Good morning or good afternoon to you all, and thank you for joining our Investor Day. I'm Ladislas Pasevich in charge of Investor Relations. After the presentation we had from Helik, Good morning or good afternoon to you all, and thank you for joining our Investor Day. I'm Ladislas Pasevich in charge of Investor Relations. After the presentation we had from Helik, Christopherson yesterday on the total Energia outlook, we will focus today on strategy.
Patrick Poullianne and all the members of the Executive Committee are here and will address your questions during this afternoon. Patrick will first present the strategy, and there will be a session of Q and A after that. Then will come the time of focus presentations with 2 main presentation, 1 on Renewable with Philippe Okay, one on the Mobility Revolution with both Bernard Pinatel, who will focus on biofuels and Alexis Vocque, who will focus on electric mobility. A Q and A session will also take place after the presentations. So this is the program for today.
But before we start, I'd like to hand over to Arnaud Brojak, who will present you the safety moment for
today.
Thank you, Ladislas. Today, we've chosen to share with you a sad safety moment with the tragic death of 1 of our contractor staff, a 37 year old rig floorman. The fatal accident occurred on August 23 at 11 am on our drilling operations in the U. S. GOM.
The incident analysis is still ongoing, but let me present you with our current understanding of what happened. The drillship Pacific Khamsin was pulling the riser column out of the water in preparation for a rig move to escape the storm. This is a routine operation that was executed with no time pressure as the rig disconnection had been decided well in advance. The injured person was moving down bolts from the Zircon using a heavy duty pneumatic wrench. The weight of this tool is 150 kilograms, and it was attached to a winch table with a 0 gravity compensator.
The tool became jammed, and the injured person was working over the tool during the attempts to free it by pulling on the winch and also by manipulating it manually, as you can see on the small schematic. As the tool suddenly became free, the tension in the winch cable was released and projected the tool upward hitting the injured person and projecting him from the riser table to the rig floor. Unfortunately, medical efforts at SAC failed to save his life. This tragic accident ends a 2 year fatality free period for the E and P activities and is a shock to our company. An incident analysis committee is working jointly with a drilling contractor Pacific Drilling to determine the root causes of this accident and preliminary assessments and recommendations have already been shared with local authorities and within total.
Our next steps are to complete the root cause analysis and to continue to share learnings and mitigation measures so that every possible information is used to prevent similar occurrence. Safety is a core value for Total, and we strongly believe that it is a cause of operational efficiency. Our track record demonstrates our relentless strive for improvement, And this is illustrated by the frequency rate of recordable injury, which is on a good trend that compares well with our peers, But of course, no complacency as we are more than aware that with safety, every day is a new day. In terms of health, we have limited the impact of the COVID-nineteen pandemic with a fast and proactive response. We've mobilized very early a crisis management sale at group level to support safe continuation of operations around the globe in all parts of our businesses.
We've been able to source and supply more than 100,000,000 masks to 130 affiliates and to enforce strict health protocols to maintain our site and premises COVID free. As a result, there has been no impact on our production or ability to supply vital products and energy to our customers. We've also supported our communities with contribution adapted to local situations. More broadly, safety defined as HSE, including environmental safety, will be well covered in today's presentation as we believe that long term success is built on sustainability and acceptability. Thank you.
Good afternoon in London and Paris. Good morning in New York and good evening in Singapore. Welcome this afternoon to the traditional September Total Strategy and Outlook session. First, I hope that you are all safe and sound and coping all rights with current COVID situation. Thank you to Arnaud to have made this safety moment and to pay tribute to this young man in the U.
S. And Arnaud has also to take the traction or stand trial on our safety commitments and results. To be honest with you, covering the number of short term challenges and the very high degree of uncertainty we are facing in these extraordinary times, we asked ourselves whether we should maintain or not the strategic presentation as it will be difficult to answer to any question on the very near future. But because our action plans to tackle the present challenges are well into force, Because we demonstrated our higher resilience since the beginning of this crisis, thanks to the work done in past years the survey that we have announced our climate ambition to get to net 0 in May at the worst time of the COVID lockdown, we have finally decided to maintain this strategy preservation and this is probably the most important one I will do since 2015. Because today, we will elaborate more precisely looking to the next decade or we are willing to reach our ambition to get to net 0 by 2,050.
We want to transform TOTAL to meet the dual challenge as summarized yesterday by Helle, more energy and less carbon. Today, you will hear our Total Oil, I would say, will become Total Energies with a big S, a broad energy company, which will be the 1st oil and gas major to take today's commitment that it will reduce by 2,030 the scope free emissions of its customers in absolute value compared to 2015. Customers, the demand, but how's the key word shaping our strategy? Our strategy derives from demand evolution, markets evolution and not from supply availability as that could have been in the past. Yesterday, rightly in our introduction, Helo told you that the total 2020 energy outlook focused on energy demand, not energy supply.
This was intentional because changing the world energy mix to meet the climate challenge within priority required to change the demand patterns together with our customers, together with society. Today, we will use concrete examples of successful projects to demonstrate proof of concept that building a multi energy company is possible. Today, we will explain why becoming a broad energy company is consistent with our long term strategy to invest for profitable growth with our capital disciplined approach targeting increased cash flows and returns. Today, we will show you how our oil and gas businesses will fund the transition even at $40 per barrel for profitable growth in renewables and electricity while supporting the dividend at same time. Because time is right to accelerate growth into low carbon, surge in demand for green energy and climate action is triggering wave of supportive government policies and attracting new financial partners and is creating opportunities to grow in new areas and unconsolidated markets.
Strategically, we recognize sustainability is a key to long term success. The shift in demand driven low carbon sales mix underpins scope free neutrality. And diversifying activities by growing renewables power generation increased resilience and mitigates oil price volatility. Accelerating energy transition and transforming to broad energy company is a matter of leveraging expertise and competitive advantages to selectively capture opportunities and build long term positions, but it will enable us to achieve our ambition of moving forward with society and stakeholders to grow the company sustainably and profitably and get to net 0 by 2,050 or sooner. The next decade, 2020, 2030, will be a transformative decade for Total, further building the portfolio, favoring us overall, accelerating expansion of low carbon electricity and decarbonizing the sales mix all within the framework of strict capital discipline.
The energy transition is an inevitable evolution. Cleaner energies will continue to displace traditional energies at an accelerating rate. The real risk is not participating in the transition and being left behind. We have the knowledge, the technology, the financial strength needed to thrive in fast growing areas like renewables, biofuels and carbon capture. We have studied these for years and developed our expertise.
We have visibility and we are confident on the returns we can expect in the next 5 years from this strategy. So now we go to work, we will execute and deliver. In 10 years, we grow the company largely by developing opportunities we have in hand today and we reduce emissions. We took the walk and we walk the talk. Let's go for now 1 hour presentation.
It will be a little long. And to describe Lou, the thematic of the dual challenge or we will tackle it, increasing energy while decreasing carbon. This presentation is a little different from previous ones. You will have at the beginning the menu for the next 10 first 10 slides. So I will announce you the menu with simple slides, maybe some of them will surprise you.
And then after, I will enter into the menu for each dishes with some details. And at the end, for the dessert, I will come back to you to summarize and speak about return to shareholders. So let's go in the journey that we have prepared. I will speak alone today. It's mainly due to this virtual, I would say, exercise.
It was more complex to us. But honestly, this is the result of the hard work of all the teams and this is why all my colleagues are there together with me. It's I'm the voice spokesperson for the whole teams and the whole executive committee to describe the strategy. So of course, and it will be short because you heard earlier yesterday during 1 hour. All this strategy again is linked to the evolution of the demand we anticipate.
We have seen scenarios. I think there are 2 big trends. Growing population in emerging countries aiming at higher living standards, so a growing energy demand, which we have to face. And the other part of the challenge is absolute necessity to get the planet to carbon neutrality by 2,050 if we can and the latest by 2,070 with all the countries being on board. So that's the 2 challenges.
And in front of that, this has some implications like it was presented to you by Helle on the energy mix and on the various sources of energy. For oil, it's clear that the acceleration of innovation to substitute oil use is there and that oil demand will plateau 2,030 plus and then decline. It will have saw an impact on long term prices. And as you know, Total is considering $50 per barrel. On natural gas, the scenarios which have been presented to you, we clearly the natural gas is key in the transition, available, affordable, complement to renewables with a specific segment of natural gas, which has the fastest growth, which is the LNG.
And natural gas also we have to be decarbonized with greener with biogas and hydrogen. The other segment of the energy mix which will grow quicker is electricity. Clearly, if we want to go to net zero policies, electricity will be at the core of the mix going from coming from 20% of the worldwide energy mix to at least 40% in the net 0 in the 1.5 degree scenario. And of course, this will have to be decarbonized electricity. And so renewables will be the segment which will have the highest growth.
And last but not least, as it was explained to you, to get to carbon neutrality, carbon sinks are required. So these are the trends which we take into account. At the same time, TOTAL as a responsible company and our aim is to become the responsible energy major has expressed its clear ambition in climate ambitions in May this year, getting to net 0. And we clearly share and not only a corporate level, but each employee of the company share the ambition to contribute to get to net 0 by 2,050 together with society for our world business. And we have established 3 clear objectives and commitments on this roadmap to get to net 0.
The first one is, of course, net 0 on our own operations, the emissions of COP 1 and 2. As you all know, when we speak about the 40,000,000,000 tons that yesterday Helle was mentioning as a world emission, this is a sum of Scope 1 of all operation and individuals in the planet. Scope 1 are additive. If each company is taking care of the Scope 1, then the planet would be at net 0. But we are also on the top of it because it's a requirement from the society.
We have not to work only on our emission, but to work with our customers in order to help them to go and to change their demand patterns. Because if we want to move the planet, we need not only to act on the supply, but we need also, as I said, to act on the demand. And there we took 2 commitments regarding, I would say, the emission of our customers. So first one is for Europe. Europe is very important for Total because 60% of our sales and our customers are located in Europe.
And so we took the commitment because Europe itself at the political level has decided and has set itself the same target to be carbon neutral by 2,050, there is no reason and no way in fact to escape to work together with Europe and to be ourselves carbon neutral in Europe by 2,050 or sooner. And on the worldwide basis, on the question of these COP 3 emissions of our customer, we set a target in terms of carbon intensity, which is to diminish our portfolio of sales, the carbon intensity of the portfolio of sales by 60% or more by the 50%. So in May, we said that. And of course, today, we will explain you how we translate that ambition taking into account the evolution of the engine markets into our strategy. The strategy is summarized on this chart in simple words, very big ones in Total.
And I think the message there is that clearly we want to transform Total into a broad energy company. And this is what we will explain you what it means today more precisely. It means that we are willing to propose to investors sort of new concept and energy and company of energy encompassing natural gas, electricity, oil and carbon sinks. Again, somewhere, we summarize that in sort of motto, Total becoming Total Energies with a big S with of course the ultimate objective, but sustainability is key to create long term value for shareholders. So what does it mean by segment of energy, which is a different approach of the traditional one, but we want to cope with the demand.
On natural gas, we are a key leader in the world. And this one LNG is one of the fastest growing segment. So we'll continue to play on that advantage and to maintain and even develop that position, integrating on the value chain, while at the same time, we'll develop positions in biogas and cleaner hydrogen in order to decarbonize the natural gas. We'll also promote natural gas for power and mobility. Electricity is okay.
Of course, again, the 2nd fastest segment of the energies on which we want to develop and to accelerate our investments, primarily electricity being produced from renewables. But there again, we have decided to mitigate along electricity by then, production, storage and trading and supply. Ore will remain a core activity because the demand for ore is still there despite we go to the plateau. But there because of the trends that we expressed, we will focus our investments on low cost oil, which will be resilient to the volatility of the oil price And as well, we'll invest in biofuels, which will be a substitute to oil for liquid use of energy. And at the same time, of course, we have to adapt our refining capacity and sell to the demand in Europe where we are a big refiner.
And last but not least, carbon sinks, because we want to be ourselves carbon neutral, we like to take our share of investing carbon sinks, either nature based or carbon capture, use and storage. So that's in fact the menu that I propose. And just to complement the menu now, it's become 2 figures. So we have a growing we have we want to increase the energy. We have some ambition to continue to grow the company, let's be clear.
And that means as we are an energy supplier to grow our energy production. But our growth for the next decade will come from the 2 segments, which for the fastest growing the fastest growth which are LNG as I said and electricity. So as you can see on this chart, by the way, because we know you better understand 1,000,000 barrels of equivalent per day than terawatt per hour or dollars. We translated on the left side, the scale is in 1,000,000 barrels of oil equivalent per day. But it's a little complex to be honest to transform some terawatt hour in 1,000,000 barrels of oil equivalent day.
I'm not sure by the way, but our stakeholder would be happy if we continue like that. So on the right scale, we put another unit, which we'll have maybe to better understand, which is the petajoule per day. I think our Australian friends love this they love this unit. So maybe we'll have to take that on board. But more seriously, what we show you that is that this company has the ambition to grow from around 3,000,000 barrels of oil equivalent per day to day to 4 by 2,030.
And the growth will come for half from gas, in fact from LNG, let me clear. And the other half will be from electrons and green electrons. The 120 terawatt of each type here are equivalent to 500,000 barrel equivalent per day. The oil will remain in our portfolio, but will be stable maybe could decline by horizon of 2,030, but the decline will be replaced by biofuels by productions of another liquid because again we'll need some customers will need a liquid form of energy in the future. So that's for the growth.
And at the same time, we want to reduce emissions. And today, we are taking new commitments on the scope 3 emissions of our customers, I should say, of the energy products used by our customers. Because in fact, it's not really it's not the SCOP 3 emissions. The SCOP 3 emissions of our customer are the SCOP 1 in fact. But let's say it like that in absolute value.
That's the most important word. Until now, And we are the 1st major oil and gas company to take a commitment in absolute value on the decrease of our scope 3 of the scope 3 emission of our customers. Why do we take that? Because first and I come back to the commitment we took on being carbon neutral in Europe by 2,050. I read the comments about the fact that we are concentrating only on Europe.
But again, you will see the positive impact it has as a world company. Europe again represents 60% of our emissions in 2015. Was the same by the way in 2019. The absolute figure did not diminish between 2015 and 2019 410,000,000 Scope 3 emissions are reported by Total. But in Europe, there is clearly an acceleration of the evolution of the demand.
And so we commit to reduce our scope 3 emissions of our European customers by 30% by 2,030, which will be a first step to go to 100% by 2,050. So this will come back on that. And these results, I mean, this commitment on Europe, of course, contributes to the fact that we can take a second commitment today, which is that on a worldwide basis, our scope 3 emission in 2,030 will be lower than the one in 2,015. And again, we are the 1st to take that commitment. Stakeholders ask us a question after we make our commitments in May and tell us that, okay, 2,050 is fine, but what do you do in 2,030?
You have the answer today. So you will tell me to ask me, but what do you do? You grow on one side your production, you reduce your emissions, what is the magic tool that you have find? In fact, again, it's just about demand. And what is driving at the end most of the emissions are not the one we emit when we produce.
When we produce Total emits 50,000,000 tonnes of CO2. But the products we sell and our customers which are using these products, they emit 400,000,000 tonnes. So the focus must also be there. And in fact, we are able to reduce our emissions on the scope free power, to reduce the scope free emissions because we will adapt our sales pattern to the demand patterns. What does it mean?
That means that in 2019, we sold 55% of oil products, 40% of natural gas and 5% of electrons. By 2,030, by adapting again our system and our sales to the demand, we'll reduce the sales of our oil products by almost 30%, which will be again on the as a liquid in liquids be replaced by 5% of biofuels. So the liquid sales will represent together 35%. Natural gas sales will increase to 50%, linked to our growth in LNG. And the electrons, in particular these green electrons, will represent 15% of our sales.
So that's with the 3 slides to have the framework of the strategy of the company and why we say we are somewhere transforming TOTAL. Of course, to do that, we'll need to align investments to become that broad energy company we aspire to be. That means that along the years, the next 10 years, the next decade, progressively because it's a matter to have access to more and more and more projects, We will increase the capital we spent in renewable electricity. We'll maintain the capital we spent in LNG more or less 15% to 20% of our CapEx. And oil and gas will continue to reserve to receive the major part of it because and that's fundamental to the transformation.
We need to continue to deliver cash flows coming from oil and gas in order to be able to finance the growth that we want to deliver in renewable electricity. And so you have said some indication about this increasing capital spends in renewables and electricity. It was $1,500,000,000 last 5 years, 10%. It will be more than $2,000,000,000 and more than 15% of our capital investments for the next 5 years and it will progressively grow to more than €3,000,000,000 and more than 20% on the next 5 years. This strategy aims, of course, not only to grow.
It's not a matter of volume. It's a matter of value for all of you. We know very well the message. And so at the same time, we will be able to of course increase cash flows and deliver a double digit profitability more than 10% of return on equity at $50 per barrel. I will come back on this side at the end of my presentation, but just have a look.
And what do you see? You see that if you take we took by chance the last 12 months of an average of $51 per barrel. So as we propose to look in 2025 to an environment of $50 with a sensitivity of $60 You can see that renewable electricity in 5 years become they appear, they appear with €1,500,000,000 You can see that there is an increase of around the 30% of the LNG cash flows. I've got back on that. And you can also see that, of course, oil and gas and LNG are offering us upside if price is higher than the $50 basis case base.
And that's again the engine. In fact, let me be clear, the oil and gas is the engine of transformation because they will give us the blood to be able to accelerate investing in renewables and electricity. You will tell me and I have often the question, why Total? What is why do you think you can become this broad energy company? We took the question seriously and we put there the 8 elements, I would say, which we consider our our competitive advantage and which we can build to grow in renewable and electricity and not to remain only an oil and gas company.
You should read them from bottom to top, from to the top. They go 2 by 2. All that is well organized, engineers in total. So the first one, of course, I just mentioned it. We have the oil and gas cash flow.
We have the financial capacities. The second one, which is important, we are thinking on a worldwide basis. We have a worldwide footprint. When we think about the strategy of renewables and electricity, I will come back on it. We can think to the world looking for the best opportunities.
And from this perspective, we are offering something different than many utilities, which in far more national, continental or Atlantic. The second element of competitive advantages are linked to the technical capacities and competencies of the company. Project management and offshore expertise is clear. And when we look to offshore wind project management, we speak about 3, 4 projects in which we invest in Scotland represent $4,000,000,000 of CapEx. And when we want to be pioneer in floating offshore wind, obviously, we have there some in house expertise which can be used and leverage to be pioneer of this technology.
The first elements are linked in fact to our strong position in gas. And in fact, we don't discover power today. Our teams under the leadership of Philippe and our trading teams have for long look to gas to power with some power projects, by the way, gas fired power plants. So the integration gas to power is well known. And we know we have the expertise of all these markets, all gas and electricity through our trading teams, which we do know we have put all together in Geneva since last year to have a better to leverage better all the knowledge we have of all these markets.
And last but not least, when we go to downstream to the customers, within the DNA of Sertile, there is a customer proximity for all the activity we get in marketing and services. And we have another asset, which is our global brand or global rich. Just more information, but we recently acquired a portfolio of customers for gas and power customers in Spain. We made some pause among the population to try to get to ask the question which brand should we use. And 45% of the Spanish who answered to the poll knew Total, having a good image of Total, despite the fact that we leave, unfortunately, Spain 10 years ago when we sold all our shares in SEP7.
So this brand has an asset and the global which it represents and we should build on it. So these are, I would say, why we are confident. And not only to speak about the advantage, but to put them into action, in particular, at the technical competencies. Today, we have launched a project. It's still at a project, so it's not yet, of course, in, I would say, in action, which we call the OneTech project.
The idea is to concentrate all the group's technical expertise, which are spread today between E and P, refining and chemical marketing and services in Chemical, Marketing and Services in Gas in New York Bulk Power. In one large technical center, this will represent with Central Organization more than 3,300 engineers. Why do we do that? Not at all to make synergies. No, we will contrary.
We want to leverage the existing expertise which are high because Total the success of Total today are largely due to our technical competencies of our engineers and technicians around the world. But we want to really leverage that in order to give to our renewable and electricity business that will grow now at a large scale, the I would say manufacturing and technical backgrounds that it requires if we want seriously to build this broad energy company and this is our purpose. If we want to foster innovation, we need to be able to allocate these competencies to these new businesses. And I will tell you, it's not only the company who wants, it's our employees. Our employees today really, they are all like in the society.
They want to contribute to the climate challenge. They are in an energy company. They have the competencies. And I've seen when we propose them to tackle their emissions, they raise 500 ideas, different projects. So they are willing to contribute.
Of course, they hear what is happening around us. They see the pressure on TOTAL as an oil and gas company. They don't want to be in the dinosaur part. They want to be together with in this transformation. And I think what we offer them will be a unique opportunity to contribute directly to the transformation of the company.
So it's why I'm using transformation today for the first time in my speech. It's not only a matter of strategy, financial, capital allocation. It's a world company, but we want to embark in that project globally. And in particular, again, our technical company people, which are at the core of what is an industrial company like Total. So you have the menu.
I could stop my presentation there, but I have more slides to give you some details. And it's quite a little long, but I hope you will like the dishes 1 by 1. So the first one and I will for the first part, I will go through the gas, through the electrons and the liquids. So today, the presentation is on upstream, downstream is a little different. We do it through segments of demand.
So gas is first. Of course, we are it's clear. And LNG, again, you understood is at the core of our ambition. Why? Because this market experienced a growth of more than 10% per year in the last 5 years.
The first semester despite the pandemic, it was plus 7%. And I heard yesterday that in August, the Chinese demand has grown by 12% in August. August. This is a market which clearly because in fact in the energy transition there is a strong case for gas replacing coal. And when I heard this last week President Xi from China announcing carbon neutrality by 2,060, I'm sure it's one of the good news for promoting LNG.
Of course, Renewable will be there as well and hydrogen and EVs in China. But gas will be clearly have a share a lion's share in that mix. And so we are very well positioned. On the top of it, there is not only the demand, but on the supply side, it's true that we face since last year a form of oversupply, which has been accentuated by the pandemic somewhere. But because of the pandemic, there is a lot of projects which are delayed in terms of sanctions this year, no new projects.
Last year, all the commentators were afraid to see too many projects by 2025. The reality is that when you delay by 1 year and maybe 2 because I'm not very optimistic about next year and the oil price considering the inventories, If you delay by 2 years, there is no way to accelerate LNG projects. It takes 4 to 5 years to build. And so that means that there will be a tightened supply by 2024, 2025 as you can see in the chart, maybe even in 2023 even at only 5% growth. And that will benefit from Total to Total.
Why? Because we sanctioned projects last year. And so we are in a very good position to benefit from this evolution of the market in LNG. I will not be long on this one. You know that slide.
We have established we are the number 2 worldwide player in an integrated value chain. We are producing in 11 different plants. We have regas terminals. We have long term customers or a world system. It's a matter of size integration to capture value.
For the next 5 years, we will increase our energy sales to 50,000,000 tonne per year from 35,000,000, so still an increase. And why? Because primarily, all production will grow by 10,000,000 tons from 20,000,000 more or less to 30, 18,000,000 to 20,000,000 So that's the program. And again, I will not be long. I will answer the questions if you have.
But we have 3 flagship LNG projects, Arctic 2, Nigeria, 20 7 Mozambique LNG. They all progress well despite the pandemic, 38% progress for Arctic. Mozambique LNG Engineering is progressing very well. Project financing is in place and all the early works are done to welcome the construction. Just a note, if you add the 3 figures which are at the bottom of this slide, it represents $1,500,000,000 of cash which will be generated at the project level in group share.
So you will understand why after that I will speak to you about growing cash flow from LNG. And it's not only because we give you today a view not only to 25, but to 2,030, but it's an important message. In fact, with all the work which has been done in the last years, we have already in our portfolio enough resources to feed the future growth beyond until 2,030 by an additional 10,000,000 tonnes. In fact, we have generated many options in, of course, the Russia giant Arctic Resource with our partner Novatek, which is targeting 70,000,000 tons of LNG by 2,030. In Mozambique, we're beyond the first phase.
There is more to come, much more remaining resources, which could be developed in synergies with other operators. We have in the U. S. Projects which are expansions of existing plants, which are generally quite profitable like an expansion of Cameron and also new project we want to develop in Baja California. And Papua LNG has been delayed because of the pandemic, but it's there and will be developed.
I'm convinced because of this geographic position. So it's another option. And there could be more to come. So that means that Total will not spend a lot in M and A to acquire LNG Resources in the next 10 years. We have what we need in our hand.
Again, I mentioned these figures already. We approach this all the integration that the LNG marketing and trading teams are taking creating value from scale and arbitrage. The strategy of Total, let's just one minute on the right hand side of this chart. As you can see, there is more and more integration. In fact, we want to dedicate when we take some market risk, when we market LNG by ourselves, we took it on our balance sheet.
We want to do it in an integrated way. We think that being a pure merchant player is exposing to volatility of the market like it's the case today where you are you have some commitments to offtake some LNG, but there is no real market to absorb it or at a very low price. And it's much better to come back to the integrated approach, which is that we will market the LNG we produce. Of course, as you know, in the past, we have taken some offtake commitments from the U. S.
LNG. But in the meantime, we are developing positions. And so you can see that this white part at the top of the column is diminishing and that will be the trend clearly to exit from a pure merchant risk, but to take the risk if we have on the also the profits coming from the production and the infrastructure, I would say, the LNG plant. I would say that we have a good and again, you've seen this chart, this slide last year, but it's useful to us to express what it means integration. It means that when we are developing a customer portfolio in Europe either through gas fired plant or through customers B2C and B2B customers, we are having a short I would say, of LNG as it represents 11,000,000 tonnes of short.
And these 11,000,000 tonnes, we have the infrastructure to fill them. It's owned by us, very gas capacities. We have 20, so we can manage them. And we have also the portfolio and Europe will represent around 20%, 25% of our sales. And Europe is key because it's a very liquid market.
It's very accessible. And so and you've seen that it's the sort of market with last resort. We observed it last year when the price of LNG are low. Everybody is coming to know, but it's better to be able to control your infrastructure. And by the way, we are quite happy to see our regas capacity being full and making money in this type.
So it was again the advantage of the integration. So that's in terms of cash flows that you can expect from our integrated LNG business. We put there the 2019 figure at 64%. So you can compare to what we'll be able to deliver in 2025. Again, the production will increase by 40%, the LNG production from 500 something to 800 on this period with the projects which have been all launched.
And you can observe that in fact we'll be able to deliver the same cash flow at $40 per barrel than last year at $64,000,000 you have 70% more or less of the LNG portfolio, which is linked to the oil price. It's why you have clearly an upside. And at $60 it represents between $1,500,000,000 to $2,000,000,000 extra cash flows. You have the same assumptions of NEP and GKM to be able to compare and to have the sensitivity to the Brent price. So I've been long on gas, but I cannot stop there on gas without speaking about methane because again, if you want to be consistent, we have to be consistent with the climate ambition.
And the methane when we speak about gas is in fact lowering OSCOP 1 and 2. And there, there are 2 informations. The first one is on the right. In fact, when we look to our operating gas assets, I can say today that we are almost near 0 emissions because the methane intensity of our operating gas asset is lower than 0.1%. I don't know if we can measure it lower than it.
But I mean that honestly, we are at the top of the class. We have nothing to we continue to drive it and surely not to hit him coming back higher, but we are very we are very strong position. The methane emission of Total as a whole are coming more in fact from the oil business than from gas business. Globally speaking, if we take oil and gas, that way the average intensity is around 0.2% and we look to drive down because as you see on the left, we have a program and we are investing to continuously reduce on flame emissions. We've done 45 percent of reductions in the last 10 years.
And we'll continue drive down in particular by stop flaring, by limiting the flaring or eliminating some cold vents on some mature oilfields. So there is a program, methane emissions. And really there, I think we are participant to many initiatives. And to be transparent of that is very important when we want to be a leader of in natural gas. The other way to of course to be consistent with our climate ambition is not only to invest in natural gas, but also in bio defense and clean hydrogen because these are the ways to de carbonize natural gas.
On these two business, it's quite new to Total. 2020 is an important year because we have established 2 business units recruiting people outside the company to bring expertise, one for biofuels and the other one for clean hydrogen. I mean for hydrogen, but in fact for clean. Clean means that we are color blind in total. Even if I will tell you that green hydrogen when you are investing a lot in renewables is of course quite attractive.
On biobefane, at this stage, we set a first target. We probably will increase it in the coming years when we'll have a better understanding of what business. But we set a target 10% of the gas we supply to our CCGs in Europe should be myomethane. So we will decarbonize our Scope 1 emissions in fact there. And so this would represent around 5 terawatt hour per year.
On the green hydrogen side, of course, there are many interests in the company for hydrogen. It's of course for the marketing. It's a way to decarbonize, I would say, the whole transportation, the trucks, the buses, trains, private fleets. So we are looking to that business where we are today some small positions. I will come back.
But we are also looking to produce with hydrogen and we will have a sort of showcase in Lammed, our biorefinery, where we want to establish an industrial project with 100 Megawatt solar plants feeding a 30 Megawatt electrolyzer. But we are working on it and we'll come back on it when we'll have clear ideas. But it's clearly in fact, in the next 5 years, our plan is to have one green hydrogic project in our hands to better understand it, but the real one with intermittencies, the storage issues and with real customers and a blue one, which means decarbonizing by capturing the CO2 from SMR and sending the CO2 in depleted cells. This one we are looking in the Netherlands. So that's for gas.
Now my second dish is electrons. This is a new one. You didn't hear. So you will hear a lot of electrons much more than you will ever hear within Total. But you have seen the news coming months after months since the beginning of the year.
We have been quite active and it's because by the way all this activity of our teams. And in fact, it's just that we received the fruits of what we grew for the last 2, 3, 4 years 2020. And because of that, we have a better visibility, a better understanding. I would say we have figures. We have models which we can add and tell you today what we can deliver not only in terms of capacity, production, but also in terms of results and cash flow like for the other business.
And I think as soon as we told you we will spend more in that business, of course, we need to be clear about the value creation. So we can do it today. We'll do it and you'll notice what I already said. Our development in the electricity will be along the full value chain from production to trading through trading and storage to customers. This is why we develop customers as well.
You have there some figures and I will make one comment. You see that by 2025, we expect to have 9,000,000 customers in France, Germany today in France, Belgium and Spain, we have around 6,000,000 customers. So we want to grow between today the in these businesses. And we will produce, if you add the production the net production coming from our gas fiber plants and from renewables around 50 terawatt net. The difference between being supplied in France by some power coming from the nuclear system at which we are eligible when you are a new competitor in the system in France.
But I would add another comment and just to educate you the way we'll speak about electricity. You will hear us speaking about growth capacity and about net production. Why this choice? It's not to grow the figures like I read in the newspaper, not at all. It's just growth capacity.
It's a way to it's a good metrics for understanding the development phase and the financial the CapEx that we need to finance if we want to build these plants, because we are ready to build and develop the plants at a 100% basis in total. So that means a lot when you look to the development phase. Having said that, gross capacity is not at all and other capacity, other growth or net by the way is not the right metrics to speak about profit and loss, to speak about revenues, to speak about cash flow. Why? Because like in E and P, when I am announcing that we sanctioned Meru, we expect Meru free.
We speak about the project of 180,000 barrel per day, I think. It's a 100% growth capacity. And then we have our own production will be 30,000 barrels per day net. So there again we make the difference and we speak about net production which is a basis of all the P and L, cash flows and revenues and which is another phase of the project, one it has been invested and derisked. It
is true
that in our business model and I will come back on the business model, we intend to sell 50% of what we have invested to cash in part of the value immediately to derisk also the project. And then we'll have in our net production 50% of what we have developed. So we will continue to speak about growth capacity and net production. Last word, in electricity, capacity doesn't mean a lot of things. In E and P, in my example, when we speak about 180, there is a good chance that E and P will produce at 95%, I would say, of the capacity.
In electricity, when you speak about capacity, it means nothing because your solar plant will be run at 20%, your wind farm will wind onshore at 30%, your wind offshore at 50. And your gas fired for your plant, you don't know. It could be to 20% to 60% depending on the weather of the other because it's not a base load. So that means that again, I'm advocating that this gross capacity is the right metrics in order to better evaluate the investment phase and that net production for the P and L. So it has been long, but I want to clarify that today.
So the business model I just mentioned and I have often the question, but all that is not profitable. I mean, it's not profitable. It's profitable. It's maybe not delivering the same upside, but when you invest in the oil business because, of course, as I've seen in the previous slide, when you are in the oil business, you have the upside when the price is going up. You have also the downside when the price is going down, which is your business model is less stable, but it delivers profitability at the end.
And it's why we say we have a capital light model. And the way we envisage our development in that business, I reiterate to you is a typical project IRR will be around 5%. But we'll get so first, there is a lot of attractiveness from the financial world. And why is there a lot of attractiveness from the financial world to finance these projects? Because this is the other part of the slide, These projects are offering predictable cash flows with long term upside.
And the predictability of the cash flow because of the PPA either guaranteed by state or corporate PPAs are attractive enough to financial institutions to be able to bring money. And so we can leverage easily without being ourselves, I would say, a green company. But it's easy for Total to leverage our robust balance sheet to finance this project with the same competitiveness even better sometimes than our competitors. So we put typically seventy-thirty, but yesterday we approved a project in Japan. It was 85, 15.
That's why at the end we can say that it's in terms of equity we have to inject and capital light, it's quite we can leverage it. It's I would say and this is consistent with the CapEx we have announced. And then we will farm down 50%. Why do we consider that farm down is important? It's not only a matter of accounting.
It's more fundamental to that. You are signing PPAs with 3rd party states or corporations for 10, 15 years. You never know why quite can happen. I'm afraid some states, even European stage could sometimes envisage to revisit their contracts. So coming down is a way to cash in immediately part of the future revenues while derisking 50% of the project.
I think honestly, this is the same type of business models that we applied in our Oil and Gas business. We are never 100%. We share the risk because of the magnitude of it. But when you look to offshore wind project, frankly, to be 100%, it would be quite great. So there is this.
And at the end, the target permanently to us is to have more than 10% return. Projects in Japan we looked yesterday was far above 10% more in the 20% plus to be honest. But it's true that I can confirm to you that all the projects which have been announced by Total since the beginning of the year have reached that threshold of at minimum 10% and some of them are above, thanks to that mechanics. So the other advantage is why we see some value to invest in renewables is that it's strengthening our group business model because it's balancing the cash flow risk profile by giving predictable cash flows. And it has some long term upside because beyond this 1st period of PPA, there are some upside.
Solar panels are there for 30 years not for 15. And even if you have to change something, most of the investment has been done, including access to the land. And in the wind farm, you can change the turbines for higher more powerful turbines and get more energy from your same location. So there is a life beyond the PPA. And this tail value, of course, we are entering into merchant markets with volatility and the renewables will increase renewable volatility in this electricity market.
That's clear. But it's offering to our successors in 15 years new cash flows with investments being largely done. The second upside will be to
be able
to produce green hydrogen from these renewable plants because you can have easily access to marginal zero cost electricity and then store your energy. So it's a way to enhance the production capacity from your renewable investment. And last but not least, trading, aggregation. The more you have decentralized source of energy, there is clearly added value to be able to aggregate all that and to deliver it to the grid. And that's the competence on which we are building in the company and we will deliver other value.
So I was long there, but I think it's important to explain you why we consider that these investments in renewables and power is not only a matter of being responsible in terms of climate change, it's also fundamentally to create value for the long term for our shareholders. So I didn't mention it for just for fun. I think you read it on the first slide, but the capacity we are targeting by 2025 is no more 25 gigawatt, but 35 gigawatt. I know that people were asking themselves why it's coming from the 25 gigawatts from 2025. The reality is that the activity of our teams has been great since, I would say, last 2 years.
And today, when we look to what we have in our portfolio, we have already this 24, 25 gigawatts, 24 or 25, but let's say we have them. We have 5 gigawatts, maybe 6 by the way in operations. We have 4 or 5 gigawatts in construction. And we have built a pipeline 5 gigawatts being announced in solar in Spain, in France and in other countries. So a question to ask ourselves, okay, we are there.
We know that in the renewable business for this type of solar and offshore wind onshore wind, sorry not offshore, onshore wind. The time the duration of the projects is 2 years, 2.5 years. So we can still increase our ambition by 2025, but we will continue to work in 2021. And this project 2021 to mid 2022 will feed our renewable capacity by 2025. This is why we have raised the bar on 35 gigawatt to 45 gigawatt building again on the 2020 dynamic, where I would say that we have been not only able to capture opportunities, but at a low entry cost and that's attributed to
the teams.
So I speak about production because at the end, as I will show you figures of P and L, what is important is production. So 50 terawatt hour by 2025 of productions, 40% from gas, fiber plants, 60% from renewables. And 2,050, clearly priority will be given to the growth in renewables more than gas, fire power plants because in Europe we see a limitation to that. And the target is to reach the equivalent of 500,000 barrels per day, so 120 terawatt hour per year. At this level, clearly, we will be among the top leaders in renewables.
But the ambition of Total, we are among the top 5 in oil and gas is to reach the same level in renewables. And that means that we'll have to have the engine to continue to fill to feed our future growth by adding 10 gigawatt per year of new projects of gross capacity. This is an important slide just to show you that what we are building today is quite a unique renewable portfolio because we look we'll have at the end for various vehicles a full worldwide footprint representing again this 35 gigawatts. And you see that, of course, Europe will have a share lion lion's share, sorry. But will have be also quite strong, quite big in India around 6 gigawatts.
And China and the U. S. Are also areas where we intend to develop and South America. By the way, this when you look to this map, it's not exactly the same map that we have in Olenka. So this business is rebalancing somewhere the group geopolitical profile.
But again, I said to you, we have one competitive advantage is to think at the worldwide on a worldwide basis and to look to various opportunities. This is what you can see. Essentially, Africa is not well represented. It will be our next challenge. But I think it's because today our renewable teams are going where it's easy more easy to have access to capacities.
But having with the one tech story, I'm convinced that all the people who know very well Africa and the company will be able to accelerate that development in that continent. I will not be long there because Philippe will come back in a Zoom on offshore wind. Just to tell you, I mentioned it, but yes, we have decided to be pioneer in floating offshore wind. We have no late. On fixed bottom offshore, we are late compared to some competitors even we acquired some interest in the very large projects.
But we think that there is a huge potential for offshore wind. But this technology will still benefit from strong policy support in coming years and we want really to be at the forefront of this technology. So these are the figures that I promised to you. Not only figures, a little more than that will even occur for the ones who want to try to measure what is behind. And so the important figures that we'll deliver this net production of 50 terawatt per hour by 20 terawatt hour per year in 2025 will deliver a result of $1,000,000,000 cash flow of more than $1,500,000,000 and capital employed of $15,000,000 People will make the math.
We say it's a ROAD share of 7%. But the clear part of that, unemployed capital unproducing capital employed because we are in a growing mood. So we'll continue to feed capital, which are not all producing during this period of building this business. So let's come to the 3rd dish, which is a liquid, not to drink, to be sure. The water is defined.
But there the motto is value over volume. Clearly, again, remember what Helu explained you about the trends in the market. And a word about the market, having said that. And you have seen that all the presentation is done at $50 $60 per barrel. And that when we announced recently our price deck for making our impairment test, we said we give a price deck which in the coming years will is low, 30 5 today, but will grow gradually.
Why? Because I'm not I will not speak about OpEx demand etcetera. Today, I'm speaking about investments. We are all companies have lowered their investments. Dollars 300,000,000,000 will be invested in 2020 in Upstream.
I suspect that 2021 will not be much higher because everybody will be cautious about it. Only 250,000 barrels per day have been sanctioned, almost nothing. 1 of the project by the wind is in the Total portfolio with Mero Free and maybe a second one with Uganda will be there. So we continue to work. And on the top of it, not only lack of investment, but also shareholder dynamic we observed in the U.
S. In the last 3 years, which of course has somewhere overcome the lack, the deficit of investments. There is less enthusiasm. Clearly, the financial investors not only visible, but really last year are asking themselves questions. So we think that the dynamic there, even if our U.
S. Friends are always surprising up, is much more uncertain than it was last year. And the lessons drawn by the fact that U. S. Shale oil has been among the production which were curtailed among the first to be curtailed voluntary, I think is a strong signal.
So our vision is that there will be a reduced supply, not enough investments to compensate the natural decline, which is supportive for oil price medium term rebound. Cannot tell you no, but by 2025, we'll be very surprised if we don't see $50 even $60 per barrel. But remember, by the way, that today we are sad, but we were at $72 in 2018. So in this world and in the we are all well paid to know that volatility means really something in the downside and the upside in the old market. So for TOTAL, as I said, value over volume, it's a matter of fundamentally adapting our value chain in the oil business to the demand and in particular in Europe.
We said we are integrated between production liquids because we have oil and condensate in that figure of course, which are liquids, refining capacity and oil product sales. What you can see in 2019 because we have in the last 10 years, we have to diminish to adapt our refining capacity to the demand in Europe, we have disconnect between ourselves and our refining capacity. But it's not only a matter of integration and we will continue to drive down this refining capacity. By the way, we have done the work in the last 3 months for 2025 because we have announced the divestment of the Linzea refinery and the transformation of the Grand Prix platform in the 0 oil platform with a unit of biofuels to produce more biofuels. So that's a trend I think.
And on the demand on the sales, we'll increase the biofuels and we'll have again to adapt ourselves to the demand, in particular in Europe, where we are a very large retailer. So that's the trends. On the production side, I'd say that we have built our position and we are the leader in terms of low cost producer among the majors at $5 per barrel and we confirm that we will maintain that level. I'm sure Arnaud and his team will do better, but $5 is already quite low. And so that's something which is embedded in our strategy for 5 years to look for low oil low cost oil.
And this has helped a lot of course to diminish the group cash breakeven with the help as well of our downstream businesses in refining everybody. But we are a low cost oil producer and we intend of course to build on that advantage. Why are we in such situation? I would just insist today a few minutes on the fact that we have a strong asset in our portfolio. It's our strong presence in the Middle East and North Africa.
Because when you say my strategy is to focus on low cost oil, where do you find it? To be honest, you find it in Middle East and North Africa. And recently, we have continued to build that portfolio, accessing to the Abu Dhabi concession, accessing to Al Shein, accessing to Berkin Basin in Algeria. So consistently, we have built this portfolio, which represented a 40% of group power resource. So when we said that strategy, it means that we have that already also.
We are it's a history in total. This represents 650,000 barrels per day of production, oil and gas, but the oil 450,000, which is 1 third of the oil production of total. And look, the average cost of production is $3.5 per barrel. So this oil will be produced for long for sure. And the profitability is good, okay?
I know that people say that in the Middle East, fiscal terms are tough. It's clear. But at $35 per barrel this year we are quite happy to have these productions which giving us because there is less sensitivity a ROACE of 10% or $35 per barrel. I'm not sure there are many oil and gas assets which can deliver such profitability this year. And so this is a position which we intend to continue to build.
And if we have opportunities to grow in that region, Total will look carefully and it's a priority. Another region which is just to fight the idea that deepwater is permanently a high cost business. When you look to the giant fields we are developing in Brazil, this can be qualified because they are giant of low cost opportunities. And we have built a material positions in the last 5 years there with the Meru development, which will produce almost 700,000 barrels per day with the Yara development, which has the potential to increase. We are operating in LAPA.
We have in our hand, it seems according to my explorers, a unique high profile exploration license that we intend to drill soon. And Brazil, by the way, it's not only a matter of low cost oil offshore, it's onshore, a growing market for marketing and services division for biofuels. So the attractiveness of Brazil for Total is it's an important country with a large population, large markets on which we intend to continue to grow. By the way, it's also a land of opportunity for renewables and power and for LNG. So Brazil is one of these countries which is we've been the focus of the strategy for the next 10 years.
I was thinking about exploration. People are asking us what where do we go you go with exploration with your climate ambition. How do you make all that consistent? I think it's clear that exploration will have also a channel of transformation, not to stop exploring. Don't misunderstand me.
But to explore things, objects, prospects which are in line with what we expressed, which is low cost oil in terms of development, not in terms of drilling. And that's something on which I know that Kevin MacAllan is working hard with his teams. Of course, today our portfolio is not really with this trend. It was built. It's long to build a portfolio trend.
But I can tell you, but the new licenses that we will acquire, the Executive Committee will be very clear about the fact that we want to dedicate up to $1,000,000,000 We cut the budget, but with $1,000,000,000 you can find oil on these targets which fit with our strategy. And I would I'm happy to say that today we have a clear positive dynamic in exploration and I pay tribute to the team, so it's for us, In particular with the Block 58 in Suriname where we entered last year, the first wells have been 3 successes. They will have the 4th one is coming and there is more to come in 2021, number of prospects. We will have to appraise all that. It's lighter for the time being with gas.
But honestly, the challenge we have been given to us as we become operator very soon of Suriname is to do as we have done in Angola. In Angola, we discovered in 2019, 1996, it was into production in 2 1002, Girasol. And it's possible, but this is a Godal block. Block 15 could be a Godal block as Angola. And so the challenge will be to put production Surinari by 2025, even if it's a short and quick development.
So that's somewhere in which we work and which we'll feel. So future growth, again, if it's giant, it will fit with the strategy. Just to finalize on oil, because again it's a core activity for Total. Don't misunderstand my message today. We have a portfolio of projects which have been sanctioned in 2019, which will have sanctioned today this year and which will come tomorrow, Brazil, Gulf of Mexico, Nigeria, Angola.
And one of them being Uganda. As you've noticed, we have been quite active to act countercyclically. We made a deal with Tullow, which was this year better than the one we stopped last year. So we were right to stop and to relaunch. We have maybe because also the condition economic conditions are lower.
So we are working on this one. The tenders are expecting this month and we hope we'll be able to our target is to sanction the Porsche project before year end. All these projects, of course, when we sanction them, we review systematically the CO2 production and the way to is the teams are really designed the project to minimize the emissions. And because part of the climate ambition is to ensure that our investment in all projects are consistent with our Climate ambition. And in particular, we look carefully to the carbon intensity of the project, but also of the returns.
You can see that the portfolio of projects we have, all the projects have a return of more than 15% at $50 and by the average technical cost, OpEx plus amortization is around $16 so again in line with the strategy. Just when we speak about production, oil, we must speak about scope 1 and 2 because it's like on gas. I spoke about methane. We need to diminish our emissions. We set a target beginning of last year of beginning of 2019, yes, of lowering our emissions down under 40,000,000 tonnes despite the fact that there is an increase of activity, I would say, by 2025.
We are working on not only on that and I can't assume, but we'll reach these 2025 figures. And we will maybe revise it, but we need to work what we have done this year is to mobilize all the teams. And recently, we took the opportunity of the 5 gs business plan to ask them to come with projects to reduce. They proposed and have too many initiatives, I would say 500 emission reduction initiatives. Some of them were at $1 per ton of CO2, some were at $200 or $300 per ton.
There was a whole spectrum, but we took everything. We didn't took everything, to be honest. That's true. We put in our 5 gs and business plan all the initiatives with other 4 gs on because it's a metric we have taken. The others are not forgotten.
We will have to work for them to continue to relentlessly lower our CO2 emissions. But what I think is that I was very pleased to be honest with the results is that we have asked again all our engineer technicians to engage themselves. They have many ideas. We can cross fertilize because some ideas which came from 1 subsidiary could be used at another one. So there is a good a great potential to lower this COP 1 and two emission.
And I'm confident we'll reach the net zero by 2,050 or sooner even. The other activity we have is around carbon sinks, where our teams we have established 2 teams, 1 working on natural based solution, the other ones on carbon capture and storage. You've noticed that we entered the Northern Light project. We'll not spend time today, but in February, I promise you that we'll come back on this COP 1 and 2 emissions, the way to reduce them, the way to offset them by carbon sinks. And our colleagues will have the opportunity to make you some presentation, but we took the choice today not to be too long because of this virtual exercise.
And last but not least, it's like in gas, we speak about methane emission and when we speak about biogas, hydrogen. On oil, we speak about scope 1 and 2 of the reuse emission. And we about the biofuels because it's a way to decarbonize oil. And Bernard will make you an extensive zoom on our ambition in renewable diesel. I will not be long there.
Just to tell you that first, we had a very first good experience in Lammed. It's profitable, dollars 3 50 per tonne on in the Lamed of cash flow from operations. So it's a profitable business, 1st. 2nd, that the refiners have one advantage that can easily convert refineries, existing plants into biorefineries, so it lowers the CapEx. So we have there clearly a role to play and Bernard will explain to you that his ambition is to be among the top renewable diesel producer, reaching a minimum 2,000,000 tons by 2025, if not 3 and 5 by 2,030.
So let's finish for the part
of the menu which we are increasing energy in gas, electrons and liquids. Now I'm going on reducing the part which is reducing emissions and in fact more importantly adapting the energy sales to the market evolution, which is what I will focus now with few slides in order to give you more details. So first that means that fundamentally it's not at least when we said we are willing to be carbon neutral together as a society, people said, Oh, it's a way not to do it. No, it's not at all the case. What we intend to do is to in power generation, in mobility and heating.
In power generation, in power generation, in mobility and heating. In power generation, we took the decision not to sell any more fuel to power generators from 2020 5. It's a way of course we don't want to lose the customers. So we'll have to work with them to adapt the system and to convince them that they can produce electricity with better tools and in economic ways we can develop storage solutions. There is a revolution of mobility on which I will come back and I think as well there is where some business to be done with our customers.
So it's a real engagement of the companies and the people, the teams in face of customers because by the way, our customers themselves, most of them have the same ambition to work carbon neutrality. So we meet together. We are in the same boat, I would say, to work in the same direction, bringing all expertise in, I would say, energy sources and their own expertise of their businesses. So this is a few things I will focus on, I would say, mobility and revolution of mobility going from oil and gasoline and diesel to other ways to run cars, planes, boats. Biofuels, it's not only a matter of producing and Alexey will come back on it.
We want also to grow our sales of biofuels in Europe, of course, where we are already the largest biofuel retailer, but also in the rest of the world. I mentioned Brazil. And biofuel should represent 10% to 15% of the fuel sales by 2,030. Gases for mobility is another axis of development. LNG for bunker fuel, we have been active.
We are not only active, we have contracts. Now we have some bunkering barge in the North Sea, which have been launched these last these months, I think. We have also natural gas for transportation. We have a position in the U. S.
For clean energy where we are shareholder, but also we develop positions in particular in Europe. And Europe we think by LNGV and NGV natural gas vehicles should be mixed to biomethane. We think that the market will evolve quickly to bioNGV rather than just NGV. But we also when we think to developing our position in India, where we are developing with Adani in the City Gas, there is a good opportunity to develop and there is a policy by the governmental policy to develop CNG in fact in India. And we intend so the network we intend to build will be around CNG stations.
And hydrogen, as we've noticed, few positions in particular in Germany, we are part of the Mobility Ventures. There we need to accelerate and it's part of this new economy of hydrogen that Europe wants to establish. Total will be one of the player of this hydrogen economy. And last chart, but I will not be long because there again you will have Zoom on electric mobility by Alexis and Philippe. The idea is fundamentally to take advantage of this emergence of this new business, huge growth, by two ways either to produce to manufacture batteries together with PSR.
We had the expertise of staff. And on the other way is to establish Orsafe as a leader on EV charging segments. You have probably noticed that we have some successes by in large European cities Amsterdam, Brussels, London now where we have acquired half of the existing charging points in the City of London. Again, I'll let Alexis developing that chart later. So all these evolutions on the demand will translate into the ambition of Scope 1 and 2, 3.
This is the one that's in May about the lowering of carbon intensity of the energy products. I would just like to remind a comment on it just to be clear again. And it's because a small chart on the right, you all know that, but it's better to repeat. When Total sells jet fuel to an airline company, and the airline company is using the jet fuel to make a flight on 1,000 kilometer journey, it will emit 22 tonne of CO2. This 22 tonne of CO2 are in the scope 1 of the LIE company.
They are also reported in the scope 3 of Total. In the scope 3 also of the plane manufacturer, in the scope 3 of the engine manufacturer. And so I know that for many people, oil and gas companies are so responsible for all the scope 3 emissions of the world. It's not the reality. And what more importantly, is that the chart for me is a symbol but if we want to tackle the aviation energy demand and challenge, if we have to be done together.
We have to make coalitions and each company which is on this chart will have to bring its expertise to find solutions. And of course, the leaders will be each of them or each of us each of these companies in those segments. So today on the top of the May commitment, we have added what I've announced at the beginning of the presentation. The fact that the evolution of the sales pattern I just described by adapting our refining and all product fuels, more natural gas, more electricity will be translated into commitments, 1 for Europe minus 30% by 2,030 on our way to net 0 by 2,050 and worldwide 2,030 lower than 2,050. So I have finished all the dish.
Now I go to the dessert, which is the last part to speak about, okay, this is a strategy, broad energy company. You have some insights. Let's see what it gives at the end of the day in terms of results with 2 words which are for me and for the Board. It was a conclusion of our last Board by the way by one of the Board members. He said at the end finally it's a matter of resilience and the matter of growth and to be able to combine both resilience and growth in developing TOTAL and convincing investors.
So of course, the fundamentals of resilience is based on these 4 pillars: HSE, delivery, cost and cash that will repeat. It's well into action in the company. The cash breakeven is under $25 per barrel in 2020. We intend to remain at that level. So that's the basics you are in a community business.
We have to keep the discipline. It's clear in particular on capital investments. This strategy with the strategy we have announced, we spend a lot of time to review of course our 5 year business plans to know how can we make on one side, we need to give the space and enough capital expenditures to grow with Renewable and Electricity business. On the other side, as I said, we want to grow the LNG business and to maintain our core activity, which will give future cash flows. We came to the conclusion that we can do it with 2022, 2025.
I will explain you why I make an exception on 2021 at $13,000,000,000 $16,000,000,000 depending on the oil price $50,000,000 $60 There is some flexibility. I think one of the lesson of last year, this year it's dangerous to give very precise figures. We have to be flexible and to keep some flexibility in the way we monitor our CapEx like Arnaud and his teams are doing on the short cycle projects. We need to keep that in mind and not to over commit ourselves. We have introduced a flow of $2,000,000,000 as I said, for renewables and electricity.
So we said we will spend the $2,000,000,000 per year minimum from 2021. In fact, it's exactly the amount we'll spend in 2020 on the chart, maybe a little more, we'll see. But we are in that range. And so with 2013, 2016, we can develop the program I have presented to you. 2021 is a different approach.
We don't want to launch a budget at $14,000,000,000 and when asking our teams in March to diminish it, It's quite a burden for all our teams what we have done this year to precise all the budgets around the world. So we prefer to start, I would say, at a level which is cautious, I'm clear. It's coming from the top. Let's spend €12,000,000,000 It's mainly organic cash flows because we also know that in these times selling assets is not a very good time to sell assets. We don't want to lose value.
So we'll start and build our budget on around €12,000,000,000 We'll see after the agenda of exercise. We'll come back to you in February. But of course, if there was a quicker recovery, we'll be able to activate some of the short term short cycle projects which are in the end of Arnaud and his teams, which we put for the time being on the back burner. When we think about CapEx and OpEx, cost reduction, that's clear that this year we have accelerated, I would say, our saving programs. We announced February 300.
In April, we told you on April $1,000,000,000 we increased it. But I can confirm to you that we are on the track to deliver the $1,000,000,000 of savings in 2020. So mobilization is very strong in the company. And we have decided to raise the bar there also and to raise it by another €1,000,000,000 for by 2023. Of course, it's more and more complex because the company is, I would say, well managed.
To be honest with you, if you would ask me if I can lay off 5,000 people, I don't know where I would find them. There is no way in total. It's by the way, I'm still convinced that the best way to mobilize and if our teams today are delivering the $1,000,000,000 In fact, we told them, okay, we don't frighten them by speaking about layoff. We thought you concentrate on delivering from your assets and delivering the cost savings And the company will be there. It's a matter of mutual support, but let's mobilize ourselves and we have the way to waver the store.
I think this is a strong message in the company. And again, yes, there might be rooms to streamline the headquarters, 10% maybe somewhere, but not more. And today, priority is more to continue to optimize operation. Digital, we have launched last year and we presented to you in February some digital initiative. We didn't cut anything there.
We continue full speed to deliver this $1,500,000,000 value, which was proposed by Promised by the teams. We have taken some immediate decision to freeze the equipment, which is a way to save some cash, of course, cannot be long term. But again, my message there is that we will deliver the €1,000,000,000 and the extra €1,000,000,000 by 2023. So coming to the end of the presentation, just to wrap up what we said about production, which is feeding again the upstream production is key because it's I would say most of the cash flow is coming from this production. So on the 2019 2025, we propose you a figure which is a little wrong.
On an average, it will grow by 2% per year. In fact, like we told you last year, there is a sort of plateau between 2019 2022 and the start of the ramp up will go from 2023, in fact, 2023, 2024, 2025. So this 2% per year, which make more or less 10% or I think it was 12%, should be spread more about 3 years than on the 5 or 6 years which is there. But it's just to give you. Of course, it's lower than last year, to be clear because last year we were thinking to acquire Algeria and Ghana assets from Alberco.
We took the decision not to do it because it was part of the, obviously, savings we had to do. So we are lowering our ambition by 20 25. But we have also, as we described, a portfolio of opportunities which will allow us to grow our cash flows. The quota impact has to be noticed as well. That's why I'm prudent on the coming years.
This year probably will end up by around €2,900,000 by the overall product because and it's good news. The OPEC countries and non OPEC countries are really implementing the quota. So it's good because it's supporting the price. Of course, the growth will mainly come from products from LNG, as I told you already. And the growth is also helped by the fact that we have quite a low decline in our portfolio because of loan 50% of production is on loan plateau.
This results in growing cash flows, which is the blood of the company. So this chart you can see that last year, by the way, we told you we'll have $1,000,000,000 per year of extra cash flow. This year we sum up at $5,000,000,000 because there again it's difficult to speak of per year because the next year we propose you at $40 So it's not linear. But when we took the last 12 months the average is $51 and the year 2025 of $50 and we compare the cash flow generated, the growth will be $5,000,000,000 at $50 This is the amount of cash additional cash flow. But it will be different.
It's not the same $5,000,000,000 than last year because we have less production on the upstream part, as I just said. But we have more electrons and the electrons and the electricity business will deliver $1,500,000,000 So in fact, it's not that we are back to the $5,000,000,000 but not in the same way. We're 10 months straight by the way. But this idea to drive the strategy to accelerate the strategy to become a broad energy company is delivering same type of results in terms of additional cash flows. You can see the sensitivity.
Another comment on this chart, $40 per barrel. Why did we mention it there? Just to show give you an indication to on which basis we said and the Board confirmed that we support the dividend at $40 per barrel. And you can see that by the way, if we are able to weather the storm at $40 per barrel, we will also benefit in the future years of the growth we are expecting from our businesses. This leads to this chart that you know very well.
The cash flow allocation for Total did not change in order of priority. The first priority is capital investments. We have adapted it to, I would say, the strategy. It's we just said $13,000,000,000 $16,000,000,000 $22,000,000 $25,000,000 more than $2,000,000,000 of renewables and power. The second priority is supporting the dividend at $40 per barrel.
And I confirm you that after having done the 5 year business plan, the Board, we spent some time to look to various scenarios, confirmed this support. And then of course in this, I would say difficult times, it's not easy to speak on the medium and long term. It would be premature to speak about growth. But the next priority will be on the balance sheet that we also always said. Today, our gearing is growing up, of course.
It was under 20%, will be probably around 23% by the end of the year, I think, which is acceptable. But if we have additional cash flows, we will dedicate them after capital investments to deleveraging the company and going back under 20%. This will be the next priority. And if we have more, we'll have time to discuss. We'll be flexible share buyback, dividend increase.
But let me be clear, priority is today supporting the dividend, investing in the company according to the strategy, supporting the dividend at $40 and gearing under 20%. It's not I know that for shareholders today, it's not only a matter of dividends and returns, cash returns. It's also a matter of ESG and a lot of you investors attach importance to this ESG commitment. A corporation like Total has to be a responsible company in all its dimension and to bring to society not only benefits and profits, but more than that. I would first notice that Total has been this week announced designated by the UN Global Contract as a lead company.
Fact, we are a lead company for the last 3 years, which is a good recognition of the efforts we do in Betfair. Of course, my whole presentation was about climate change environment. So the E of the ESG, I would say I covered it extensively during 1 hour, net 0. We are publishing today our new climate report, the annual climate report at the same time. We have published yesterday a new an updated biodiversity policy because this is the other big challenge for the planet.
And so I would say we are covering as much as we can the E of the ESG part. The social is as much as important. I mentioned to you that we will go through this crisis with no big layoff. Solidarity, mutual support is a real value of the company. And I think it's a demonstration of a social engagement.
Safety was explained to you presented to you by Arnaud. And I would say a word about diversity. Gender equality in terms of salary and pay for sure. In terms of responsibility, we can progress. We have progressed, but we can progress more for international managers, for women as well.
So that's a focus of the group on which we have set some objectives to the management. And the G, the governance, I would put first remind you that last year maybe it was it's not an hypnotic. The fact that the Board has submitted to the General Assembly of shareholder, it was voted new bylaws, which gives a new duty to the Board. It's in return. It was well done already to oversee social and environmental stakes.
It's part of on each project. So we take care to and the Board is very interested to understand the condition in which all these social and environmental stakes are taken into account in the project we submit for approval. In terms of governance, I am Chairman and CEO like traditionally in the French companies, but we have a lead independent director which is quite engaged. Was Patricia Verbizet. Now it's Marie Christine Croin.
And she's directly engaged with shareholders and she will have some roadshows herself independently as the Chairman and CEO and she will report to the Board and it's very lively. And last but not least about governance, my compensation is linked not only to climate also to ESG indicators. So I think this ESG approach is well embedded in the model and the governance of the company. So that's the last slide coming to the end. Again, summarizing, I would say, the compelling investment case that is Total.
What we offer to you today is on one side to transform Total into a broad energy company, which will really taking onboard the commitments on the carbon getting to carbon neutrality with strong commitment on scope 3 absolute targets. We will grow, but at the same time, we'll have we'll be able to tackle the dual challenge, growing on one side, profitably, of course, while decreasing emissions, more energy and less carbon. And you have noticed that we still come from LNG and renewables. And of course, at the same time, we are offering that strategy to this concept of broad energy company, profitable broad energy company. And we offer to investors a high yield dividend, I can say.
And we intend to support it as much as we can. And so this, I think, and the Board is convinced that what we call total energies with a big S, the real compelling is one case which should support stock rerating. Thank you for your attention, and I propose that we'll go to the Q and A.
Thank you. The first question comes from the line of Jon Rigby from UBS. Please ask your question.
Thank you. Hello, Patrick. So a couple of questions. The first is on the getting some sort of assurance around the investment that's now going into the Renewables space. I can see the strategic rationale, it's clear.
And you do talk about it being lower risk. But I think there's clear examples in the past. You are one of them with SunPower, for instance, where it's clear that the company entering a new area of operation doesn't fully understand all the risks that they are dealing with. And that's not an accusation to yourself. I think others have found the same issues.
And so what I wanted to ask was, to what degree and what assurance can you give us that you are comfortable that the risks you're taking, you have been able to sort of incorporate into your planning. And I'm sort of very struck by what looks like increasing sort of conventional wisdom that 5% or 6% return on assets can be grossed up to a 10% plus return on equity in an increasingly competitive environment. So I just wonder if you could just talk about that in the round. The second is, if you're correct, however, I'm struck by the capital structure you described at the end, so driving gearing back down below 20%, reiterating the dividend. Does the capital structure and the way that you deal with capital going forward change as the business mix changes through the 2020s?
Thank you.
John, I think that first on Renewables, again, Philippe will come back extensively. And I think that we are engaged in this business not from today. We made some mistakes. The first investments in SunPower was not the best idea. But since 2016, we have built teams who have invested in Total Iran in a minority position to learn to better understand to evaluate to see because Total Iran is driven by experts in renewables.
So the CEO was a previous CEO of EDF Energy New Energies, which is one of the success leader of the bill. We have made bad investments. We have made some direct investments and recruited people. And I can tell you that the Executive Committee of Total which is meeting every 2 weeks and where we approve all investments above 20,000,000 euros I think in that cell. We have I think every week now renewable projects.
So we learn and so it's accelerating. And that's things that of course we are asking more and more comfortable. And if today I am able for the first time in front of you to tell you, yes, we are we embark in this board is a new strategy and we are able to use the word transform and we will we have ambitions that we put into in terms of net production of the equivalent of 500,000 barrels per day 200 in 5 years, 1,000 barrels per day is because as the CEO and with Executive Committee, we have the feeling we have but we analyze the risk of those projects. It doesn't mean that by the way, it's true that we have to anticipate what does it mean a world an electricity market in Spain for example where you will have so many solar plants intermittants going to the grid and all producing when the sun is at the top and less there is in the night there will be of course an intraday volatility which could be huge which by the way means that it's why the word storage appears in the presentation and we have remember quite soft with the idea that it would be helpful to develop energy storage capacities in the coming in the future to develop this new waybill business.
But it's clear that the electricity world not only for Total, for everybody will offer new patterns which could with new risks. It's why by the way we need to be very strong as well developing our trading teams to be able to interconnect the market and to deliver the value out and to manage that risk. So my if today we are able to shape a strategy and to show you some figures and to give you some objective, 5 years is not far from where, it's tomorrow, is because we consider that we have a good understanding. I would not have done that presentation even 1 year ago. But we have again accelerated and our teams are delivering to us more and more projects.
So that's the first question. And honestly on the return target, I don't lie to you John. I can tell you as a model works, of course, let's be clear. It works because there is today very low interest rates in the market. That's clear.
But I will tell you if interest rates are coming up again. The project will not be visible up at 5%, but we need more not only for Total but for the competitors. So that's clear that today you are in a specific situation where you can leverage these very low interest rates. And at the end all the equity we engage in the 10 gigawatts projects we have announced this year have a return of 10. It's a minimum because in India it was 13.
In Japan 20, I mentioned. So you have more. So it's there is no miracle. It's just the situation of having access I would say to capital with a very I mean to finance with a very low interest rates. I don't know if I does capital structure has changed as business changes.
So for
the balance sheet and payer?
Honestly, I'm not sure to capture it. Sorry?
The sort of follow-up was the capital structure that the idea of where you want gearing to go, where you see the dividend is sort of couched still in very much in sort of oil and gas major terms. I mean is that going to still be the case? Or would you look at different capital structure models as you go forward because the business model changes?
Yes, but no. I think to be clear, John, I think we cannot shift from one day to the other. I'm convinced that we are today our challenge is to convince the investors that the model we propose which is to create this multi energy company, this broad energy company Having some on one side oil and gas and electricity in a wheel is viable and that we can develop. We need time to do that again. And to do time, I think what we think is the best position for this transformation for us as an oil and gas major, but we still are and we intend to remain.
We don't enter into a decrease of our oil and gas business even if we stabilize in 2030 oil production could be a little lower. This is not what we offer. We need I think we are offering to investors 2 things. On one side, the dividend yield because it's a way to tell us give us time to do that and we'll continue and trust us and give us the time and at the same time let us allow us to reinvest part of the cash flows in growing this renewable and power business. So it's premature today to say what you propose to change the payout etcetera.
I think this is and again we do it because we consider, but we can do it in the financial balance of the group of the company. And this was the whole exercise we have done since in the last 6 months to understand at which pace should we invest in order to grow according to our ambitions. And so with the structure of capital and spending we said, we can at the same time offer this I would say maybe unique model, but we want to offer to the market and to investors a highly dividend and at the same time giving us the time and the money to change the pattern of the company.
The next question comes from the line of Martin Ratz from Morgan Stanley.
Yes. Hi, hello. I have 2, if I may. The first one is about expressing We ourselves have done some analysis on expressing We ourselves have done some analysis on expressing the financials of a broad range of energy companies per unit of energy, per joule. And one of the things that struck me in this analysis is that if you look at companies that are more in the renewable space or the utility space that their capital employed or their CapEx budgets per unit of energy per joule are hugely higher.
They're about sort of 4, 5 times higher than oil and gas, which is already a capital intensive industry. So now sort of going through these numbers, I then thought, well, frankly, if the capital intensity is so much higher, maybe we should just expect that over time, the total energy output of companies like Total and your peers, that they will actually just shrink, I. E, there's only so much CapEx that goes around. Just if you move into a more capital intensive area, maybe just keeping up total energy output might just be simply too challenging. But today, you're presenting a sort of kind of sort of contrary sort of view to this in the sense that not only are you talking about total energy production going up, but then seemingly also moving into these very capital intensive areas.
Now we often have discussions about what are the returns that lie on the other side of all these investments. But the transition itself is also quite interesting in the sense that it sort of suggests sort of quite a large CapEx hump, a period of very rapidly rising capital intensity. And I recognize that this is quite a long winded way of asking, in principle, a relatively simple question. But are you sure that $13,000,000,000 to $16,000,000,000 in capital expenditure is really enough to make this the changes to the business mix that you propose, rising total energy output in more capital intensive areas? Is this $13,000,000,000 to $16,000,000,000 really enough for that in the long run?
Again, for the next 5 years, the way we have done it, I can tell you, it's a clear approach where we look to what is the amount of equity we need to inject in all renewable projects in order to grow. So we have made it and we know because we have again between there are various models between the Indian projects, Spanish projects, the French ones. So today we have various models. So we are able to have a mix and to have a good evaluation of what will be required. And as I said, to grow at this pace that we propose to reach the 35 gigawatts by 2025, we need €2,000,000,000 plus I would say and we put that as a floor.
And we look also to the rest of the company to look to what can be arbitrated or not without impairing of course the cash flow of the company. And that's the results that we gave you are a clear, I would say, bottom up approach of the organic CapEx that we need. Then there are assumptions about acquisition and divestments, which are giving you the capital the global capital investment. But yes, I'm confident that with this figure. And again, it's clear that and that's the advantage of being not a utility, but maybe an oil and gas company, that we have the leverage of the oil price.
And so is the price going up again? It will go up again. We'll have extra cash that we can allocate in order to monitor this CapEx while we give you a range. But yes, I'm confident that we can stick within the $13,000,000,000 $16,000,000,000 range. It's also true that doing that we have made some arbitration in some segments in line with the oil strategy, I would say.
So we revised the oil assets that we have not only in upstream and in downstream as well to say, okay, what do we want to do in this segment? How much do we allocate of capital? And because the demand will change, so why should we invest in many retail networks if we think the world demand will lower? So that's question mark. So there are some arbitration behind it in line with the strategy, but no I'm confident on it.
I think on the first point, again, many I try to spend a lot of time myself, I can tell you, with Eller together to read the reports of all our competitors in the utilities competitors, the financials to better understand the metrics and to be because we wanted to make a presentation where we could find the metrics which could be consistent. To be honest, the notion of CapEx is not maybe not exactly the same than us there. I have the impression they take the full CapEx. I would say the growth CapEx. We take the net CapEx.
When we give you a CapEx figure, this is the equity part we take into our CapEx figure. Of course, the off balance sheet is not in the CapEx figure. Of course, that means that the off balance sheet, obviously, our total will grow. But from this perspective, we have a robust balance sheet, I would say. And at a certain point of time, it will not go in infinity because you will recycle your leverage.
Because once your projects have been delivered, you can for 6, 7, 8 years, you are recirculating the same amount of balance sheet commitment. So I would say that's the way we look at it. So I'm but I'm pleased that you support the petajoule per day approach. I hope that all your peers which are participating in the call will do the same. Thank you.
To be honest, I have difficulties here to transfer all that. Okay, next question.
Your next question comes from the line of Lidar Rainford from Barclays. Please ask your question.
Thank you, Patrick. And I will get you to Petitjuls as well. Two questions, if I could. The first one on the tech center that you're establishing. Can you just walk me through how is that different to the digitalization factory that we were talking about back in February?
Does this build on that or are they 2 completely separate areas? And then the second one is and it's linked a little bit back to John's question earlier. There is a lot of change within Total. You are accelerating that change. How do you prepare the organization to perhaps move more quickly than it has in the past?
So for example, you talked about Africa and wanted to build up the renewables capacity there. How do you do that quickly enough now? And effectively, does that decision making process need to change from what it has been historically? Thanks.
Okay. The first one now it's different Lilian. Maybe I'm not big there. The digital factory is purely dedicated to digital. Of course, it's working for all the divisions and upstream, refining and chemical, marketing and services.
It's established. It's a new tool, 200 engineers going to 300. We don't want to disturb them. It's brand new. So we'll let them work.
They might be later in the future we'll see, but we don't want to disturb them. They have to deliver. We have some, I would say, roadmap of many business cases, which are by the way given to them by the assets, not by the technical centers technical divisions. So of course, you can think we can merge everything. This one we come to protect because we want we have a clear objective for delivering value by 2023, 2025 and we want to build it to raise it.
Maybe later we'll see if we need to bring it. The technical center we want to create, the 1 tech concept, is really to take all the divisions which are supportive of operations and projects in E and P, in Refining and Chemicals, in Marketing there are more not so many. And in gas renewables program there are quite minimum, but there are quite a lot there are some hidden competencies somewhere in the various subsidiaries. And to bring all together in order to be able again to use existing competencies to build this industrial basis for Gas Renewables and Power and also for I would say training maybe helping them to in terms of evolution of competencies. So that's a different approach.
But again, the idea is to have a core center and I would say to use the existing competence to be to build our Renewables Board and Power Business. To Philippe, you take the second one. Renewables in Africa what do we need to do? I will tell you what we need to do is to change the regulators of electricity in Africa.
Yes. Clearly, as it was stated, there is a real potential of developing renewable in Africa because mainly with solar we can compensate for the lack of development of the grid and there is a lot of sun. Having said that, these are costly projects, yes, they are capital intensive. And so we need to have a stable scheme in order to invest on a profitable and safe basis. And therefore, yes, the negotiations are taking place with the various governments in this continent.
And there are some small projects that are now being developed. We have some plants already in South Africa. We have some under development in other countries. But yes, this still takes time because yes, we want to develop this business on a profitable basis.
But your question is good Lydia just to add something. I think until now we have developed the Renewable business I would say as separate teams, many teams and trying to answer as I answered to John to better understand the business to Africa for example has been its total Iran which is in charge of Africa which has its own objective. And it's clear that in Africa, honestly I was joking, but we face in fact where we were trying to make gas to power plants. I remember in Nigeria I think Arnaud has worked hard on this type of project like myself. We face the fact that unfortunately financing a power business in Africa is quite challenging.
And in fact, we could hope that renewables which are smaller projects it could face which could solve the issues, but it takes some time because people are not prepared in fact. So that's a challenge. But I think also that the signal because today is a very important day. As I said, we have announced to attempt the concept of OneTech. I think a lot of my employees, I think, around the world are listening to what we say.
And I'm convinced that there is a signal there that these renewables and power are absolutely part of the business model of Total. And so when we'll go tomorrow, I've been in Angola, so I can't say because there are MDs already taking care of our solar projects. But when we go in all these countries, it will be obvious for management locally that they have the right, even if they are in charge of E and P to look to renewable approaches and we're driving force and maybe we'll go quicker. So I think the message would be enthusiastic. What we've done in Qatar as well has been in the same source of philosophy.
So my view is that the signals is launched today that yes we are embarking in this strategy on a worldwide basis. And I'm sure more and more ideas will come and people will embark into because they are all willing to contribute to this climate change challenge.
Your next question comes from the line of Oswald Clint from Sanford Bernstein. Please ask your question.
Patrick, thank you very much. Thank you for the tasty menu. I want to ask the first question on part of the whether you think you need to have more big customer and partnerships to really maximize the value in this chain. I mean you talk about retail customers in Europe, but I wanted to see, do you think that's enough? Or you should be focusing as well on some of these big global corporates, like, for example, some of these tech companies and just offering them global power contracts that utilities can't.
I mean, I know you have 60% of your customers in Europe and that's your base, but there's a lot of competitors there also trying to sell them clean power. That's the first question. And secondly, it's good to see the conviction around the gas and LNG. But I wanted to zoom in on India. I mean, a lot of LNG import growth in LNG expected in India.
You have a position there with Adani. But a
little bit tricky for us
to see just how profitable that value chain LNG value chain is in India. The Indian is clearly very good at getting low LNG prices. So I wonder if you could perhaps share a little bit of color around that LNG supply chain as it relates to India please? Thank you.
We'll leave Philippe answering to the India question. On the first one, to be clear with Philippe as well, we are working with the same big companies. These big tech companies are very good to make competition. And so today they want to sell the cloud to Total and so they have sent the cloud to my colleagues. And so in exchange of the cloud they all want to they are ready to take 50 megawatts of solar plants, which is not enough.
No, but we have this type of discussion, obviously. You have noticed probably that we have done something last week. Philippe will come back on it in his presentation something quite original. We have signed to ourselves, it's ourselves the largest corporate PPA between solar plants in Spain and all our European plants in the company. That means that we have designed a model where and the intent is to offer it to big corporations that we have done it for ourselves.
So we know if we can manage the risk of such a contract. And so the idea today of course is not to need to do it with Total, but we have done it for us and to go and we have some discussions typically corporate levels at high corporate levels. Sometimes CEOs are involved themselves. In other because all there is a lot of companies that really take ones who are willing to bring their electricity. Everybody is committing today to carbon neutrality.
And so this is a business which will lead to what you call corporate PPA, which will probably the next wave of 1. So on this one, yes, we are willing to develop partnerships. At the end partnership, there are big words, but at the end it's what do you sell to me and what do you buy to me. It's a bit clear. I'm like finding partnership, but it's more a matter of because none of them wants to be really I think in the end only one supplier.
None of them even if they like to establish monopoly, they don't want to be in the end of monopoly in front of them. So that's but again, that's clear. It's part of the and that by the way it's back to something on which but I don't know maybe Philippe will come back on it. It's all what we call the solar distributed generation business which is not big solar farms, but I think Filipe will come back on it. It's in presentation.
So I will leave him there. India, LNG, value chain?
India clearly we see high growth and in even 2020 we see a very high growth in India which is becoming one of the largest LNG markets. So development is already related in India. You have to be aware that we have been in India since now 15 years when we were partnering with Shell in Azira. And so we know exactly the behavior of the Indian customers. We have never been selling under the market price I can tell you in India.
What is clear is that when the prices are low we are seeing more LNG than when the prices are high. But across the years, we've managed to fill Azir and to make profit during years. And with the partnership that we have with Adani, with the fact that now yes we will be players inside India and we see room for optimization and for profitable growth, we are confident that yes we can combine growth and profitability in India.
Your next question comes from the line of Thomas Adler from Credit Suisse. Please Please ask your
question. Good afternoon. Two questions for me as well. Just going back to the beautiful chart on renewable generation and how you're showing your target IRS of more than 10%. I believe this time last year, you presented it as at least 15%, including farmhouse.
Looks like a bit of a downgrade here. Or are we talking about a wider range across the different And correct And correct me if I'm wrong, A is probably the minimum acceptable to operate your business effectively. And if my numbers are correct, your credit metrics were consistent with the single A rating in 2019, around 44% funds from operation to adjusted net debt. But you are below the 30% threshold in 2020 and probably less than 25% at least on my numbers using Brent at $40 and assuming cash flow after interest of $15,000,000,000 $16,000,000,000 So if we assume you pay your dividend 100% cash and no script and that's $8,000,000,000 of CapEx is $13,000,000,000 Oil stays at $40 and refining margins don't recover as you assume, how do you drive it back to 30% in the next few years if asset sales are also difficult? Thank you very
much. I will leave to Jean Pierre. He can answer the second question, Jean Pierre.
Yes. So credit rating. So as you know Moody's and S and P dramatically changed their price deck. It was in March or April after the drop in oil prices. So at this time, we are able to maintain our rating.
The change was the perspective. So we were before stable. Now we have a negative outlook. I just see I think it was mid September that S and P maintained its outlook for 20212022@50 dollars per barrel for the price deck and $40 by the way for 2020. So at this level, I do not see any reason given the resilience that Patrick mentioned to you to be downgraded.
So having the strong discipline regarding our gearing, having this target to maintain the gearing around 20%, I think will protect our credit rating. And I think that it will be well received by the agencies.
Okay. And for
the time,
you know that means you are right. It was September 2019 when last year I was looking to the presentation because I had always in mind my 10%. So that's been fair to come back to the question of Jan, we have learned in the year. And we realized that if we wanted to be successful to get some projects, we have to accept to target to have a 10%. But at 10% we are successful.
I can tell you. This is what I mentioned during my speech that at 10%, we have been able to get the projects and to put them in our portfolio. So that means that this is the right metrics that we need to consider if we want to develop the business. But the ambition last year maybe it was because we had more Japanese projects in our head than some Spanish projects, I would say, of our areas. But so the metrics I gave you today, I can tell you, but at this level, we are competitive.
In fact, let's be clear, it's always the case. If you go to be competitive in a super Middle East tender where you have everybody is coming, I can tell you at 10% you are not winning by the way. In Abu Dhabi we lost. But we win in Qatar. So it's different.
But the idea is like always in the business is to try to have direct negotiation. And what is done in Spain having access to free pipelines of 1 plus 1 plus 3 gigawatts, direct negotiations. And that means that you have to have smart teams on the ground. You don't operate that from Paris. That means that in fact that's I would say what could limit the ambition is that what I observe is that in renewable electricity, you all know that it's a national approach that you need to have, national regulators.
And to identify the good opportunities, you don't do that with bankers in Paris, which always come to you with the big M and As. But if you want to be smart, you have to have teams. So we have a good team. I can pay tribute to them in Spain. That's clear.
And I think the more if we want to continue to grow, we'll have to put the teams in the various countries where we think there is a development to be done. Clearly, we'll establish something in the U. S. Coming because there is of course big company, but we have plenty of opportunities in the U. S.
As well. So that's something. And last comment for you Thomas is that that's true that the returns are lower than for oil and gas, yes, but the risks are not the same as well. When you sign a PPA which guarantees some revenue during 15 years in oil and gas, I have nobody which is giving me a predictable revenue. So that's chicken and egg.
But again, so I don't I will not come back to you with lowering my 10% next year.
Thank you.
Your next question comes from the line of Irene Himona from Societe Generale. Please ask your question.
Thank you. Good afternoon. Patrick, I'm looking at the priorities 24 of the cash allocation dividend and buyback. You used to communicate in terms of the proportion of cash flow that was right in the previous strategy to return to investors. Today, you told us the dividend is supported at 40 gearing to come down.
During this transformation period and given your view that lack of investment may very well push prices towards €50,000,000 or €60,000,000 But of course, you need to continue to invest in lock carbon. So in this new and this transformation period, what is the right proportion of cash flow that, assuming you delever the balance sheet, would be correct to return to investors?
I'm not sure I even expressed in this presentation a percentage of returns of cash flows. Having said that honestly, this was a difficult part. It was a matter of an introductory comment of coming to you today. You can understand that in these times where we are today, already Total and the Board of Total is quite bold by confirming and repeating that we support the dividend of $40 when at the same time all our competitors in less in Europe have just given up on the dividend. So I think it's already a strong signal to investors that we are ready to maintain a high yield dividend even if as I said the Board is expecting some stock rerating thanks to that policy.
Going beyond and at the same time we do it, but it's true that we are using the balance sheet as we are increasing the gearing. And so that means that the Board is because he's seen the figures, the resilience of the company is ready to support, but at the same time he's thinking that the priority will be and nobody knows how long it will be, I would say, to come back to a normal environment and getting out of this pandemic and this world crisis. So going beyond what we said, you need quite a short term and long term view. I think what we told you today is already a strong message. The other strong message we gave you is that we will increase the $5,000,000,000 by $5,000,000,000 of cash flows in the same $50 environment between 20 this year and 2025.
Obviously, the matter will be to allocate this capital. Again, first and you can make the math at $50 we need additional cash flow to deleverage the company and we'll be under 20% by 2025 more or less. But with that $60 the question will be sensible. This is why we put on the same chart that we can be flexible at higher prices. But that's not so easy to commit on the long term with such metrics.
I prefer I know that some of the peers have done it, but they have first cut the dividend. So for the time being, we are concentrated on maintaining the dividend. And I think it's the best message we can deliver to our shareholders.
Thank you.
Your next question comes from the line of Michele Della Vigna from Goldman Sachs. Please ask your question.
Thank you. Thank you, Patrick, for the clear vision on decarbonization growth and improved profitability. I have two questions, if I may. The first one is, if I can come back to cash return to shareholders, clearly Total stands out for having maintained the dividend through the crisis. But when I look forward at the numbers, the dividend yield effectively is costing you right now about 9% and the cost of debt post tax is less than 2%.
Now I perfectly understand the importance of a strong balance sheet, but given this complete difference between the cost of capital effectively that your investors are charging you versus the cost of debt, wouldn't it make more sense perhaps to focus on buybacks rather than financial de gearing at this juncture? And then a second question, perhaps a little bit niche, but when I think about your refining and chemical business, you are moving away from mega projects, mega plants of refining and petrochemicals towards smaller ones focused on biofuels and biochemicals, which are more local and where the economics really are driven by the local logistics of collecting and delivering waste in an effective way. I was wondering, do you think you have the right capabilities in house for it? And do you think you need to change the way that business is run for this future reality with a bigger share of biofuels and biochemicals? Thank you.
Okay. I take your point. Buyback rather than gearing. I think again, what we experienced to manage an oil and gas company with volatility, I think honestly we are sure that I'm convinced that we see higher cycles, but after the higher cycles we lower cycles. And so if we want to have a steady return policy to our shareholders, it's much better to, I would say, to have the capacity to weather the storms like we are trying to do it today, like we are doing today by the way.
It's a matter of trust. I understand the math that you mentioned and the Board has discussion about it to be honest. And that's true that today it would be nonsense to go for looking for equity from our shareholders. And I prefer Jean Pierre to go on the bond markets and maybe even the green bond markets that you need to tackle. This is the next challenge, but we've all what we have announced, I think it will not be so complex to convince bankers to issue green bonds market today with the total or sustainable bond markets.
It will be next step for us. But that's true, but it's but again, my message to you is that with all what we have announced, what the Board is expecting is a rerating of the stock and so the yield should diminish. That's a good answer. And then buybacks might be an option. And the big debate is a debate and it's wise to return like that will be if you have additional cash buyback is probably better than increasing largely the dividend like it was envisaged in the future.
The second one, I would say, no, I mean, let me be clear, don't make a mistake. First, it's not because we have focused the presentation today on biofuels, but Bernard has abandoned the large AMIRAL project with Saudi Aramco in Saudi Arabia, which is progressing very well. We have all the allocation from the ministry. So it's not evident. Having said that, it's true that Michele you understand that Total will not build a new refinery elsewhere in the world.
I mean it's clear. It's out of Earth. So we still have some petrochemical projects inside Arabia, in Korea, the Korean platform that's the core of it. And then the biorefinery. So a question for Bernard is, do you need more different competencies to for biorefining?
I would say that on bioplastics, certainly my or polymer business people are very accustomed to the size of plants. We have done the first plant in Thailand. But Bernardo, about competence and capabilities on these niche markets, what do you think?
One of the answers is the fact that we are going to slightly change the organization by creating a biofuels dedicated resources that will be a team which will be focused entirely on biorefinery and growing the business in Europe and outside of Europe, which of course requires certainly a different set of skills than conducting larger petrochemical projects. So we can lead the 2 strategies, I would say, both growing large platforms in petchem and at the same time, yes, growing high value added niches like biorefineries. No, but Michele is giving you
a good idea, which is to go and recruit some people in one of the good competitor in biofuels. They are welcome. To strengthen your new business unit. Okay. But again, I think Michele the size of the projects that we have in these biofuels and bioproducts are on the size of the polymer plant.
So I mean we have in the company our chemical gas or Petrochemical or Belgian's part of the company is able to build this type of small plants. Not the French one. They love the large projects. Next question?
Your next question comes from the line of Lucas Hannon from Exane. Please ask your question.
Good afternoon. Thank you. Two questions, if I might, Patrick, regarding the Renewables business. Maybe one of them is a little unfair at this stage, but the first was just on PPAs. Can you give us an idea as to all the projects you're developing, what proportion of the output typically is PPA covered?
And the second is when you talk about 120 terawatt hours of electricity or electrons into the future, Can you give us any idea as to how you'd expect that the end markets for those electrons to split? So how much do you think will go to EV? How much might go to hydrogen? How much retail? How much corporate?
I'm sure you looked at the different value chains and opportunities. But just for us to get some sense of what are the markets that are going to be according value to the different streams? That's it. Thanks, Patrick.
So the first question is easy. The second one is for Philippe. I love the questions of Lucas. No, the first one is clear because according to what I just described to you, the instruction given to our teams is we want to cover the 100% PPA. Having said that, it's clear that we have got one first exception with our entrance into the Seagrin Offshore Wind Projects in Scotland where by the way it was a long discussion I can tell you with SSE.
They wanted to sell us 40% PPA 60% project and we said no. We want at least 70% 30% knowing that we agreed together that the last tranche of production could be we will submit it to the next run for CFD in the U. K. So that's clear that this yesterday again and I have a discussion with our teams which jumped into a seventy-thirty business model and we told them at the Executive Committee level don't go too straight because again what we like in renewables is not only the volume, but it's the predictability of the revenue. So this is what we'll explain tomorrow to our investors.
So if you begin to go too quickly in Merchant, it's I think it will be it might be. Okay. So I think our objective just honestly is to maximize the level of PPAs. We can accept some time to time maybe 30%, but not more as we have done it once. That's sort of metrics.
The second question I'll leave it to Philippe because I know he knows everything about the math.
Well, actually Lucas for this question, I'm not sure if I have the right answer. But what you should bear in mind is that even if of course, we spend a lot of time developing new markets such as EV and green hydrogen for the time being which will remain a very limited part of the worldwide market for electricity and oil production. So if I had to give you a guesstimate, I would say that it will be some let's say 2%, 3% for hydrogen and maybe a bit more for EV. But clearly, the bulk of our production will still into the NAF 30 will go to I would say the overall power market.
So it's yes, I fully support the answer. Despite it's a complex one. It's probably 45 retail, 45 corporate and then EV and hydrogen. Honestly, EVs, Alexey will speak about it. But when we look at the end to what does it represent to a 15,000 or 20,000 charging points in cities, It does not consume a lot to be honest.
So if you want to make money, it's not only through electrons. You have to also the service part of it, but Alexi will come back on that.
Okay. Just coming back on the PPA question. Can I just follow-up on PPA? You mentioned earlier you spent a lot of time looking at your utility breadth and what they how they report, etcetera, etcetera. They also have a tendency to give a fair indication of what the PPA levels and terms are.
Might we expect that you will give better indication to the future of what the PPA terms are so we have a better idea of what revenues are?
We might consider give you all the data sheets of Total, but we are maybe not. We'll see. I will I'll take the point, Lucas, and I will ask my colleagues to make a benchmark on this utility company's disclosure and we'll look at it. What I propose, Ladislas, is that we take a last question or 2 before we'll stop to go to the Zoom because we have another session of Q and A and I'm afraid otherwise we will extend until midnight. So I propose to stop at 4:30 like it was planned.
So maybe let's take 2 questions before to stop and then we'll move on to the Zoom, Philippe. And then we have another session of Q and A. So who's next?
Your next question comes from the line of Bertrand Hodee from Kepler Cheuvreux. Please ask your question.
Yes. So thank you for taking my question. In fact, the question I had was exactly the same as Lucas in terms of PPA and Air France exposure. But maybe I'll try to find another one, which is, in fact, when I look at your 2025 guidance for low carbon contribution, Should I understand that in fact, there is no implicit electricity price or American price built into that assumption and as you are in a way fully secured by the PPA. Is that a correct statement?
Exactly that. It's exactly that because by the way the Seagreen project which is the only merchant for 30% will not produce in 2025. So it's exactly that. You're right you have find the solution. Next question.
But Bertrand, don't worry we'll take all the questions from everybody. It's just a matter of time. Next question?
Your next question comes from the line of Christophe Kupelan from Bank of America. This will be our last question for now.
Could I squeeze in 2 questions, please? The first one, hopefully quick, Patrick, you were referring to countercyclical M and A. And I wondered in that €13,000,000,000 to €16,000,000,000 how big a role net acquisitions play? Already mentioned that the €12,000,000,000 or below €12,000,000,000 next year is largely organic. But just wondered whether you could break down your view of organic spend versus inorganic.
And my second question is a bit more philosophical, which is if you look at the renewable space, you've obviously got your own listed subsidiary in SunPower. You witnessed that free cash flow yields are pretty meaningless in terms of valuation metrics and EBIDTA multiples or price to cash flow multiples trade at a multiple higher compared to where the Total Group listing gets you today. So I wonder how you think around communicating better with different metrics that speak to the renewables growth, which according to your own presentation today will remain free cash flow negative for the foreseeable future. So I wonder how you're thinking around that project problem and whether indeed you think allowing the equity markets to have a clearer view in the way that you have an independent listing for SunPower is
the way forward? Thank you.
So I think on the first question, if I remember the balance between acquisition divestment is around €1,000,000,000 I think maximum. So that means that there is much of the CapEx we are organic and there is a plus and minus which is €1,000,000,000 extra. Of course, it's linked to the possibility to divest, but this is some metrics we have put in this business plan. And if we want to acquire more, we'll have to divest more, I would say. So that's the first point.
On the second one, but we try to communicate on it maybe not enough. I know that maybe it's not good to show that cash flow negative. But all of these renewable companies are cash flow negative by the way. It doesn't matter. So the question is, of course, to I think clearly what we try what we have begun to do today and we'll have to do more of course is if we want to embed in the valuation of Total the valuation of the size of this renewable company, which compare when we speak about 35 gigawatts compared to a lot of these independent renewables company which are much smaller have a huge valuation.
We need to give clarity on what we are doing, that's clear, to attract these multiples also on this part of Total. So that's a challenge. Should we so yes, we intend I would say to go to give step by step clarity on what we do. And I think it was a first step. And you have a slide where we have figures.
But should we go to IPO, all that is very premature. It's not at all what we explained to you. I just explained to you during 1 hour that what we intend to do is build a broad energy company and again being able to have in the same company on one side the oil and gas business, on the other side the Renewables and Power business. And we want to convince that this model because at least again we are the Renewables and Power business is benefiting from the cash flows coming from the oil and gas business. So we have a good engine to make that transition.
We want to really take time to convince the market that this is the right model. If we don't succeed, we'll see. But by the way, as you said, when we are building such a portfolio of renewable business, it will not be difficult if we think it's the best of chance to do so to go in another way. But it's not what we intend to do for the next 5 years.
Okay. Thank you.
So, ladies and gentlemen, for the speakers. And again to all the ones who have questions, don't worry. We'll take all the questions, but after the free next Zoom.
All right. So thank you for this first set of questions. And now we are entering the second part of the afternoon with the focus presentations. And so we'll start with Philippe with a presentation on renewables.
Okay. So good afternoon, Thule. So my challenge to convince you that we are not we are ambitious, but we are not dreamers. But let's start by the dream and by reminding you of the market and the growth that we see on this global solar and wind market. This year, we have seen even with the COVID a 15% growth And this growth is clearly geared to continue with the greening of the planet and the carbon neutrality ambition that have been announced.
The lion's share of this growth will be for solar. We see solar as being the cheapest technology in many countries around the world. But knowing that, of course, they are of the technology of interest and wind offshore in particular, for which we feel that we have unique competitive advantages should represent in turn 30 around 200 gigawatt, so 5% of the overall market. What also is important to be noticed is the fact that around 80% of the growth is concentrated in 4 different areas: China, for sure, which will represent more or less 40% of the growth Europe being number 2 with, of course, the Green Deal ramp the market to high growth. And then in India and U.
S. At approximately the same level, 10% of all the rules. So no surprise if we are focusing our development, thus forgetting of course over continent, South Africa where we are also a unique advantage still to be developed. But clearly, those 4 areas are the one on which we will have greater share of our business. One reminder about also our history in those businesses.
Yes, it was reminded that we invested in SunPower 2011, but was not maybe the greatest investment that we made. But we learned from this investment. And we started our renewed our new ambition to become the responsible energy major. And we created the Gas Renewable and Power branch in 2016. We are very clear that we are more or less starting with a blank sheet.
And so we needed to have first competencies, talents, assets. And there was no hesitation for us that we really need to make some strategic acquisition. And this what remained and you all remember this acquisition of Saft, of Direct Energy, of Quadrant, just to mention the most important. But what we see today and what you see on this chart in 2020 is that the growth and the number of deals is clearly accelerating. And it is accelerating just because, as Patrick mentioned, we have now teams that are competent and competent enough to fuel our growth with ideas with what I would call semi organic growth.
And this is giving us a lot of opportunities that we can exceed on a very low cost of entry. And what is also very clear is that most of this deal in terms of number now is focused around renewables and among the 12 middle of 2010 are around renewables. And where do we stand today after those 4 years? We could say and I'm saying it, I think that our Renewable business is starting, just starting, but is starting to reach a critical side when we compare to the leaders. And what I mean the leaders, clearly the utilities because our old competitors are far from being at this level today.
So we are starting now to have significant assets, significant team. We are positioned on all high growth markets because we are a large company. We have a large ambition and we can afford to be on several of this market. So the solar farm, which brings its size and low cost of producing electricity. What we call the solar distributed generation, I will come back on that because it is not of course most well known part of our business, but it delivers high growth and higher profit because of higher barrier of entry.
Wind onshore, of course, we see a needed complement because we are countries where we have a lot of wind but not so much sun. And wind offshore, which is, of course, the area where we are willing to grow on the basis of our core competencies that as you did it clearly do not have for all of them at least. And batteries, we made the acquisition of Saft, one of the world leader of this technology and we are among the few participants of this segment. And 2020, as of 2020, we will have already 7 gigawatts of asset in operation. So it start to be meaningful.
Of course, it is smaller at the scale of total, but in the world of renewable, I can tell you that it is very significant already. And the dynamic that we have now is not only limited, of course, to those assets in operation because we have also a project under construction and I will show in a minute some of the most significant. We have also identified late stage development project and that we are confident that can be developed among the next one and clearly before 2025. And this is why Patrick was mentioning that our former objective of last year of 2025, be it what in 2025, even if it was easy to memorize, is clearly something that is it is too easy for the team to achieve. And so we had to set a new target and this is why we decided to have this 35 gigawatts.
So it means that we have more or less 10 gigawatts to identify and we're based on what is our track record today, we have little hesitation that we can do it, limiting ourselves of course to only profitable opportunities. So some example of where we are. The first country, of course, to name is our home country, France. And where we acquired Quadrant and Quadrant was and is still now one of the main renewables developer in France. It was raised in 2013, so there's already in this company with more than 300 professional.
We have already 7 years of experience, which we can capitalize in order to fuel our growth. These professional are competent as well in wind and in solar. You can see on this map of France the different dots for wind and different dots of solar. And you see that, yes, we are today balanced between wind in solar, which is understandable for a country such as France. We have 1 gigawatt of operation right now, and we have already secured the pipeline to have 4 gigawatts by 2025.
One example of what I call semi organic growth was the acquisition this year of Global Wind and Power. Global Wind Power is an onshore wind developer. But I can tell you that without the competencies of Quenon, Total Quenon, as it is named, we would have had a lot of difficulty make this acquisition profitable, because we need all the team in order to expedite the development of the project that we have been acquiring. And what we can say today is that if TOTAL in France is clearly the largest energy company, we are already now among the 3 big players integrated in electricity in France. And this of course is giving a lot of stability and a lot of confidence going forward on our ability to remain profitable and to continue growing.
After France and Belgium, Spain is to become our So We will be 1 of the 4th once the deal with EDP will be closed, so hopefully very soon. And on this market, it is also market where we can grow solar generation because it's a market where there are a lot of sun, more than 2,000 hours of generating their hours for solar project in Spain where we have only 1,000, so 50% less in France or in Germany. So it's a really market which is very favorable for low cost solar. And on this market, as we mentioned, we have managed to secure a 5 gigawatt pipeline of solar project, which is not noticeable. It represents more or less the 3rd of the total ambition for 2025 of the country.
And we have managed to secure those 5 gigawatt, I would say, low risk acquisition agreement. We have made agreement with 3 developers. And we it is a scheme when where the developers are pursuing themselves the development of the project and we are buying the project with payment conditions on them reaching precise milestone that you can see on the chart. So it's a very efficient way and very secure way for us to develop this pipeline of projects. And as I was saying, Spain is a country where we can produce low cost solar electricity.
And Patrick reminded you about our strong objective to reduce our carbon footprint in scope 1 and scope 2. So we took advantage of the pipeline of solar farm, but we are in the process of developing in Spain in order to work the talk and mobilizing both farms to produce enough green electricity to supply 100% of the 6 terawatt hour electricity needs of all our industrial site in Europe. And so we do that on the basis of our own solar asset. We are doing that also thanks to our trading ability to balance the risk between the countries' electricity price spreads, because of course, we deliver this electricity to our German colleagues on the basis of the German price of electricity. Of course, we have to balance the production of the solar farm and the consumption of our site, which is more or less 24 hours a day when, of course, our farm are only producing a day.
But we have the ability, the trading ability of doing so. And we have signed what we call a corporate in house PPA, which is the largest corporate PPA, but we have identified today worldwide. So when we say TOTAL is working the talk, yes, it is a reality. One example, of course, of our interest of what we are doing on large project, large solar project such as the one that we have won in Qatar. One of the interest of that was, of course, that it is a large project.
But it was also a test of the competencies and the competitiveness of our team. Because, yes, it was we got that through a tender. And through this tender, we managed without compromising, I can tell you on our profitability objective. We managed to win the tender with the record legalized cost of electricity at $14.5 per megawatt hour. So the category we're very happy with us.
And we were also very happy because, yes, we got the project on a profitable basis. And it was a test for us to make sure that, yes, we are able to have the best design. We are able to have the most competitive supply chain with attractive prices for the panel that of course we are buying in China because we are the most competitive producer in the world. And therefore, it was a good test and it will start in 2021. And as we said, of course, our ambition, especially in the country where the Group has been present for nearly 100 years, what we are willing, of course, to develop is on a negotiated basis other projects that should deliver higher return.
Another country of interest, we mentioned it, India. So yes, we are targeting India as being one of the main market of today and tomorrow for renewable. You see on the chart, we have quite an impressive objective of 175 gigawatt of renewable by 2022. India is clearly key for our LNG gas strategy with high potential for a well to reduce CO2 by coal to gas switching. And this was the main reason to partner with 1 of the largest private Indian company Adani.
But going forward, we realized that Adani was very active in Renewable. We have created Adani Green, which is a listed company, very successful. They were recently ranked by consultants as the world leader in solar development. So we are a very attractive and very dynamic company. And so we managed to sign agreement to create a fifty-fifty joint venture on the basis of more than 2 gigawatt of Solar Farm with a very nice rate of return considering that these projects are completely derisked because we are already in operation and benefiting for 1% of their production over 25 year PPA.
Total arrangement. So another example of what we did in order to extract the competencies that we didn't have internally at the time when we started 20 16. We identified that there was a very competent team which created Eren in 2012. So Paris, not to give you his name. But knowing that, yes, Paris was and has been active in renewables in 2000, where he created a company, which later on become a total sorry, EDF Energy, which was the listed company before EDF decided to buy 100% in 2011.
And then Paris decided to recreate a new company and he partnered with us in 2017. We have 30% of Total REM today. They are developing in areas where it is complementary to what our own Total team are doing. And their ambition and they are in the right track to achieve this ambition is to have 5 gigawatts by 2022, the year where TOTAL has the option to acquire 100% of the share if we decide to do so. Solar DG.
So Solar DG, yes, it's different market. It's peculiar to solar with no disability generation for wind, of course. But having the possibility at an acceptable cost to develop solar producing asset on the roof of different industrial companies is something that is attracting a lot of interest today in many way of the world where it bring already lower cost of electricity rather than buying electricity from the grid. And you see that the growth is there, 15% per year. It is a market that has been taught to us by SunPower because, yes, we learned from the mistake of SunPower, but we learned also of the success of SunPower.
And SunPower is one of the leader, if not the leader of this business in the U. S. So we understand what is needed in order to make money in those business. And yes, we have started, as it was mentioned, to propose to multinational companies that are willing as to reduce their global carbon footprint to have consolidation project. We have 1 SAINT TOTAL and some companies are considering it.
And we are amongst the few companies that can offer them this possibility. And it is also a sector where we have managed to attract the interest of Envision, a Chinese company. I don't know you know this company, but it's a rather well known technical company, very involved in digital and in the renewable. We are on the verge of becoming one of the leader of manufacturing of wind turbine. They have also footprint in batteries.
So very dynamic company. And we have a joint venture with them fifty-fifty in China, which is developing today at accelerated space even if we have to be reasonable. In terms of gigawatts, this will never be as important as the solar farm or the wind project that we are developing. One word of SunPower, because yes, there was recent news for SunPower. Yes, it was mentioned that SunPower was maybe not the best investment that Total has made, but we learned from our mistake.
We identified very quickly at least 16 when we were counting our strength, we identified that SunPower had a high performance product, maybe the highest performance worldwide, but clearly that we have not the lowest cost and mainly for a question of scale. And the scale in manufacturing businesses such as solar cells and solar panel is coming from large markets such as China and a very
well
good know of low cost manufacturing such as Chinese are able to develop. So we only identified that the future of SunPower had on the manufacturing side to go through a partnership with Chinese companies. And this is what was achieved and was announced recently this month, a spin off of Maxeon Solar Technology, which is a manufacturing arm with a partnership with Teselis, which was one of the partners well known to SunPower and one of the leading wafer manufacturing for solar wafers. So, Stivides has taken 29% of the shareholding, injecting $300,000,000 inside Maxeon. And new SunPower, so the remaining SunPower will focus only on distributed generation and storage markets.
Having the freedom to source the best panels, the cheapest panel, if it is of its interest. And of course, we think that it is a good promise for future successes for both companies. And we saw that the stock market has recognized that and we have significant value creation through the spin off. Wind offshore. So wind offshore, as you might have seen us, we were a bit shy on this on this technology, but we knew that we are considering for years that it was a 2 costly technology.
And you have to remember that no later than 2018, there were still some PPAs that were negotiated with public authority on the basis of prices much higher than 100 euros per megawatt hour. And then through the contact that we had through with the contractors that are the same, but the one that we use in oil and gas. We started to understand that there was a cost reduction, a significant reduction, which was happening. And we decided to partner first with Orsted, the world leader, And we did partner with them in order to bid on the tender d'Arcirk in France that we lost, but we learned a lot from having our teams discussing and working shoulder to shoulder with Orsted. When you want to learn, you better partner with best one in the industry.
That's what we did. Yes, we lost the tender because we were unwilling to compromise on the profitability. But we realized that we were able to make a profitable bid for us at less than €50 per market. So we are definitely convinced that yes, this technology has a future. And we looked since then at different opportunity.
And the first one that we can announce as a real first big step is the Seagreen project, where we have acquired majority stake 51%, with a nice partner SSE, which is also one of the leading developer of wind offshore project in the North Sea. And this project is already under construction. This is a project where we have the exception of 30% covered by PPA, but we have some ideas and there will be some auction next year that could allow us to secure a bit more and allow us to derisk even more. On this basis, we are already satisfied with the economics as we see them. And there is opportunity to develop for 100 megawatts beyond that could be also at a nice level of profitability.
But as Patrick mentioned, the new infrastructure in wind offshore is in floating offshore, because the fixed bed projects are limited more or less to 60 meter water depth. And in the North Sea, yes, there is a lot of area to develop those projects. But outside of the North Sea, most of the time, we are very limited in terms of surface. It can only use project that need less than 60 meter water. So the floating is the new concept that is being developed.
It can unlock fantastic development for the technology. Of course, today it's more expensive than the fixed bed. And but there are a strong willingness of many countries to offer PPA in order to meet the profitability requirement that we have and allows to secure the development of the first project on a profitable basis. And we have already 2 significant projects. There will be another one that we'll announce later in October, but we have already 400 megawatt of project in the UK.
And we have announced also partnerships with Macquarie with a portfolio of 2 gigawatt of projects in South Korea. Of course, the challenge being to reduce the cost, we intend EVD to leverage the competencies that we have inside developed in oil and gas, because this will be more or less the same technologies. And we need, of course, to work in order to industrialize the best technology and to lower the cost. And we have started already with a team that is working on this subject with a budget of $20,000,000 per year of budget. And last slide, but Patrick already showed you.
So this is the result of our ambition, the 35 gigawatt that we ambition to have in operation, because we have of course a pipeline go beyond. But 35 megawatts in operation in 2025, double digit return for sure. Very low risk, nearly 100% as we mentioned, secured by PPA with 1st ranked companies or with public authorities. And with this ambition, I think yes, we will be among the 5 global leaders of this industry. Stop there.
All right. Well, thank you very much, Philippe. So if you have questions for Philippe, keep them for now. There will be the Q and A session at the end. But now we have the last Zoom focus on the mobility revolution.
It will be made of 2 parts. But to introduce the Zoom, I hand over to Helle.
Thank you, Ladislas, and good afternoon, everyone. Just as a way of a quick introduction on the revolution that is taking place in the mobility sector, I have one chart from our energy outlook that we presented yesterday. And so here it is. What you can see here is the actual fuel mix of the worldwide transport sector expressed in 1,000,000 barrels equivalent per day in 2018 to the left. And then moving over to the right, the evolution in 2,030,050 in our two scenarios, momentum and rupture.
The colors on the bar chart to the further right, so rupture in 2,050, tells the whole story. It shows how the fuel mix diversifies and how effectively we cannot achieve net 0 for the transport therefore, you have the different fuels. You see that there is still some are left and that would be especially in emerging markets, But there is a strong penetration of biofuels and efuels, sustainable liquid fuels. Synthetic fuels is another name. Penetration also of natural gas, hydrogen and of course electrification, especially of passenger cars, but not only.
In the shorter time, which is the data you didn't have yesterday, so between now and 2,030, the takeaway is that electrification, biofuels and gases will be the best way to decarbonize transport. And this is effectively what you're going to hear about now from first Bernard, I believe, and then Alexis. Thank you.
Thank you, Eze. Good afternoon. So let's now turn to biofuels. What I intend to do in the next 20 minutes with Alexis together is to share with you our ambition on the biofuels market from a producer as well as from a marketer standpoint. So let's first turn to the market.
The world biofuel market, you see it on this chart. What is, of course, obvious is that's a growing market, 2,000,000 barrels a day today, 4% of global transportation fuels market, but we expect this part to double by 2,030. And of course, as I'll explain, depending on the scenario, this part could even further double by 2,050. So why is it growing? It's pretty obvious.
It's because biofuels reduce CO2 emissions by more than 50% compared to their fossil counterparts. And the states have of course understood that this is a readily available solution to decarbonize transportation. So states put in place CO2 reduction targets supported by tax incentives. Practically, it means that given percentage of biofuels has to be incorporated into fossil fuels. And of course, these targets are meant to increase over time.
And when you look at the 10 years ahead of us, in most of the countries, you see this target increasing. And on top of it, you even see more states coming and joining, I would say, the trend by putting in place such a mechanism, the latest one being, for example, Canada, which intend to reduce their carbon intensity by 12% by 2,030 or states in the U. S. Like Oregon, New York or Washington. So in a nutshell, an attractive market from a growth standpoint.
So how do we intend to catch this growth? What is our strategy? Our strategy has been designed along 2 pillars. From a producer standpoint, which is a perspective of refining and chemical, our strategy is going to grow in renewable diesel, the most attractive part of the biofuels market. I will come back on this one.
And as a marketer, of course, which is a perspective of marketing and services, the strategy is to grow the share of biofuels distributed through our retail network. And I leave the floor now to Alexis. Alexis will elaborate on this one.
Thank you, Bernard. Indeed, our ambition in biofuels is to grow our sales very significantly, as you can see. We're looking at growth both in Europe and in the rest of the world. In Europe, we are currently the largest biofuel retailer. Indeed, the grid deal that was just announced will translate to higher incorporation mandates and also HVO will come into the equation, especially with the trucking segment.
HVO has a great interest for whole year's company who want to fix their Scope 1 and Scope 2 emission without having to change their trucks. So the combination of those will allow us to continue developing our biofuel mix in this continent. But we go beyond that. As an example, we are actively promoting E85 that means 85% of ethanol in gasoline in our retail network in France. We doubled the number of station offering E85 between 2018 2019 and we continue expanding our network as the demand is clearly there.
Beyond Europe, we have identified a few markets where we want to grow. One of these is Brazil, which is the 2nd largest biofuel market in the world with 1 third of the sales there biofuels already. In 2019, we acquired a network of 300 stations. This was the first step as our target is to have more than 1,000 stations in Brazil by 2025. We are also anticipating developments in the Aviation business, but Bernard will elaborate on that in a few moments.
So you see biofuel will represent between 10% 15% of our sales in 2,030. This is what it takes to meet the 2 key objectives of the group of reducing the carbon intensity of our sales and increasing the absolute Scope 3 emissions by 2,030. Over to you, Bernard.
Thank you, Alexis. Now let's turn to Renewable Diesel. I just said that this is what we want to focus on as a producer in refining and chemical and let's try to see why. When you look at the biofuels market, typically you have to split this market into 3 segments, which each have very different characteristics. The very first one at the bottom is a pretty well known segment, the biogasoline.
Is the largest one. There you incorporate bioethanol made out of sugar. The second segment is a biodiesel segment, where you incorporate bio components made out of vegetable oils, typically or Hapsid Oil, Corn, Soybean. These bio components are called Ester, FAME, but they have a drawback. They contain oxygen and that limits from a technical standpoint their incorporation rate into the engine.
There is what you call a blending cap or blending wall above a certain volume typically 7%, you incur your risk to damage the engine. So of course, you understand that that puts a cap on the growth potential. These 2 first segments have many points in common. They have low entry barriers. They are not very capital intensive.
The technology is pretty well known. As a consequence, they are largely oversupplied. And as a consequence, margins are poor. So this is of course not the kind of market you like to compete in when you are a producer. The first segment at the top is the renewable diesel segment.
It's also a bio component for the diesel market. It's also produced from vegetable oil. But this time, we have a different technology called hydrogenation. And the beauty of this process is that you can read of the oxygen into your bio component. And all of a sudden, you understand that there is no incorporation limit anymore.
This is what we call a drop in solution and in theory you can even replace substitute 100% of your fossil fuels by this renewable diesel. This is a high quality grade, but entry barriers are higher than for the 2 other segments. It's more capital intensive. It's growing from that standpoint. It's an attractive market, a high margin market and typically the kind of market you want to play in.
The last comment, as Alexis mentioned, renewable diesel can be used for airlines. That's not the case of the 2 other segments. And as you know, air transportation today faces a huge challenge in terms of CO2 emission reduction, which means that there is an additional growth potential for renewable diesel. And this is what I would like to show you now in more detail. So Air Transport, the equation is very simple.
You see there. This industry emitted last year around 1,000,000,000 tonne of CO2. Airlines have made the commitment to reduce their CO2 emissions by 50% by 2,050. But at the same time, they know that the passenger traffic will double during this period of time. So it looks like a tricky equation to solve.
So how do we address this challenge? First, of course, airlines try to reduce the weight of their airplanes by putting more lightweight material. They also try to optimize their flight plans to reduce the fuel consumptions. But the first lever, the main lever is of course around the fuel itself. Today, liquid fuels are hard to substitute for long haul flights.
We know it. And thanks to its premium qualities, premium grade, the renewable diesel is the only available solution offered today to airlines to reduce their CO2 emissions. So you understand this is a brand new market and the states have understood of course it. And you see now countries like Norway, France, the Netherlands, Sweden, tomorrow Europe and probably the U. S.
Putting in place incorporation targets exactly as they did for the road transportation. So we have in front of us a brand new nascent market, which will also fuel the growth of biofuels and notably renewable diesel. So we have looked at the demand side. It's pretty attractive. Let's now have a look at the supply side.
You have additional capacities to meet the demand. And today, the market is short of capacities and we think it will stay that way for the years to come. Why is that? It's very simple. When you think about where the new capacities might come from, of course, you think about retrofitting existing refineries, exactly what we did with Lamed or what we are about to do with Grand Prix close to Paris.
The typical lead time is 3 to 4 years between the moment where you make the announcement and the moment where you have your first production. On top of it, we don't see many new greenfield projects. The last comment, there are also not so many projects in Europe. And it's hard to some extent because we consider that Europe is at the forefront in terms of energy transition and carbon neutrality.
So
there is an opportunity clearly for European refiners and of course for Total. So in a nutshell, if I had to summarize, the market will stay tight. And of course, that will support margins for the years to come. So what is our strategy in this field to catch this potential, this opportunity? So we have designed a strategy build along 3 pillars.
I'm going to detail each of them. The first one, of course, is to convert existing assets. That's particularly true for Europe, where we need to adapt our refining system. We have done it with Lamed, you know it. It has been our first step.
We are now doing it with Grand Prix. I will come back to it in more details in a few minutes. So that's the first pillar we execute. The second one of course is to increase the share of co processing in our existing refinery system. So we take the existing assets with some marginal CapEx, mainly some logistic CapEx to segregate from crude, we produce renewable diesel.
It's done at marginal cost because typically the effects are very low. And you see there that we have plans to restart by 12,000 tons in Europe in the next 2 to 3 years, and we're also looking at opportunities in the U. S. And the last pillar, of course, is to develop new units, additional production units on existing platforms where we can leverage existing synergies, typically logistics synergies or if you have an excess of hydrogen, typically you can also leverage this excess hydrogen to produce renewable diesel. And that's typically per project we're evaluating today in Korea.
It's 500,000 ton of capacity project on our platform in Taizen. So what you see clearly is that by leveraging our existing refinery setup, we're able to benefit from very low CapEx in the range of $500 to $7.50 per ton as you see. And this has to be compared with greenfield projects, which range more the area of $1,000 plus per tonne. So it's very attractive from the CapEx intensity standpoint. And also and I will come back on this because it's also critical.
We design our investments in a way to be able to process all type of feedstock as flexibility is key in this market. So as Patrick explained, we are targeting more than 2,000,000 tons of renewable diesel by 2025 and moving this volume doubling against this volume and coming close to 5,000,000 tons by 2,030. With a cash flow generation in the current environment of $3.50 per tonne. So I was mentioning feedstocks, which is a critical point and I would like to tell you why. On this chart, you have the market split of the main feedstocks used for renewable diesel.
On the left hand side, the largest pool, very well known. It's all these are all types of vegetable oils. It's a resource which is largely available and which will remain largely available for the future even after the pan ban. In the middle, you have a growing category called waste and residues, so typically animal fat or used cooking oil. There is a growing demand for this category with some tax incentives because this category contribute to the circular economy and it's supported by the government and the states.
The challenge there of course is to increase the collection rate to meet the demand, increasing demand. 25,000,000 tonnes today, which is already significant And we expect this category to grow in the decade to come. The last category on the right hand side called advanced, it's the next generation, but not really available today. We see it more playing a role by 2,030. So as you see, there are plenty of different feedstocks to play with.
And of course, it depends on the price because the prices are pretty volatile depending on the once again on the feedstocks. But to play with legislation, as I just said, for example, palm oil is banned in France, animal fat is banned in Germany. So depending on the legislation, you have a different mix to play with. And of course, you have to play with the tax mechanism. I was mentioning waste and residues which in some cases benefit from tax incentives.
So you understand why it's so critical to be able to play with all the set, all the panel, all these feedstocks. And that's why it's so critical to be able to design your units to be able to process all type of feedstock. And this is exactly what we have done. You see it in La Mer and tomorrow in Grand Prix. In La Mer so far, we have been able to process successfully 8 different types of feedstocks.
We have designed our units to be able to pretreat these feedstocks to also be able to segregate between the different types of oil and feedstocks or finished goods. And of course, we leverage the expertise of a trading to be able once again to get access to the best sources of certified feedstocks. Practically what have we done and what do we intend to do? The very first move we made, you know it was with Lammed. It started up last year, mid of 2019.
It has been our first move. We have applied there our business model, which is once again to retrofit existing assets to benefit from low CapEx. And you see here that LaMed, the CapEx intensity of LaMed was around $600 per ton, sorry, to be compared once again with the metrics of the Greenfield project, which is more in the region of 1,000 tons plus per ton. It has been designed, I've already said it to be able to process all type of feedstocks. And today, we are in the ramp up phase, 300,000 tonnes of production.
This is what we expect to do by 2020, by the end of the year, delivering positive cash flow from operations above $3.50 per tonne. So I would say 1st step, a successful one. And of course, we are now leveraging this experience to move to our next project, which is Nompuy close to Paris. That will be our very first 0 crude or 0 oil platform entirely dedicated to bio based fuels and polymers as well as to plastic recycling. This represents investment of more than $500,000,000 ex, good internal rate of return.
You see there more than 15%. And we have there, if I just described briefly the different projects, the biorefinery, which will process 400,000 tonnes of feedstocks, 70% being waste in residue with half of it being secured. This unit will be completely, largely dedicated to the production of biojets, sustainable airline fuels that will be the main outlet of this biorefinery and with some renewable diesel of course starting up in 2024. We have also a brand new bioplastic unit producing PLA. PLA is a biopolymer made out of sugar.
We have, as you know, very successful partnership with Corbjorn. We invested 2 years ago in a plant in Thailand, 100,000 tons. This plant has been ramping up very well and we have taken the decision to double the capacity of this joint venture and to locate this new unit in Grand Prix. We've again started phase by 2024. The 3rd project is a plastic recycling unit.
It's a chemical recycling unit. It's a first in France. It's going to be a joint venture as well with a company called Plastic Energy. And we are targeting a startup in 2023. And we have last but not least, a solar farm, 15 megawatt of capacity, which will contribute, as Philippe explained, to the generation of green electricity for the European asset of the group.
So as a conclusion, you will remember that our strategy is built on 2 pillars: a leading producer, leading marketer. Producer, we want to grow our production in renewable diesel becoming a leader in this field. And in the field of biofuels, as Alexis explained, we want to grow our share of biofuels within our liquid fuels by 2,030 to a level which will represent 10% to 15% of our sales and that will and of course, which will also contribute to reducing the carbon intensity of our sales. Thank you. I leave the floor to Alexis now.
Thank you, Bernard. For the next 20 minutes, together with Philippe, I will present our 3rd and last focus on how Total is embracing the electric mobility revolution. I will start by stating the obvious. Mobility is about to change drastically. It has already started, albeit slowly, but the change will be major in the coming decades due to the exponential penetration of the electric vehicle.
In the total energy outlook that was presented to you yesterday, in the Momentum 1, the share of electric vehicles will reach close to 60% of the fleet by 2,050. In the rupture scenario, the increase is even faster as the percentage will be close to 75 percent of the world fleet in 2015. In Western Europe, and we are presenting here on the right the 5 markets where Total has a strong footprint, the number of vehicles on the road will be more or less stable at around 100,000,000 vehicles. But the switch to electric mobility will be faster than the worldwide average. You can see that the share of electric vehicle will still be modest in 5 years in 2025 at less than 5%, but we grow significantly to reach almost 20% in 2,030 and close to 95% by 2,050, thanks to the impulse given by the Green deal.
This acceleration is no science fiction and is being fueled by 3 main drivers. 1st and foremost, regulations. Regulations are the main market driver and they take place at various levels in economic zones, in countries and in cities. There are many examples beyond the long term political objectives of carbon neutrality announced by Europe and China recently. There is, for example, the emission target of 95 grams of CO2 per kilometer that has been set on vehicles sold in the Europe since this year.
There is the banning of the internal combustion engine by many countries in the next 1 or 2 decades. There is the introduction of 0 or ultra low emission zone in city centers as London and Amsterdam have already done. Car manufacturers have reacted to these regulations and have started to invest massively in EV. They have clearly chosen electricity as the next technology and this is the 2nd major market driver. Finally, performance of battery is rapidly increasing while costs are decreasing.
This is the 3rd market driver as it allows us to foresee 1 cheaper cars, the cost of the battery currently represents still 40% of the cost of the car and 2, extended autonomy. These are the 2 pain points preventing customers from switching massively to EV right now. The mobility world is changing. As Total, we have integrated that in our strategy. In mobility and EV charging, and I will come back to that in a few moments, our strategy will be to address the most mature and attractive markets in terms of size and to leverage our position.
We are quite excited as we really do believe this represents a fantastic business opportunities for Total. I just mentioned how batteries are a key driver to this market and a key element of the value chain. And Philippe will now explain how Topaz is addressing this marketing opportunity by developing key position in battery manufacturing. Over to you, Philippe.
Thank you, Alexis. So first slide, you have to remember that when we invested in SAFT, The strategy was in fact to develop what we call energy, stationary services, battery needs to compensate for renewable production, intermittency, peak shifting or frequency regulation. But to be profitable and we learned once again from our mistake and some of our experience, we were willing to get low cost manufacturing basis. And of course, this was implying
to go
to China and also to take interest in Mobility because the lithium ion battery needed for ESS are more or less the same chemical family as the one for mobility. And so after having discussed with different partners, in China we decided to partner with Tianang, headquarters near Shanghai. They are the number one worldwide of the lead battery for vehicle. This business is not part of the venture. But they were eager to develop a lithium ion.
And so they've already built a Gigafactory, a large factory, but which was not completely filled. And we decided to partner with them. We created the joint venture 6040 in 20 19. Sert is contributing clearly mainly to lithium ion chemistry and Naurau. And Tianang is contributing with first its Gigafactory existing one And it's also contributing with its sales channels in China because on this basis, we can develop, produce cheaply products for our ESS business outside of China.
And we can also develop business for mobility in China where we are leveraging also their sales network. And today, we are already the leader in China with close to 30% market share of the e bike segment, which is one of the highest growth segments in e mobility. And when I say e bikes, it's not only bicycles, but also motorcycles. So this is our investment in China. And second slide, thank you, Alexey.
We are not limiting our ambition to China. We had also an opportunity when Europe decided really to adopt a very clear policy to promote to impose development electric cars. We had the opportunity to discuss the possibility of building manufacturing capability for battery for electric vehicles in Europe. The risk for Europe was, of course, to import batteries from Ciala one day and in the future to import the vehicles. And so we had a discussion with the authorities with a very strong partner PSA, one of the leading manufacturer in Europe, maybe the most profitable now.
And we decided to partner with PSA fifty-fifty today to develop this automotive sales company. We created the company early August. The objective around €30,000,000 is to get up to 1 equivalent of €1,000,000 EV. So that means more or less 10% of the European market. We'll go step by step.
Clearly, the first step is R and D step, which has already started since August. And the for total the investment is limited to €500,000,000 equity injection knowing that we have significant subsidies that will that have already been granted by France and Germany on this project. Maxi?
Thank you, Philippe. I'm going to share with you now how we are addressing the EV charging market. EV will completely reshuffle the distribution of energy to motorists. Today, customers come to our service station to refuel, and they usually do so while on the move. With EV, it is a different ballgame.
The car will charge when it is not in use, when it is parked, which is most of the time. So it will bring multiple charging opportunities compared to today. In Europe, market research foresee that approximately 40% of charging will occur at home, 40% at the workplace, 15% in the public domain and about 5% at service stations. This means that we have to reinvent the way we interact with our customers. We have to switch to a multichannel distribution model.
We won't wait for customers to come to our sites anymore and we need to provide them with charging services wherever they choose. To address this new paradigm, we will focus on our strengths. And 2 of those are our experience in offering services and our ability to manage infrastructure. This is why our primary focus will be on the B2B and the B2G segments. We will leverage our relationship with our professional B2B customers, in particular for charging at work and while they are on the move at our service stations.
And in a moment, I will show you a few examples of our ability to install and operate charging points in the public domain. The public domain is what we call B2C. We will obviously reach B2C through public points and service station, but B2C and phone charging is not our foremost priority unless in instances where Total can also be the electricity provider as increased consumption there may make it worthwhile. There are various business models and position along the value chain. Because we are focusing on B2B and B2G and retail, the first dealing the first customers we are dealing with are cities and companies.
The vast majority will want a single point of contact throughout the chain providing the installation of the hardware, the operation and the maintenance and obviously the charging services with energy sales and associated services. Our business model to seize this new business opportunity is to be what we call a charge point operator capturing the bulk of the value chain. We sell the energy and the charging services and we develop direct customer relationships. But for convenience, our customers will want to have the capacity to access a larger number of charge point beyond the ones operated by Total. So our Total Mobility solutions will also allow charging at 3rd party charge points.
And in this way, we can retain the relationship with our customers end to end. Lastly, in certain toned markets, Total can integrate upstream by providing the electricity as well as the operation of the charging point, allowing us to capture more of the value. Our strategy is first to address a market where we are strong and where the infrastructure needs to grow rapidly that is Western Europe. In our main European markets, the number of charge point will grow significantly by 2025. We estimate that 3,000,000 charging points will be installed in Europe in the next 5 years, but 40% of them or 1,200,000 will be installed by corporate customers and by cities who want to equip the public domain.
In this context, our strategy is to prioritize urban markets first by taking position through public concession in large cities, then by installing fast chargers in over 200 major urban hubs targeting high managed urban professional. And obviously, the perfect complement is then to connect those urban areas. This will be done by installing super fast chargers of 300 of our service station along the main road corridors over Europe. In line with the objective of reducing emissions, cities are rapidly installing EV charging infrastructure. Total intends to partner with major cities through concessions to foster e mobilities.
We already have 2 iconic examples. First, earlier this year, we were awarded the concession of the Metropol region of Amsterdam. We already operate 5,000 charge points there and could go up to 20,000 by 2024. And since Amsterdam is a dense urban area with limited individual parking, we foresee a high usage rate, which explain why such business can bring a favorable equity return above 15%. 2nd, we are not relying only on organic growth.
M and A is part of our growth plan. London is a dynamic market in term of EV adoption as it has set the ambition to become a 0 carbon city in 2,050. And I'm very happy to announce that in line with our strategy, last week, we signed the acquisition of Blue Point London, leader of EV charging in London with around 50% market share and long term contract with 23 borrowers. There are already 1600 operated charge points, and we are planning up to 4,000 by 2025. Amsterdam and London are great examples.
Altogether, today we have already 12,000 charge points in operation in various cities in Europe. And with the coming growth that I have just outlined, we are well on track to reach our target of 50,000 operated charge points in the B2gs 2 gs segment by 2025. In urban areas, we also have to cater for the fast charging needs of certain professional who are doing high mileage on a daily basis, in particular, taxis, ride hailing cars, but also last mile delivery vehicles. These professionals will need dedicated high speed EV charging stations. This gives a great opportunity for creating for the creation of charging hubs offering multiple charging points.
You can see a picture on the left of our first one that is already up and running. Charging hubs are now being deployed in urban nodes to cover major cities in Western Europe, and we target to have more than 200 sites in the next 5 years. For long distance traveling on the right, the issue of autonomy will remain a point of intention for some time. The solution here lies with high power charging or what we call superchargers up to 3 50 kilowatts. They have the capacity to deliver 100 kilometers of autonomy in 6 minutes.
Here TOTAL has a very valuable asset with our existing retail network of more than 6 1500 stations across Europe to choose from for providing this service. Our goal is to deploy 300 high power charging sites along highways by 2022. This means one every 150 kilometers on main road corridors. By developing this network, we'll offer our EV customers the possibility to travel with the customer experience close to the one that we are experiencing today. And obviously, as convenience services also.
So whether on highways or on urban charging hubs, our target is to install 1500 fast and superfast chargers in 500 locations by 2025. This represents a commitment of around $200,000,000 and a projected IRR of 10%. The last segment I would like to present is the B2B segment. We have a fantastic asset with our existing 1,000,000 client base and the full potential to accompany them in their transition to cleaner mobility. In Europe, we have 3,000,000 Total Fleet Carb holders, already mobility clients of Total, who will be interested for sure in our EV charging offer.
This is a solid base to leverage, keeping in mind that B2B fleet conversion to EV is supported by legal constraints, by the net zero ambition of our client themselves and by the fact that certain zones will not be accessible with conventional fuels. So we anticipate the B2B segment will move fast and the potential in Europe is over 1,000,000 charge points for B2B by 2025. This move is already happening. And on the slide, we can see a few examples of our success. Enelidis, who is a major grid operator in France, is a very good reference.
They have actually one of the largest EV fleets, and we have installed 12 50 charging points over 155 of their sites for their fleets. Our B2B customers may want to use the charging services that we operate on their premises, not only for their fleet, but also for their clients, their employees, their visitors. This is what we call the host segment. It is what we have done for Peugeot, where we have installed 175 charge points at 14 sites in 6 countries. It is the same principle for shopping center who would want to provide charging services at their parking spaces.
Last, an example of how we leverage the long term relationship with our customers is what we have done, thanks to our lubricant business. Within the last year, we have worked with more than 500 OEM dealers and garages across Europe to equip them with over 2,500 charge points. So all in all, putting all this together, our target to operate 100 charge points in the B2B segment by 2025 is quite realistic. The next 5 years will be key to position Total well. This position is important because after this taking into account the market development dynamics that I highlighted at the beginning, the pace will accelerate drastically.
Building on our strength and our competitive advantage, we will reach a 10% market share in the B2G and B2B segments in Western Europe. Total is committing the necessary resources to make this plan happen and will allocate $300,000,000 of CapEx and $300,000,000 of assets under leasing over the next 5 years. And we're not starting from 0. We already have a head start with the 18,000 charge point that we already operate and a significant number in our portfolio. This positions us very well to reach our target of operating 150,000 charge points by 2025, which will deliver 500 gigawatt hour.
This business will bring an additional $50,000,000 of cash flow from operation to marketing and services by 2025 and around $100,000,000 by 2,030, thanks to a forecasted increase in usage rate. We will therefore be a major e mobility player in Europe. I've spoken about Europe because that is where Total and EV growth are strong. However, EV charging is advancing as pace in China. Total has a presence in this country with strong position in 3 regions.
And as you can see with this picture of our first charging hub in Wuhan in Hubei in partnership with Didi, we are also on the move there. So clearly, more to come from Total on EV Charge for sure. Thank you for your attention.
And I
think we can move to the Q and A.
Thank you, Alexis, for this presentation about the e mobility and to Bernard for the biofuels and free renewable. So I think we are back for a session of 45 minutes until 6:30 p. M. So there were some questions left for the first session. So of course, we should give priority to you and then we can take more questions.
So the floor is yours.
Your first question comes from the line of Christian Mahler from JPMorgan. Please ask your question.
Patrick and team, thank you for the Michelin Star dinner as I appreciate the Delica Balan Sustaining Oil as your core business and then building key energy at the same time. I didn't submit a question in the last round. If I may, I have 3. My first question relates to the
flex you have with capital allocation
in oil versus electrons in what could be an upward trend for oil prices. How tempted would you be to invest in more short cycle projects in a higher oil price environment at the cost of delaying your sort of elevated power target in 2025 of 35 gigawatts. And I know it's a tough trade off, but how would you prioritize that in terms of the capital frame? And then linked to that question, given you're being a bit more optimistic about the macro environment of the medium term, but in a year of excess free cash flow where debt has deleveraged faster than 20%, I just want to be clear, would you consider increasing your dividend payout? And how should we think about buyback versus dividend priority?
Thirdly and final question is, I think it's very bold to provide explicit CFFO targets for Renewables business in 2025. And thank you for more granularity than we had expected. I know the debate we've had around growth in renewables by all companies where this will be ever be valued appropriately
by the equity market. Would you
consider doing what the 2 of these companies did and carve out for IPO, the effective utility part of that business as a separate entity? I guess that would be a great dessert to finish off this great new menu.
The only question I didn't catch because sorry, Christian, I catch perfectly the last two questions. But the first one because the sound here was not good. I'm not sure if I've understood. Keeshong, your question was arbitration between CapEx to electrons and alloy gas and oil and gas if I understand. The first question, can you repeat?
Yes, exactly. The tension yes. So essentially how you think about allocating more CapEx towards short cycle and a high oil price environment, does that come at a cost of delaying your new power targets? What's the trade off in all else equal environment in capital
I think the question is answer for me is clear. The short cycle CapEx, we allocate them depending on the payback on the oil price. So if we are honestly at $50 or $60 back, we are back at $50 $60 and we can have we have more cash if we can decide to accelerate this short cycle. It will not be done on the detrimental part of the low carbon electricity because again in all the scenarios we have, we have decided that we'll put the $2,000,000,000 we need for the next few years and then we'll increase it progressively. Alcivat as an additional opportunity to deliver more cash from our oil and gas and maybe feeding then more our low carbon electricity business with more opportunities if we can capture some.
So I don't see with the CapEx allocation we propose, there is no antagonization. But yes, it's not I mean, let me be clear, oil is still at the core of a company like gas and energy. So don't make a mistake. We want to add a third part and to build it with a clear strategy. But it's not a matter of arbitrating to more electrons against oil.
And again, short term CapEx can be activated If we see a rebound, which is perfectly possible in the oil price, then it's a matter of mobilizing the rig. You have noticed that this year sorry for that, we have decided to remobilize the rig in Angola because in fact we saw a possibility to quickly get some more there were some wells with quite high returns which could be done immediately. There is a debate for another rig in Angola. We'll see and that's true, but we have to monitor that according also to the environment that we face today. The second one, I think we I will tell you.
We know that our investors prefer dividend than buybacks when I ask a question. And our Board is clearly more in favor of dividend by buybacks. Having said that, we also have the remark of Michele previously during the discussion, which is that when you and it's a matter for me of at which of level of the shares. That's why I don't want to be a bit. It's clear that Board is waiting to see the stock rerating.
And if we email at 9% of returns, there will be a question mark. It would be strange for us to increase the dividend and not to allocate additional cash flow to buybacks which should be the priority. So I think for me there is the answer is we prefer dividend and our investors prefer dividend when we ask the question, but it's linked to the riveting of the shares. There is a 3 angle there, the share price, the dividend and the buybacks. And again, if we remain at very high yield of 8%, 9%, there is a certain logic to allocate that, to allocate additional cash flow in priority to buybacks.
So let's wait and see if when we propose this strategy to which is more aggressive and to give clarity to be the broad energy company, we convince investors. And then the day we'll have these cash flows we will have to make better arbitration. So I give you some type of I give you some insights of the discussions around the Board, but I have no problem to be transparent on that. The last question, I think question, it's again I answered I think to one of your colleagues just before, it's a matter of size. Clearly, our objective today is that we are convinced that we can find investors to put our money and to believe and to support this global energy company.
Because again, and I come back on it, we have some financial strength and some financial potential capacities to invest in this renewables and electricity business. But many of our competitors in the utilities do not have in fact. And in fact, I see the reactions. The more we are expressing the targets and we are acquiring assets and we move forward, the more we are a little afraid by looking to see these big oil and gas companies that their cash flows enter into that market. So then it's a matter again links to shares.
Can we convince investors? Can we re rate the total shares including and we will accept this business model or not. If not, but we need time to do that. We need, I say, as I said, 5 years. If not, in the meantime, we will have built, I would say, a sort of beautiful renewable portfolio.
And the alternative could be to it's an alternative. It's not a priority today. The priority is to establish it because I think for the long term and if we want really if we are all serious about bringing climate change solutions, our companies having the source of cash flows, commodity and gas and redirecting it is the best way to accelerate the solutions for the climate change challenge.
Your next question comes from the line of Alastair Syme from Citi. Please ask your question.
Hi. Thank you all for the presentation. Two questions. Can you do everything you think you need
to do in
refining through adaption? I was struck in Hallo's presentation yesterday that suggested under the European Green Deal that oil demand might be as little as 1,000,000 to 2,000,000 barrels a day by 2,050. And then secondly, I wonder if you could just touch on the cost estimations. You think for floating wind versus fixed space, what's the level of difference? And what are you building in, in terms of cost reductions into your project economics in Korea and the UK?
Thank you.
Philippe will take the second question. On the first one, just to tell you, I mean, first, we speak about 2,050, yes? We are still in 2020. And that means that's why I think and Total clearly has a clear strategy of progressively adapting our refining system in Europe. We have begun I think 10 years ago.
We shut down the Dunkirk refinery, then we went to Lame to convert it. Now we do it with Grand Prix. I think it's a question of facing the reality and doing progressively, trying to benefit from this biofuels market, which is supported by European government policies. And frankly, it's better to be among the first to do it rather than doing it than the last. And when you look to the remaining refineries, which are in the portfolio of Bernal today, I think I would have been very happy to have the 6 remaining refineries in Anwerp, Leuina, Zeeland, Normandy and Dons and Faison.
But we don't are left in Europe. They are not I would have preferred to have that portfolio when I was at the head of Refining and Chemicals rather than the one with many refineries and some unprofitable. So it's a question again of adapting progressively, but there is no doubt that we will have to do it. Having said that, when you have a very profitable one like the Antoine or Loina or normally there is no reason why not maintain this activity. Bernard, you want to complement on that?
No, no. It's clear what you're saying.
It's okay. Philippe?
Yes. Today the cost of floating of course is just only based on the pilot that we are in fact designing right now. But at the time when we speak, the cost in CapEx let's say per watt is around 6. So it's double the price or the cost of the fixed bed. Knowing that of course what we anticipate is that there will be higher stronger wind for the because more or less the further you are from the coast will be more regular and the stronger the wind are.
So you should have more production. And of course, it's just a new technology in the same infancy. We should be able first to have higher size for the wind turbine even beyond what we see today. Currently for instance, SeaRain is based on 10 megawatts we can imagine for floating but we will go maybe twice as much. But of course all this technology has to be developed.
In 5 years we went in a fixed bed from €150 per megawatt hour to €250. So we have the same kind of challenge to face today in the floating.
But I think again it's a matter of supply chain and mobilizing the people with this emerging technology, which is the best for us. A country like Korea is offering a beautiful platform because we have a lot of yards there, a lot of, by the way, suppliers which are working for the E and P, which knows a lot about floating platforms and a motivating government. They have a clear policy. And so I'm convinced that these type of countries will help to emerge. It's a matter of at the beginning to give the right incentives to accept to pay, I would say, dollars 200 per megawatt hour.
So this will emerge. And then there will be an acceleration of this technology. So I think it's the same process than the others, but there is a big potential. And frankly, on this one, the oil and gas company are perfectly positioned to be at the forefront. It's why, by the way, Macquarie, which was which had these already these rights to make wind measurements in Korea as selected total rather than a utility because they saw a clear interest to partner with us on this project.
So yes, it's still costly, it's clear, but a matter now of engaging industrial projects and not just pilots. Okay. Next question?
Your next question comes from the line of Biraj Borkhataria from RBC. Please ask your question.
Hi, thanks for taking my question and thanks for the presentation. I've got a couple of questions again on low carbon, but
I just want to get
a sense of the level of competition in that business. So could you over the last couple of years, could you say what proportion of solar and wind tenders that you entered that you didn't win? I just wanted to get some comfort around that. And then the second question is on your low carbon cash flow target of €1,500,000,000 in 2025. What is that number in 2020?
I vaguely remember you putting out a target of $1,000,000,000 in 2020 a few years ago, but I don't know if that's apples to apples. So a clarification on that would be helpful. Thank you.
No, it's not the same at all. It was by the way by the end mainly. When we say that it was mainly based on the SunPower and expectations which clearly have been disappointing. So today it's not the figure we gave you today is the sum of many assets. So it's much more reliable but depending on 1 or 2 performance.
So we were maybe too optimistic by that time. So I think in the slide, which I show you, you have the figure maybe not. I will look to give it to you. So today we are more in the field of $200,000,000 to be clear. So it's emerging because all that is just being built.
Then the first question, how many tenders did you not win? I think we lost mainly in the Middle East, in Saudi Arabia, in Abu Dhabi, I think. So big 2 tenders, which we are competing. And frankly, these ones are they were very aggressive. And in the wind offshore on the KF.
But again, I think these tenders like it's like in A and P. You don't make money generally when you until you win a tender, you make money because you have a better idea and you find direct negotiation. And I think one of the interest of there are many, many players around the world, small players, which are in fact developing some pipelines and which we have do not have the financial capacity to build. And this is what we have done in Spain, the business model which was referred to you by Philippe. They have the local knowledge, they have the capacity to have access to connections and land, but they have no financial capacity.
So when we find them, we come and they see immediately the advantage of partnering or selling their pipeline. So it's a sort of I would say it's not for me M and A, but it's more an inorganic business development. We have today with this type of approach and there we leverage our financial capacities and capacity to find PPA, corporate PPA, which we will offer to them, so to accelerate their development. But it's not very expensive. And by the way, the way we remunerate them is according to de risking the projects step after step.
Okay. And to be honest as well, if your tender is too aggressive, we are not there just to make megawatts. It's not a question of gigawatts plus gigawatts. It's a question of at the end to be again, I have my metrics, which we approve projects. If we reach 10% of equity IRR after farm down or not, we don't approve.
And so that's clear that in one of the tender, we teams came back to us and we said, no, it's too low. So that's life. It's a question. And discussion on the Dunkirk Offshore Wind Round in France. We have with Orsted and both of us were perfectly in agreement, but it was and I can tell you when my friend of wholesale told me it's too low I stopped immediately.
Okay.
Thank you. Your next question comes
from One of the difference in this tender just to is not really the cost of CapEx etcetera It's the assumption that you will take on the tail, which means you have to take if you take an assumption to be reasonable, you take the present price, you take €40 per megawatt. And after 15 or 20 years, you have 1,000,000,000 or €60, if you believe that the power price will go up to €70 or €80 per megawatt, of course, it's changed a bit. So this type of gains or game for me is a casino. I prefer not to put the money after time in this type of game. I prefer to frankly.
So this is exactly the type of game that some players are playing today, which is just to take very aggressive assumptions on the long term. And that maybe because we are we do not know enough this segment or because on the contrary we believe that the more you will have renewables in the systems the more it could imply some lowering the cost of electricity and energy we are not ready to play that. Okay, next question?
Your next question comes from the line of Henry Tarr from Berenberg. Please ask your question.
Hi, and thanks for taking my question. Two, please. 1 on the Renewable Diesel business. So I think you have a target of 70 percent per share of waste and residues in terms of feedstock. And you said you've acquired, I think, or secured half of that now.
What type of feedstock have you secured so far? Would you see the need to vertically integrate into the feedstock market? I guess we've seen a lot of companies announcing new renewable diesel capacity, but it seems as though the pool of the weights and residues is limited. And then my second question would be around how you view the economics of EV charging versus your conventional sort of liquids marketing business and what the ultimate market size might be, you think, across electric mobility versus that current sort of liquid fuels business. So you're talking about $100,000,000 of cash flow from operations additional from the electric business over the next 10 years, but ultimately, the current liquids business is likely to come under pressure as EVs come through.
So any thoughts around that would be great. Thank you.
On the first question, I will just preempt it a little because there are some commercial discussions. And as you just said, there are quite a lot of competition for the feedstock. And so we have decided in conjunction with 1 of our big partner and supplier not to reveal anything about it. First, because he has himself today some contracts and that coming to us by 2024 could have some impact on it. So I can tell you that it's clearly something very important like I think Bernard told you.
But I would say 40% of the 70% are guaranteed. But we cannot reveal anything about it respecting our commercial agreements. But it was for me a fundamental, as Bernard explained you, it was fundamental before to take the decision to invest. Beaumont, do you have something else to do? Or maybe on the other part of the other 30% to cover?
Where are you? Yes.
I mean the rest will be of course covered by vegetable oil mainly Rhapsid oil coming from local area. So it's not so much an issue. Now just Henry was making a comment that if things that the resources will be limited, what we showed basically is that there is 25,000,000 tons today and just half of it today is dedicated to biofuels. So after it's a matter of price point of course, but there is still some room to further increase the pool. And on top of it, as we see thanks to the collection rate increasing, we see this pool increasing as well over time.
So I mean securing now is key, but there will be more to come I think in the next
10 years as well. EV, this is for Alexis this one.
Thank you, Henry, for your question. I think there is no doubt that today the EV profitability metrics are not as dynamic as the conventional business. I mean, if you look at the average return of marketing and services, it's over 20%. It's normal because it's a mature business, whereas EV is starting. So we are a bit as we are explaining in the Renewable business, we target above 10%.
I think it's important for us to start this process to take position. As I said in my speech, the next 5 years are key because the rate, the pace will accelerate after. So it's important that we take position, which are profitable above 10% and the returns will come after. After that, in terms of strategy, it's obvious that we are I mean, my presentation was on purpose focused on Europe, because this is where it's happening. But Total is an international company present in various continents.
And I think our portfolio management of activities with the different maturity of fuel versus EV allows us to keep on to stay quite profitable and deliver cash flow from operations growing for the next 10
years. Your
next question comes from the line of Boris Chan from Scotiabank. Please ask your question.
Thank you. Good afternoon. Two questions, please. First, Patrick, based on your current business plan, when you believe you will reach the economy of scale where the low carbon power business will be cash flow breakeven and when it will be cash flow positive and what is that economy of scale? And a similar question is on the e mobility on the e mobility investment.
When that do you think you will reach the cash flow breakeven? And also whether that you will consider and when in the quarterly results you will break out the low carbon power generation business as an individual segment and provide the full financial impact so that we on the Wall Street will be able to do a better job in understanding and evaluating that. The second question is on the post 2025, your game plan seems to suggest you expect an acceleration in the energy transition. So from that standpoint, how should we look at your percent of your CapEx shift, whether that you are still talking about 85% in the legacy business and 15% in the low carbon power business or that, that is going to shift quite significantly? Thank you.
I'm trying to catch the last question because
The last question is that as in your business spend, it seems to suggest post 2025, we will see an acceleration in the energy transition. So how that is going to impact on your capital allocation? Are we still going to see 15% in the low carbon power business and 85% in the legacy oil and gas business? Or that percentage that ratio will change dramatically?
Not dramatically, but what we mentioned in the presentation is that we think that we'll go up to 20% and a little more we say more than 20%, but let's say 20% by the second half of the decade. So it's 15% for the coming 5 years and then 20%. So it's not dramatic. As long as we can maintain this, I would say, light capital model, but based again on the idea of low interest rate versus the sorry, there is no dramatic change in that picture because again this is a point. And because it's related also to your first question which is that all that of course we want to deliver one less on net cash flow positive.
And in fact if we more we invest of course, the more we generate cash flow. So I think the net cash flow positive will appear in the 2nd part of the decade. I don't have a precise model to tell you, but the second part of the decade.
And whether the company will consider to change the reporting and break down the low carbon business into an individual segment and provide perhaps that the full P and L so that we can do a better job in understanding and evaluating it?
I think we will give you like we have begun more and more information about it, but the structure has already changed. We have provided you quarterly results since the Q1 more and more clarity on it. We don't intend in terms to be clear, the organization we have with Gas, Renewables and Power has some value because it's in the integration of Gas and Power. And so I don't intend to change the organization of the company. And we like the reporting to be in line with, I would say, our own organization in terms of accountability, internal accountability.
And again, I think today it's premature because it must be material. And there is a question of materiality over that. But between today 2025 for sure there will be some change in the reporting way. But what I can ensure is that we will you will be able to have some metrics which will allow you to better see the growth of it And I would say the development of this business in terms of capacities, in terms of productions, in terms of
and so
we will organize the reporting. So because of our intent obviously is to be attractive to the market. So we'll give the figures which will allow you to be to compare what we do within TOTAL with some companies which are in that business, the Renewables and Power business.
Thank you.
Your next question comes from the line of Jason Kurney from Santander. Please ask your question.
Hi, there. Thanks. Actually, it's just a point of clarification, if I may, on the Total Eren option. I think you can take 100% stake from 2023 versus 29% stake today. Do all of your renewable power targets include 100% stake by 2025 or a 29% stake?
And either way, what contribution or what is needed to take that 100% stake in 2023?
We have 2 scenarios. And at the end, it's neither one nor the other question, so you will see. So it's neither 100% nor 29% that I'll override this. But again, this will have to be evaluated. I don't want to preempt this question because world is changing very quickly to be clear.
And we have also the option to IPO to Ren, which might be an option as well. And so we are considering, I would say, in our figures, it's not 100%.
Okay. Thanks.
The way we have taken all that is we didn't take 100% of all the projects in the pipeline. Okay?
Your next question comes from the line of Fimino Margarito from Magrove. Please ask your question.
Thank you so much for allowing also shareholders to ask the question. When I look at the last 10 years, Total outperformed the 2 closest ESPP in Shell by more than 50% of total shareholder return. Despite the price, the share price seems like 20% below. Of course, most of these returns was achieved through a growing dividend. My question to you is that, I mean, how is going to be the next 10 years?
What can change in the next 10 years that you will not continue to outperform your peers? And my second question is, last time around when we had the biggest portion of renewables, the utility companies that actually have independent, floating independent companies, were able to grow much faster than the ones that we indeed. Come to mind, Of course, EBS and Enel Verde that you mentioned in your presentation, but also the digital drawers, the NAL, the EBITDA Renewables versus the Germans that haven't done it. And so there were handicap because of that growth. I mean, do you think that by having a listed entity, you actually can grow much faster in terms of your renewal and leasing?
No, I don't think there is a link between being a listed company and being as a rate of growth. It's a matter of capital allocation. I don't understand it. As soon as we have a clear management dedicated to a business, and by the way, as soon as the management of the business unit, but having expressed the strategy today, that means that part of our time as well and part of mine and part of the time is dedicated now to grow this business and we dedicate time. So it's a matter I think of focus to grow and of strategy.
And we have the facility there to we have I mean this renewable company within Total, we have no problem to finance their projects. And we know that to access the money, which is not the case of many listed companies. So I think I don't see the why it should be not the same. Again, now the strategy is expressed. I have to ask to give the to be sure that we have the people dedicated, but it's well the way we run the business.
So I'm the second question is clear to me. It will not be an excuse. The first one
is what? You're all
continue to outperform. I don't know. My objective clearly to outperform both of them, but that's clear. But and then I would like also the stock to rerate accordingly to be clear. No, but again, I mean and I think by the way we have a differentiation factor today which is our dividend.
We offer to investors. So we'll see if it's reflected in the share price. So but I mean we are the 3 major European major oil and gas companies are more or less in fact the same strategy. I consider that and this is I hope what we have take away from this presentation, But we are in an advanced stage compared to others, but we have already some assets that we can give you some figures, but we are well engaged in it. But clear that we diverge with some of them.
We consider that maintaining our Oil and Gas business is a condition of the transformation because it will provide to us the cash flow that we need. And but I mean and it's also compatible like we showed to you with our climate ambition. And in particular, again, we are today the first to announce that we can lower our COP 3 emissions by 2,030. So I think we will keep, I would say, the fundamentals of the way we run the business with a certain discipline looking to a breakeven. And at the same time having the ambition to establish this at a large scale this business.
And the way we by the way we set the ambition we have also looked carefully to all the names we have mentioned in the electricity competitors to see at which way and which type they want to develop the business. There is one difference is that with these big utilities we don't have any hydro in our portfolio which obviously has some interest in terms of storing and the storage of electricity. That's the difference because when both all of them are speaking about renewable capacities, they of course taking onboard the hydro capacities that we inherited from the past and that these ones we do not have is part of the missing piece of the puzzle in our portfolio.
Our next question comes from the line of Anish Kapadia from Alecy Advisors. Please ask your question.
Good afternoon and thanks again for all the presentations. A couple of questions. First of all, the fall in the in crude oil that you see in terms of sales from Total, What does this mean for the retail marketing business, which I think previously was supposed to be a growth area now that you'll be selling less fuel? And also any impacts on your Chemicals growth plan? So if you can give any updates in terms of your cash flow targets for those businesses.
And then secondly, there's clearly a lot of value in the Total brand in Europe and globally. And in a more connected world, there should be value in customers from their data, from cross selling. We see a number of companies that are increasingly valued on the basis of the number of customers they have. So I was just wondering, have you thought about the value embedded in that existing customer base that you have and how further to leverage that in terms of cross selling and use of that data?
Thank you. Alexis is a fan of data valorization, so we'll leave him with the second slide, the second part. And by the way, I think also the first one, I would say, let me be clear, there is all the marketing businesses do not have the same profitability. When Alexis mentioned that he has mature assets about 20%, all the sales are not equivalent in terms of margins per tonne. And so I think it's there are ways and by the way, the objective, let's be clear, is to do what we have proposed by being selective about the sales not only in terms of CO2 impact but also in terms of margins impact.
And we see ways to in fact refocus part of the marketing business on the most profitable businesses and maybe given up the less profitable ones. You want to you can complement of Juss and you can answer the second question Alexis?
No, no. I completely concur with what you said. I think the we have now to look at our businesses, obviously, based on the CO2 emission that it generates for our customers. And we have obviously to have a review of our portfolio according to that. I think what was said earlier in the presentation is also that we are it's not only total of transitioning, it's also our customers.
So obviously, in this marketing business, what we have to do is to transition with our customers. So the example of for example, bunkering is clear. We want to move our customers to LNG and we will do that to make sure that they buy less carbon energy from us. Obviously, if at a certain date they have not transitioned then we will have to make decisions on the business. So I think it's a very, I would say, easy mindset.
We have to help our customers to transition and we then have to make arbitrage in based on the CO2 versus the margin it generates. As for the second question, I can't read properly the question.
So The question is just you have plenty of data with your 10,000,000 customers per day in your retail session. Why don't you sell it and make plenty of money with it? But my question is who will buy it in fact? Do you?
I think the as a joke, I think we have that question of putting an IPO on our own business. If you were a digital company and selling our data maybe we will be into the same like Apple. Yes, there is value in our customer data. I think it's all about using it internally to develop the services I was mentioning, whether extending the existing services of buying new ones. And I think what is key in marketing is that our systems are not proprietary anymore.
I think we have to open up to larger ecosystems and yet there is data when you share those data with other actors of your ecosystem and create value like this. Selling them is something that we're looking at, but I don't have any specific comment to make on that.
Okay. Great. But in fact fundamentally the idea is to develop more services to customers and thanks to data. I mean and we are you are developing a platform, I think a digital platform to do that project.
Clearly, I think specifically for through e mobility, I mean, electric mobility is digital native. I mentioned to you in my presentation that the along the value chain, our objective is to keep the relationships end to end with the customer. So it's very important that we are able to keep the customer in our system already in Europe can connect with other ecosystems. And definitely this is where the value of electric mobility and transition is coming from. I think it's a bit too early to give the proper figures on the potential value of the services, but it's clearly the way we go forward.
Okay. Next question?
Your next question comes from the line of Lily Geraintrod Ford from Barclays. Please ask your question.
Thanks. And thank you for taking the time to do all this. In terms of the Renewables business, you've got totally rent, total solar, quadrant, SunPower. And it does seem quite complicated to structure. Why do you need all those different businesses?
And within that, does it is it just geographical reach or is it within the effectively how do you get the economies of scale for the construction companies and things like that? I'm just trying to work out practically how you make sure that those businesses are competing with each other in tenders.
No, they don't compete. It's not possible. It's complementary. It's organized. It's part of the history.
I think one day probably we'll have to put that together, but it's quite clear. After that, doing E and P, I have plenty of subsidiaries, 1 by country and it's worthwhile. So it's not it's not complete, but it's clear. So it's the geography has been split. And there are different entities.
Some are on the distributed generation. Some are more on the large solar farms. So they don't compete and it's well taken into account. So I think it seems complex to you. It's not so complex from an internal point of view.
I mean, and again, the only part is that, as you said, Totaliren, we still are minority partners. So that's but again we develop them in the same way. So it would be easy to reorganize if we would want to create a Total Renewable company on the top. It's not it would be easy. And then you will not see all these names, which is why in my presentation you didn't see a single of these names.
And because for me all that is a portfolio of renewable like we have a portfolio of E and P licenses and I don't mention all the names of all the subsidiaries. It's just because it's still a little an infant. They like what is entrepreneurial experience, which we need to keep. I mean, it's also because I know that Philippe likes to keep his surgeries because each of them is building his business. And because we are in a very development mode.
So there is also a management advantage to keep sometimes some small entity having their own business. But as I said in my so one tech concept, it will be the right time now to think big. And if you want to think big, we need to organize that. We vote I mean, I've seen them a lot of reporting to finish with to get.
Okay.
Your next question comes from the line of Thomas Adler from Credit Suisse. Please ask your question.
Thank you. And I do apologize for the interim question.
Europe
and obviously refineries will be converted into biofuel plants and you can probably generate more money. But how do you offset the loss of earnings from the petrol station as light duty transportation is electrified because charge points are far less profitable? Thank you.
Because you have plenty of I think I mean the idea there is 1st in 20 by 2,030 or 2,050? 50. 50 by 2,050 our Renewable and Power business will be so large, but it will largely be larger than our marketing business. The ambition is not to stop there. So I mean, first question.
And second, I think you have an asset in the marketing business maybe which are all business work of shops. And that's a question mark for us that when do we really I would say consider that not only as a complementary business to selling fuels, but as a business as itself. And that's something that clearly we have there some assets which could be valorized and not only to sell them as we always said, but we can also develop a convenience store business. Total is maybe not the best company. We could take some partners to do that.
But it's like these assets could be developed. And it's true in Europe, it's also true in Africa, where you have we have probably one of the best network covering Africa. So I think I'm not so afraid by the fact that we can lose market in sales or liquids. That's why we need to embark in all this multi energy business including in marketing Alexey will soon establish by the way a business unit dedicated to all these new energies not being as an annex of the liquid fuels, but as an independent business unit in order to have its own strategy to grow the business. You want to No.
I just want to concur. I mean, in the strategy that we presented earlier this year, we especially on Europe, we show that we have an objective of generating 40% of our cash flows in Europe from nonfuel revenues. So this is clearly coming from the shop and from the all the associated services linked to the mobility whether it is car washes, tolls, especially for trucks, whether it is car parks and so on. So I think this is a complementary business. And whether you are charging on EV, you will still be mobile and you will still need to have the convenience of shopping nearby shops.
So I think this is something that we are looking very clearly.
But just Tomas just figure, if you look to if you take the figures which was given to you by Alexey, out of the $2,000,000,000 of cash flow per year coming from marketing and services, the fuel sales represent 1.3, 1.4, 2 thirds. So it's not it's interesting because it's stable, predictable. I mean, there's less volatility. So it's like we like this business. But at the scale of the company and 2,050 is not such challenge.
We will now be taking our last question from the line of Irene Himona from Societe Generale. Please ask your question.
Thank you very much. I had a question on renewables, if I may. Clearly, you explained the competitive advantages that you enjoy versus local utilities, your global reach, your trading capabilities. So if we take this week's specific deal in Spain, you said that this 5 gigawatt portfolio in Spain, thanks to your electricity trading capabilities, enables you to actually supply and cover all of your European sites with green electricity. I wonder if you can talk a little bit about what or how does the trading platform of Total need to adapt and change its model?
Because clearly, you cannot move or they cannot move the electrons. It's not the same as physically moving a barrel of oil. So what sort of new innovations? Or how does the model adapt and change? And does that create perhaps some different type of risks for that operation?
Thank you.
Yes. It's an excellent question. By the way, it's not the 5 gigawatt, it's 3 gigawatt out of the 5 that we need for our own operation. But it's the same question. Your question is valid.
Was a long discussion. And in fact at the end it was a combination of internally of on one side the renewable people who are very happy to have a corporate PPA. The refining people and chemical people were quite happy to have a green electricity at a good price. And in the middle, there was a pressure on the trading. So Philippe, you can elaborate all the management of this risk.
And by the way, one of the ideas also is to probably promote the interconnection between Spain and France politically. But can you take the questions?
Yeah. Well, first what you have to realize is that we have not started yesterday to develop power trading and we have been active in power trading and trading power across Europe since now more than 15 to 20 years. I was reading very recently the ambition in power trading in terms of megawatt hour traded and we were advocating, but we were not sure whether we were giving the mission of 125. We are already at this level today. So we know that business.
Yes, it's a very different business from compared to oil drilling. We need to balance our operation half an hour. We have a lot of conviction, especially in countries like Spain where there is limited interconnection between the Continental Europe and we take that into account. We can of course use some physical assets and the facilities that we have can allow us to edge our position on one side. We are developing also batteries on the other, but most of the flexibility will come from our ability to trade on the market and to resell or buy the power that we need to sell in Spain when we have too much and buy the power in the country.
So we will not have enough in order to supply our entities. But it is something that we know what to do. But sure that the extent of the contract is massive and is forcing us to develop a specialized team in order to address that.
But I like this. It was the last question, Reni. I like the question because in fact through this question, I think you touched the real value that a large oil and gas company like an integrated company can bring to this business of Renewables and Power because it's exactly what we speak about integration there. And part of the answer will be sure that when we take on both such contracts, we immediately think okay then that means that we need to have more storage assets with type of assets in order to build the business. And that's the beginning, I think, of a new creation of value.
So I think it's first of all, I would like to thank all of you for your participation. Sorry, it has been a little long, 4 hours and 30 minutes. I thank you because there are many questions along these two hours of Q and A. I'm sure you have more and we will have the following weeks to come back to you and to answer to more of your questions. I think clearly that this is, as I said, for us an important day because we have put together and because again the strategy to transform Total into this broad energy company, I think it's a very interesting challenge.
But we are also convinced with the Board of Directors that this is the right direction, as I said, to accelerate and to answer and to convince now investors that this model is best one of the right model in order to grow and to in these fields. We've again having maintaining our core business that we need and to generate the cash flows and then to accelerate progressively the ambition ongoing on renewables and power to generate new cash flows. And there is a virtual circle. And the last year that we spent, again, I think getting the fruits of all what we have prepared during the previous before make us confident that we can develop this model. And I hope we will convince more investors and that Total will be able to convince Black and Green for the benefit of our shareholders.
Thank you for your attention.