics of it. But good question, Jason. And still, we are there at a level of we need to dig because it's not so easy. Okay.
Next question.
Thank you. The next we have no more analyst questions. Therefore, we will move to a generalist And the next question and final question comes from the line of Sarah White from Reuters. Please ask your question.
First before yes, Sara, I will take your question. Okay, please.
Okay. Thanks. So I'm the last one, right? Okay. I was just curious.
I wanted to go back Because you mentioned that in Europe, there were limitations when it comes to solar and wind projects in terms of footprint, in terms of space. Could you talk a bit about also the local opposition to some projects? I'm just wondering if you think that's actually really a problem, particularly in France. And what can you actually do to try and overcome it? Can this actually affect your overall forecast?
And then if
you don't mind, I did want to ask a second thing. You said the world still needs fossil fuels and transition fuels. With that in mind, do you think that there's any kind of broader lessons that we can take from the fuel shortages and disruptions that we see in the UK For the year to come as well? Thank you.
The problem is not only in France, I think. By the way, you have issues with communities because it's a question again of land use. In fact, you have competition for use and you have people. And it's not only in France, by the way. We observe the same exactly the same in Germany, in Italy, by the way, and we begin to observe it in Spain as well.
So I think the reality is that Europe is, I would say it's a humanized civilization. We have and we have a density of population, which compared to many of the countries like the U. S. Or Australia, for example, which is much, much, much we are much more dense. And so I'm not surprised and it's why I was insisting that it's a question of scarcity above surface for me renewables.
And so that has to be taken into account. I read there was a study, an interesting study, which has been listed in Italy by the Ambrosetti Foundation. We try to translate this the target that the European Commission As assigned by 2,030, 40% of renewable in our mix. In terms of they made a study. How long could it take to get through all the administrative process to build such capacities?
And the answer in this study by Ambrosetti is not 2030, 2,043. There is a message there to policymakers, I think, to everybody. If and that's I think that's very good, this exercise, I mean, this willingness of Europe to go for 55% by 2,050 because it raised many issues. It puts the people in front of the reality. How do we do that?
And if yes, if we want to reach 40% of renewable in our mix, We need to build massive renewables for the next 10 years. And we need to have the land and we need to have the administrative process going through. And that's true that in our democracies, which is good, that makes raise questions. I think there is only way to think to that. We should oblige Governments to plan, to plan properly, like I think the French government begins to think to that, we need to make some planning.
But to do the planning properly, you need to put people around the table not to antagonize people. If you let just people going, if it's a jungle, it will not work. So that's true that And for let's be clear, for our strategy of Total Energies, this is one advantage of our company is that we think when we think renewable, we think on a worldwide basis. I will come back on that concept tomorrow. So yes, we have an ambition in Europe, but we are looking to other geographies where maybe this question of space and land use is less, I would say, critical, but in Europe.
So that's, I would say, a very good question. And I don't have all the answers. We will work, but we will not solve it alone, The energy producers, we'd like to solve it together with the society and policymakers and of course, the citizen representatives. Yes, today no, but I mean the second question. Yes, it's true, Sarah.
The planet today is working with fossil fuels. 80% of the energy of this planet is fossil fuels. That's the reality of the planet. It was true in 2010, it's still true in 2020. I think we decreased the Foresight Fuel's share by 1% in 10 years.
And so that's all about, again, antagonizing energies once again the others and some players again the others will not be the solution. The transition, so energy transition, the important word is transition. Transition mean finding the right way to accommodate the present and the future. And I'm convinced that we'll not be able to build these decarbonized futures against this present and the energy as a present. It's not possible.
People will not accept. And look, It's not because of CO2, it's because of COVID, but suddenly we have diminished investments last year, very uncertainty, so less investments. Suddenly a lot of demand, which by the way is not bad. I mean, this increase of natural gas somewhere is coming from Asia, from China fundamentally. Why?
Because there are policies there which incentivize some producers, some energy consumers to use natural gas rather than coal. So fundamentally, it's coming also from a policy to control CO2 emissions and when the Chinese government, despite what we said, is taking actions. And so you have more demand for natural gas. The increase of LNG demand by China in 2021 compared with 2019 is plus 35%. Of course, this is a type of increase which cannot be absorbed easily if you don't continue to invest.
So that has an influence on all these. So the lesson is that we need to monitor smoothly the transition by investing more and more in renewables and decarbonized energies. But at the same time, we need to maintain a certain level of investment in the energies that we are using today. And so this shift for customers and this is, by the way, exactly with the fundamentals of the strategy of TotalEnergies that I will describe tomorrow. And as it is the last Question, it gives me the perfect conclusion to this sequence today.
And so thank you for all of you for your attendance. I know it was a very rich and dense presentation, but thank you, Leslie, and thank you to all the teams who contributed to the quality of this presentation. It's raised many questions from you, very interesting one. We don't have all the answers. We try to share with you a lot of them What we think and we continue to learn is why I consider that it's very important in a company like Total Energies with, I would say because we are involved in these energy markets and more and more involved in many of these markets, we have some understandings.
We don't say we have the truth. We have different scenarios. There is no we are humble, but I think it's important that we contribute to the debate. And That's our objective today because this debate is key for us, not only as a company, but key as for all of us as member of the society. And again, I thank you for your attention.
And tomorrow, After these markets, these potential markets presentation, we'll come back to what Total Energy will implement as a strategy for the next 5 10 years. So thank you this afternoon, and hope to answer to you more questions even tomorrow afternoon at 2 p. M. For the strategy and outlook