Good afternoon. This is the conference operator. Welcome, and thank you for joining the TotalEnergies Energy Outlook 2022 Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Renaud Lions. Please go ahead, sir.
Good afternoon. Good morning, wherever you are. Welcome to TotalEnergies Investor Days 2022. The event will be in two parts. Tomorrow, we will be in New York City for a full day of exchange and updates on our strategy and business outlook. Today, we are presenting the first part, which is our energy outlook. The session will be followed by a Q&A. For now, let's open the session with a sustainability moment and a short movie.
TotalEnergies is aiming for zero methane emissions. The company has already halved its emissions since 2010, and it's targeting to cut them further by 50% by 2025, and 80% by 2030. As an important step to reach this target, TotalEnergies has launched a worldwide drone-based emissions detection and quantification campaign across all its upstream oil and gas-operated sites. The campaign uses AUSEA technology developed by TotalEnergies and leading research partners in France. AUSEA is a miniature dual sensor mounted on a drone capable of detecting methane and CO2 emissions while at the same time identifying their source. Measurements can be taken at all types of industrial facilities, onshore or offshore. Here in Angola, the operation is performed from a support boat. We are recording with the drone in the air the gas emissions from the flare tip and from the exhaust of the FPSO. The recovered data is then sent to TotalEnergies OneTech in France for treatment and analysis.
Good afternoon or good morning. I'm very happy to welcome you today for this TotalEnergies Energy Outlook together with Helle Kristoffersen. In fact, Helle will walk, and I will listen, like you. It's our fourth time that we publish this TotalEnergies Energy Outlook. I think it's an important effort of all the teams in the company in order to try to give and to share with you a vision of the energy markets, which are, I would say, quite moving markets. We'll present you, and Hello will embark you on this journey through the Momentum and Rupture scenario. I will not be long, but I will leave the floor to Helle, and then we'll try to answer together to your questions.
Hello, floor is yours.
Hello, everyone, and a very warm welcome. Thank you for joining our presentation on our 2022 outlook, as Renaud just said and Patrick introduced it. As you know, our outlook explores the possible trajectories for energy demand between now and 2050, taking into account the need to accelerate decarbonization to cope with global warming. The context for this year's edition is obviously very different from last year. I think that's clear to all of us. Before I elaborate on that point, here is a first view on some energy trends over the last 20 years. Lots of data on the chart, but the key takeaways are the following. There are tangible signs that the energy transition has started. For instance, the decoupling between GDP and emissions growth, thanks to energy intensity gains.
The fact that power is now the fastest-growing energy and oil is the slowest one. Recognizing also that natural gas and renewables have been growing at the same pace over the last two decades. On the other hand, growth in coal demand remains very high, and the share of fossil fuels in the overall energy mix has barely moved in 20 years. It's still above 80%. We have clearly a lot more work ahead of us to build a low-carbon, diversified energy system. As we were working on our models with everybody in the teams, one top-of-mind question was the following: Will the current market disruptions speed up or slow down the energy transition? Of course, there are short-term trends pointing in both directions. Energy demand has proven extremely dynamic in 2021, post-COVID, and also in the first half of this year.
This has happened at a time when energy security and energy affordability are taking the center stage politically and economically. Oil and gas matter, it's as simple as that. Coal demand is rising sharply right now, not good for sustainability, of course. By contrast, it also underscores the role of natural gas as a transition energy. On the more positive side, energy efficiency efforts are gaining pace, not only because of the high prices, but because people worry that they simply won't have enough energy. Energy efficiency measures are essential to reaching the goals of the Paris Agreement, so anything that goes in that direction is good news. We can all contribute, you and I, and companies, and everybody in society, and you will hear tomorrow how TotalEnergies intends to play its part.
Other good news, the EU and the US have come up with new plans to accelerate the deployment of renewables. That's embedded in the REPowerEU Plan and the Inflation Reduction Act in the US. Clean hydrogen continues to gain traction. Richer countries will hopefully deliver on their commitment to support the energy transition in the rest of the world at the upcoming COP, paving the way for a more just transition. The first important step in that direction will be to effectively contribute $100 billion per year promised in Paris, and that was going to start in 2020. Overall, I think that we are all aware that the real challenge is what's listed at the bottom of the chart here, mainly preserving energy security and affordability through the transition.
Here are now, as Patrick said, our two demand forecast scenarios to 2050. They're built with the same logic as last year for those of you who follow us. Momentum is a forward-looking scenario. It takes at face value all the stated commitments to reach carbon neutrality by 2050 and all the NDCs of other countries. It is the same framework as the APS scenario that the IEA published last fall after our first edition of Momentum in that framework. Momentum goes way beyond a business as usual case, but it still results in temperature increases of between 2.1-2.3 degrees in 2100 using IPCC P66 curves. Rupture, to the right, uses a back casting approach. It has been built on purpose so as to be in a well below two-degree world.
Again, using the IPCC P66 curves. Global warming is limited in this scenario to 1.7 degrees. As Patrick said, we have also run a sensitivity on Rupture called Rupture+ to test under which conditions we could go from a 1.7 degree scenario to a 1.5 degree scenario with a P50 framework, which is the same framework as the one adopted by the IEA in their net zero emissions scenario. I will elaborate a little more than last year on Rupture+ towards the end of this presentation. Here is now a recap of the scenario assumptions in both cases. GDP growth is assumed to be 3% per annum in both scenarios, but energy demand growth is different. It grows at 0.4% in Momentum and is halved to 0.2% per annum in Rupture.
This compares with 2% growth per annum in energy demand over the last 20 years. We have modeled quite a change in these trends when it comes to demand. Momentum assumes an accelerated deployment of greener molecules and electrons. First, more efforts are needed compared to last year since the starting point post-COVID is higher. The transport revolution with substitution away from oil keeps gaining pace, and we have modeled a massive electrification of road traffic, including heavy duty, and stepped up the use of sustainable liquid fuels for aviation and marine. Electrification of end use is also becoming broad-based outside of transport and drives up the deployment of renewables. Natural gas keeps its role as a critical transition fuel in all sectors except perhaps road transport. Biofuels and biogas are seeing increased penetration in select markets.
As I said earlier, the potential of hydrogen, clean hydrogen, is confirmed with a ramp up after 2030, either as a clean gas or through its derivatives such as ammonia or methanol. Finally, we've also revisited demand for plastics where recycling is definitely picking up. That's for Momentum. Rupture then is essentially requires that all these decarbonization drivers, mainly of the Net Zero 2050 countries, be disseminated at scale across other markets. Its key assumptions are listed here. I will let you read them. Just remember that this well below 2 degrees scenario allows for energy demand to grow slightly over the next 30 years, which is a major difference with most comparable scenarios. Just if you're trying to benchmark, keep that in mind. The chart here is from Momentum. It shows how the overall demand growth of 0.4% per annum covers two completely different realities. A decrease in OECD, thanks to strong progress on energy efficiency, mostly in the form of energy savings. That's what's shown to the right of the chart. An increase in energy demand of close to 1% in non-OECD countries to the left. Here, the story is very much about energy access for growing populations, increased living standards, and energy efficiencies coming not from savings, of course, but from the switch to modern forms of energy, moving away from low density, inefficient traditional biomass. We'll hear more about that in a while when we cover Africa.
For this transition to happen and for energy to grow and change content in Africa and elsewhere in emerging markets, once again, it is critical that the developed countries help the rest of the world via funding, technical transfers, training of people, and so on. We know that we need to curb emissions, but how do we do that? Just in case it's not crystal clear, acting on energy is paramount because two-thirds of greenhouse gas emissions are energy-related. It's mostly CO2, but it's also methane, and we are well aware at TotalEnergies that methane needs specific and urgent action. Maybe you remember the sustainability, moment that we just showed through the little film. As you can see, coping with emissions from power and transport, that's to the right, is what will have the biggest immediate impact. Getting rid of coal is also an obvious priority.
That's all the very dark colors to the right. This is, of course, what we've tried to do in our two scenarios: act on emissions that are summarized here. This chart here recaps the key modeling drivers of our scenarios. It's a chart that some of you like to have, and they are listed here. I can cover them quickly. The numbers are rounded up, but again, I think it's useful. The seven drivers are strong electrification of end use, deep decarbonization of power supply, gases going greener, sustainable mobility, increased plastic circularity. CCS, of course, is required to abate remaining emissions.
I insist on the last driver here, energy efficiency acceleration, doing much better in the two scenarios than what we have been doing over the last 20 years, 2.4% in Momentum, 2.6% in Rupture, even more in the Net Zero 2050 countries, and that compares to 1.5% energy intensity improvement since 2000. So accelerated energy efficiency is definitely also required. Now I move on to Momentum. The major transition levers of this scenario can be summed up, I would say, in three categories that are listed here: a revolution in transport, a massive growth in clean power, knowing that all the Net Zero 2050 policies of countries around the world, they all have electrification as a driver on clean power, and then the progressive pickup of the use of clean hydrogen.
The units in the following charts is going to be in petajoules per day except stated otherwise. Here is first the evolution of energy consumption in the light-duty vehicle segment. That's passenger cars and two wheels and so on. That covers, that represents around 50% of CO2 emissions in transport, so it's big. It needs to be tackled. The massive electrification of fleets in the Net Zero 2050 countries and in China is confirmed as a number one decarbonization driver of this demand segment. It's true for both passenger cars and two to three wheelers. Maybe you noted that last year, the electrification of two to three wheelers in the world displaced almost 1 million barrels per day of oil demand. That's definitely something to look for.
This electrification trend is largely driven by the thermal car sales ban in 2035 in Europe and in several of the states of the United States. It will not be a smooth transition. Let me flag that, because the transition requires well-functioning, well-supplied power networks, and it also requires enormous amounts of new infrastructure. Nevertheless, in 2050, the electric vehicles and fuel cell passenger cars reach 55% of passenger cars globally in the world in terms of penetration, and that's 100% of penetration in the fleets of Net Zero 2050 countries and close to 90% penetration in China. Oil demand ends up just around 50% in the light-duty mix in 2050. For heavy-duty vehicles, that is around 30% of today's transport emissions. Electrification, biofuels, and H2-based fuels all contribute to decarbonization.
You can see all the colors on the chart to the left in 2050. In this chart, clean hydrogen-based solutions mean fuel cells on one hand and H2-based e-fuels on the other hand, so the e-fuels that you get by combining hydrogen and carbon molecules. Regulation plays its role in this segment as well via a ban on thermal heavy-duty engine sales in 2040 in all the Net Zero 2050 countries. That's the assumption that we have modeled. There has been quite a lot of development in electric trucks over the last year or so, both the urban trucks and long-haul trucks, and we are seeing improved perspectives to decarbonize both.
Overall, therefore, the heavy-duty demand ends up with the same share of oil in 2050 as a mix for light duty, again, around 50% or a little more. Moving on to aviation and shipping, that represent respectively 12% and 10% of transport emissions. A lot is going on in these two sectors as well to decarbonize via new targets that have been endorsed by the IMO and by the IATA. Aviation cannot do without liquids due to density needs and storage constraints. The scenario here assumes an increased share of biofuels for airplanes at the expense of road transport because road has other options. Over time, there will also be a high penetration of hydrogen-derived fuels, the famous sustainable aviation fuels, the SAF.
For shipping, decarbonization will happen in two ways, revolving first around LNG and biogas, and then after 2030 around a strong pickup in clean hydrogen-derived fuels, including e-ethanol and e-methanol and e-ammonia. That was for transport. This electrification of transport and of energy end use more broadly then leads to a massive need for clean power. That's what this chart is about. Note that we exclude hydrogen, green hydrogen from this chart here. We'll close the loop on that in a little later. Power demand, excluding hydrogen, is up by 2% per annum in Momentum. Transport represents roughly one-third of the increase to 2050. It's the second-largest contributor behind residential and commercial. Even without hydrogen, power generation almost doubles over the next 30 years.
Solar and wind make up for 90% of the new capacity in our model, and that means that renewables capacities are multiplied by seven in 30 years, and they end up representing roughly 60% of global power capacities in 2050. Gas is the only fossil fuel to grow in power due to its key role in coping with renewables intermittency on one hand and demand seasonality on the other hand. Gas provides flexible, reliable, and dispatchable power. The overall emission factor of power is down by 75%, including CCS. Let me just see if I skipped a chart. No. Next. Here is now a chart on oil and gas demand. This chart is in BCM and in million barrels per day. To the left, you see the growth of natural gas without blue hydrogen.
It grows in the first decade, and then when it helps replace coal in power and industry. Then after 2030, gas enters a long-lasting plateau starting in the early 2030s. For oil, demand reaches a plateau at the end of this decade and starts declining after 2030 at a rate which is shown here to the right around 2.3% per annum. This is, of course, well below the natural decline of existing oil fields, so we definitely need new oil projects in this scenario. Oil demand ends up close to 60 million barrels per day in 2050. What about clean hydrogen? Moving on to clean hydrogen, as you've well understood, it's one of the new molecules associated with the transition.
Its potential is enormous, with a tenfold increase between 2030 and 2050. Only a slight increase until 2030. What's needed now is to build the required infrastructure and value change and stimulate demand through subsidies or supply-side incentives, lowering overall cost. Transport and hard-to-abate industry make up most of end-user demand, as you can see on the chart to the left. In terms of technology, we assume that the supply will be split between green and blue, with roughly one-third for blue and two-thirds for green. Blue hydrogen, that's to the right now, adds more than 10% to gas demand in 2050, requiring roughly one gigaton of CCS. Green hydrogen adds 15% to power demand. It may not sound big, but remember that in Momentum, the power capacity are already incredibly high.
Adding 15% to power demand effectively means tripling today's worldwide solar and wind capacities. We'll talk a little more about the footprint required for renewables towards the end of my presentation. Here is now the evolution of total final demand in total final consumption in Momentum. Again, it grows around 0.4% per annum. The messages are the following: Electrons take over from oil as a number one source of final energy around 2040. The mix diversifies a lot, as you can see from the colors, and the new molecules, such as hydrogen and its derivatives, begin to have a visible contribution by 2050 for sure. Transport, that's to the right, decarbonizes much faster than the other sectors, in purple, as you can see.
If we now move to primary energy demand and CO2 emissions, what do we have? Here is a wrap-up for Momentum. Despite the efforts of the Net Zero 2050 countries and the NDCs of everybody else, we end up in a world where temperature increases between 2.1 and 2.3 degrees, as I already said. Residual emissions stand at 24 gigatons in Momentum, net of 3 gigatons of CCS. More efforts required. Before I move on to Rupture, I now have a few charts with some focus presentations. One on the Net Zero 2050 , one on the EU, and one focus on Africa. First, the Net Zero 2050 countries. They play a pioneering role in the adoption of low carbon solutions, and they are modeled in the same way in Momentum and in Rupture.
We now have 40 Net Zero 2050 countries in our model. They dominate the world economies, you can see on the chart here, and they also dominate energy demand, but that will no longer be the case in 30 years from now, which is why the policies of this block are both incredibly important to fight climate change and far from being enough. The main game changers in these countries are listed here on the chart. Power generation becomes carbon neutral around 2040, net of some CCS. Road transport becomes carbon neutral by 2050. Electrification is very high with clean power. There is, you know, strong penetration of clean hydrogen and green gases. With that as levers, here is the primary energy demand in the Net Zero 50 block.
Remember that these countries are on aggregate, the richer and the more developed ones. This is why demand is down in this block by close to 1% per annum via electrification and strong policies aiming at energy efficiency and energy savings. The mix is highly diversified, and the share of fossil fuels is divided by two in 2050, so it goes from today's 80% to 40%. Coal is virtually gone. Oil demand ends up at 8 million barrels per day in 2050. Natural gas, having helped getting rid of coal, keeps a role in power as a complement to renewables and to produce blue hydrogen. Its use is combined with CCS. Indeed, out of the 3 gigatons of CCS that we've modeled in Momentum in 2050, 2 gigatons go to the Net Zero 2050 countries.
They also lead on CCS, of course, and CCS begins to play a visible role after 2030. The residual emissions of these countries in 2050 are around 1 gigatons of emissions, and they will require nature-based solutions or new technologies such as direct air capture. Now, I zoom in within the Net Zero 2050 , I zoom in on Europe, so that's the E.U. 27, excluding the U.K. and Norway. For the E.U., our model assumes that the continent manages to harness the short-term turbulence with respect to energy security and affordability, and therefore continues to push on and advance the Green Deal. Within the Net Zero 2050 countries, the E.U. is a front runner on several accounts.
In terms of decline in the use of fossil fuels, aggressive deployment of bioenergy and renewables, and a stronger role for renewables overall, explained in part by very high penetration of green hydrogen. Green hydrogen uses up roughly one-third of the solar and wind that you can see on the chart here to the left. The EU also leads in terms of decreasing energy demand, thanks to extremely high energy efforts. Making the link with today's energy crisis, it's clear that we have a unique opportunity to pursue and anchor energy efficiency efforts right now. Let's just do that. Energy efficiency is clearly all the more relevant in Europe as it's becoming crystal clear that energy security and a green transition come with a high cost. The next zoom is on the transition in developing countries, those that don't have a net zero target for good reasons.
We've chosen to talk about Africa. 1 billion people today, 2 billion in 2050, and they aspire to have much better living conditions, and they need energy for that. As you can see, Africa's share in the global emissions is ridiculously low, and it will remain so. Which causes African leaders to be more and more vocal about their intent to use their abundant natural resources, solar, wind, hydro, fossil fuels, for the development of their continent. They are right, of course. It's gonna be one of the key messages of the upcoming COP in Egypt. Here you see the energy mix of Africa today and in 2050 in our two scenarios, Momentum and Rupture.
The striking part is the huge share of traditional biomass in dark green, which is highly inefficient and bad for climate, human health, and biodiversity. The transition opportunity for Africa, one of the opportunities, is to stop burning waste and wood and switch to more modern energy, which will enable more energy for more people with a very modest impact on CO₂ emissions. As you can see in a well below 2-degree scenario, which is R upture to the far right, that means effectively eliminating traditional biomass and replacing it with a mix of all other more modern energies, including oil and gas, and of course, a lot more power, clean power. One way to get rid of traditional biomass to substitute that biomass is in fact electrification.
Africa's need for power is going to be driven in the first place by the rising population and rising urbanization. You can see to the right here that ResCom makes up for some 50% of power demand in 2050 in our two scenarios. Power generation is multiplied by three in Momentum and by five in Rupture. Depending on the scenario, 80%-100% of the growth comes from solar, wind, and hydro, all clean energies that Africa has plenty of. For that to happen, Africa needs funding and support and an improved power sector governance, because power is, of course, entirely local. Now I move on to Rupture. Remember that by construction, it's a well-below 2-degree scenario, assuming that the whole world somehow follows suit on the Net Zero 2050 countries.
With respect to total final consumption, electrification needs to happen even faster than in Momentum, and it needs to be extended to developing countries. Power becomes the number one source of final energy around 2037. The share of power in the mix is 1.5 times higher than all fossil fuels combined in 2050. The three contributions of hydrogen-based energy, bioenergy, and natural gas ends up pretty similar in our model. Looking to the right, both transport and industry see massive drops in their CO₂ emissions, and ResCom is only slightly behind. Let's now look at final demand just quickly sector by sector. In transport, Rupture assumes that the ongoing substitution away from oil in the Net Zero 50s and 50 countries and China extends to the rest of the world.
The share of non-fossil fuel increases for all types of traffic. Oil ends up representing less than 1/3 of transport demand in 2050. Industry and ResCom. These two sectors both see deep electrification and very high energy efficiency gains. In industry, decarbonization is facilitated by multiple in-depth changes to processes. Coal to gas switching, gas to power, pickup in hydrogen, and 3 times more CCS than in momentum. We have 0.5 gigatons in industry and momentum. In rupture, it's 1.5. In the ResCom sector, electrification reaches close to 2/3 of final demand due to the link with urbanization. Demand is further reined in by energy efficiency gains in appliances, lighting, and so on. As you know, I like to stress this, the energy efficiency gains in that segment is more a socioeconomic issue than a technical challenge.
Power demand in Rupture grows at around 2.5% excluding green hydrogen. To be in this well below two degree world, we need to entirely rebuild the power system. Not only that, in 2050, its size has to be twice as large as it is today. Electricity from solar and wind is staggering big, 30% larger in 2050 than all the power generated in the world today. Such a new power system shaped by intermittent renewables will require massive storage solutions, be they battery-based or green hydrogen-based or using some new technology. That new power system will also require large scale grid upgrades, including flexible and dispatchable power plants. More on that in just a few charts.
In Rupture, clean hydrogen represents a market close to 500 million tons per annum in 2050, 1.5 times more than in Momentum. Two-thirds of that is green, one-third of that is blue. Those proportions don't vary very much in our model. That adds 20% to both power and gas demand in 2050. Again, the orders of magnitude here are very, very big, and I think they're difficult to apprehend. So we've given some benchmarks on the chart here. In 2050, blue hydrogen would use as much gas as all of Asia today. Green hydrogen would be produced from the equivalent of half of today's power demand. Half of today's power demand only for green hydrogen tomorrow, that's pretty big.
Here is a view of gases demand in Rupture, not only natural gas, but all forms of gases. Overall demand grows at 1% per annum with a massive push on clean gases, and that is what you can see to the right. 60% of gases demand is satisfied via green gases, that is hydrogen, biomethane, and CCS-abated natural gas in 2050. There are three main demand pools for gases: power generation, industry, and blue hydrogen, of course. Liquid fuels also become much greener. In the transport sector, the sustainable liquid fuels, meaning biofuels and e-fuels, reach 40% of liquids demand in 2050. Oil demand overall falls to 37 million barrels per day in 2050 in Rupture.
Here is the wrap-up of the total primary energy demand for Rupture, reconciling a greener energy system with sustainable energy for everyone. As you can see, the mix is much more diversified than in Momentum. I will let you look into the details. The Rupture ends up with approximately 7 gigatons of residual emissions, net of 6.5 gigatons of CCS. I know 6.5 sounds very precise, so please bear with me. If you look to the right, compared to Momentum, 70% of the cumulative abatements required over the next 30 years come out of Asia. This is a work that needs to happen to move from Momentum to Rupture. We need to work a lot, you know, helping and partnering with Asia to decarbonize.
As for the Net Zero 2050 countries , residual emissions in Rupture will have to be abated through nature-based solutions or innovation in carbon removal technologies. Now, in this chart here, we've attempted to do two things, close the loop on the investments required for Rupture, the amount of dollars required to be spent between now and 2050, that's to the left, and also closing the loop on the land requirements for the onshore renewable deployments in Rupture. This is only orders of magnitudes, but we thought we wanted to share this with you. First on investments. It's kind of obvious, but the energy transition means that we have to fund the building of a new energy system, I think that's clear, while continuing to investing in the existing one to address short and mid-term demand. It's costly.
In this decade alone, we will have to double investments. That's what you can see on the chart. We need to go from roughly $1 trillion at present to $2 trillions in 2030. A lot of those investments will have to go into renewables, power grids, energy storage systems, electrolyzers. Even in Rupture, which is the basis for this quantification, we also need to invest in new oil and gas projects, not just maintenance, to satisfy demand. To the right, then you see the land required for the deployment of the solar and onshore wind capabilities that we have in Rupture. There is no real issue if you look at aggregate numbers. We're talking about a footprint that is below 1% of available land, and we qualify it as available land with low density vegetation.
That, of course, is something that can be disputed, but it's just, again, orders of magnitude. However, there are two groups of countries below, I would say, the global picture. Those where the footprint of renewables is effectively a no-brainer because they've got plenty of empty spaces, even if the empty spaces may be far away from the demand centers and the demand pools. That would be, for instance, China or the U.S. Then there are countries where renewables will increasingly require public support or even mandates because the territory is already very densely occupied. That's the case of the EU. Germany's recent decision to dedicate 2% of its land to onshore wind would be a case in point.
Of course, that's also an excellent reason to invest in offshore wind, and that is what we're doing. I will finish on a couple of charts on how to get from a well below 2-degree scenario to a 1.5-degree scenario. We've done that, as I said earlier, by sensitivity on Rupture called Rupture+. The main drivers are shown here. What we've done is essentially look at how we can reduce carbon further sector by sector. We list here what modeling assumptions we've used for industry, for transport, for the residential and commercial sector, and for power. We remove roughly 6 gigatons of CO2 in 2050 from the Rupture scenario, and we increase CCS only slightly from 6.5 to 7.5, which happens to be consistent with the IEA's net zero emissions scenario.
Overall, doing this makes Rupture+ consistent with a 1.5 temperature increase in 2100, using the P50 framework of the IEA. The important message, of course, is that it can be done, but it's very, very demanding on all of us. The takeaway is that meeting the 1.5 degree requires another step change in energy supply and in energy demand, driven by regulation, technology, and our behaviors. Here is a resulting total primary energy demand contrasting Rupture+ with Rupture and with a net zero emissions scenario of the IEA. Oil demand ends up being pretty similar in Rupture+ and in the IEA net zero emissions scenario in 2050. I think that's 23 million barrels per day in one scenario and 24 in the other one.
We agree on the landing point for oil, but we do not share the same trajectory at all. Another important difference is that energy demand does continue to grow even in Rupture+, which of course is not the case in the IEA net zero emissions scenario. Just to be very clear, you may remember that the net zero emission scenario of the IEA is a 1.5-degree scenario, so-called without overshoot. Therefore, in fact, it's not achievable. That is what the IEA's own short and midterm demand forecast clearly tell us. The world is very far from being on a trajectory with no overshoot. On the other hand, given the way it's constructed, Rupture+ here overshoots, so it requires implementation of negative CO2 solutions post 2050.
On this chart here, we've just tried to represent that to be completely clear. The order of magnitude of negative emissions is equivalent to some 4 gigatons per year between 2050 and 2100. It does not seem impossible at all in terms of scale, provided that we all continue to focus our R&D and innovation efforts on decarbonization and carbon removal. At TotalEnergies, we currently allocate more than 60% of our R&D efforts to clean tech and will continue to increase our efforts and our commitments. My last chart here just summarizes the key highlights or findings from everything I just covered, and it's here for your convenience, and I will maybe close by just repeating them very quickly.
The short-term trajectory of global energy demand is not going in the right direction, so more efforts are needed to decarbonize while ensuring energy security and affordability. The current crisis is for sure an opportunity to increase and anchor energy efficiency measures which are critical to reaching the goals of the Paris Agreement. In the richer world, electrification of end user demand is a structural evolution that helps reduce emissions and increase energy efficiency because electrical engines are just very efficient. Significant investments in clean power and electrical power grids is essential for the success of this electrification trend. In non-OECD countries, particularly Africa, switching away from traditional biomass to modern energy will improve energy efficiency while providing affordable energy access to growing populations, better living standards, and of course, economic development. Natural gas continues to play a key role in this transition.
It ensures firm power, dispatchable power, complementing renewables and replacing coal in all sectors of final demand. Gas will become green over time, and its growth will be accompanied by carbon capture and methane emissions, containment solutions. Hydrogen and sustainable liquid fuels are promising decarbonization drivers, but they will scale up after 2030. In the meanwhile, renewable diesel and biogas will develop. The current decade is really decisive when it comes to investments. Investments in low-carbon power must double between now and 2030 to reach $1.5 trillion per year in 2030, and earlier than that actually. Even in a well below 2 degree scenario, investments in new oil and gas developments is required to satisfy consumer demand at least until 2030, in the middle of that decade.
Finally, the energy transition also requires massive investments in clean tech R&D. I'll stop here. I'll thank publicly everybody involved in putting together this analysis. Thank you, team. Well done. Now Patrick and I, we're ready for Q&A.
Thank you. This is the conference operator. We will now begin the question-and-answer session from the conference call. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Henri Patricot with UBS. Please go ahead.
Yes, everyone, thank you for the presentation. I have two questions, please, on the scenarios that you present. The first one on natural gas and looking back at the numbers that you had last year, one thing that struck me is that you do have much lower natural gas demand in your Momentum scenario in 2050 than last year. Not gonna have a guess at what's, you know, driving these changes given where we see gas prices then in recent events. It was interesting if you can give us a sense of the moving parts here, where you've cut the long-term gas demand that much in that scenario.
Secondly, I had a question on the energy savings that you have in these two scenarios, you know, relatively close to 0.4%-0.6%, which are both quite a step up versus what we've seen over the past 20 years. Would you expect that significant improvement to come from inefficiencies? Thank you.
The first question, I think, on natural gas. First, it's not linked to the short-term prices. I would say even if I would say high gas prices as today will contribute to demand destruction, but it's not the reason why on the long term there is less gas demand in our scenarios. I think the fundamental evolution for me is linked to two. One is technically, is that we put hydrogen when it's blue hydrogen outside of the gas demand. We consider it's a hydrogen demand even if it will require some gas when it's blue. But you know the 1/3, 2/3 that we took as an assumption for clean hydrogen is not, I mean, is not a scientific share, it's just an evaluation. We put this gas demand for hydrogen aside of the gas. First remark.
The second point is on transportation. In fact, what we observed, there was quite a big push to use gas as a fuel, I would say, for heavy duty and even for marine transportation. We believe that this in particular for heavy duty will not be as strong as we thought in the previous years because we observe a big push first on the electricity-driven trucks. I think all these investments which are done by car manufacturers in EVs. In the battery technologies, it's billions of dollars. It's thousands of people, engineers and technicians. We believe that it will accelerate strongly with the capacity of these batteries, including on the next step for heavy duty. Electrification is a longer.
This is a different assumption in terms of the way to decarbonize, I would say, trucks transformation. That's the two main reason behind this demand, this lower demand for gas in these scenarios. On the other question, maybe, Helle, you can. There was two questions.
I didn't catch the second question. We couldn't hear it. If you don't mind repeating.
Yes, of course. The second question was on the energy savings increase that you have in the scenarios going from 1.5% per annum to, sorry, 2.4%. Where do you expect that improvement to come from?
In the two scenarios, it has to happen across the board because the data you just mentioned is really globally. The Net Zero 2050 countries, they lead. Again, as we try to show there is a difference between the OECD countries and the non-OECD countries. In OECD, a demand will go down because of energy efficiency. I mentioned Net Zero 2050, I mentioned Europe, and there will be mandates, and I would say they are rich enough to invest in the efficiency programs. In non-OECD, a big piece of the energy efficiency improvement will come from moving away from traditional biomass, which is inefficient. Even without increasing energy demand a lot, it does increase close to 1%, but you can improve energy efficiency enormously by switching away from this inefficient form of energy.
On energy saving, to be clear, it's one of the big challenge. We know that it's a huge improvement compared to what we do for the last 20 years. Now we are making something like around +1% . We need to go to 2.5%-3%. I think this, by the way, for OECD countries in particular, or even for the world, this huge rise of energy prices, unique opportunity to put in the mindset on all the population that we need to save energy, you know? I think we see more and more energy efficiency program being implemented in many of our countries, in particular in Europe.
I think it's really for governments, a very unique opportunity to develop these programs and then maybe to embark everybody, to anchor them, I would say, in the future of any energy policy, because there is no way to make the transition without really reducing our consumption of energy. It's very ambitious because, as you know, on the other side, in emerging countries, the population is growing. You have these two opposite trends, but I think it's really something on which we need to accelerate. By the way, it will help to save money today, and so saving inflation. It would also help the security of supply.
You know, if we need less, it is a nice way to solve the security of supply that we could face, you know, here in Europe. I see some questions coming, by the way, from somebody in the plane. Irene is in the plane, so maybe I will ask myself or to Helle the questions, because we see that appearing on our screen. Just the first question from Irene. That's for Helle. I will just play the journalist today. In both scenarios, electrification is a key lever for decarbonization. Can you talk about the challenge that infrastructure constraints create in terms of the cost of massive expansion of grids? That's the first question.
The challenge that infrastructure constraint creates in terms of cost. Well, I guess it's back to funding the energy transition overall. It's a question of allocation of public money. We know that it is going to cost several basis points of GDP to change our energy systems. I don't think there is an answer to your question, Irene, in terms of the cost. Again, it's a choice. It's a choice of society, it's a choice of countries, and it will require dedicating 2%, 3%, 4% of GDP to changing the energy system and electrify. We try to address this here, this point of footprint, because there is a cost, and then there is the cost in dollars, and if you wanna call it like that, the cost in land. This is why we try to come up with the focus on just land requirements. It's clear that in Europe there is a question.
Just to add on the answer. I think we tried in one of the slides to evaluate the level of investments for this transition. We said, and Helle said from 500 to 1 point. We need to add $1 trillion, $1.5 trillion for, I would say, the new decarbonized energy system. Almost half of it are grids. In fact, when you grow, you look to the trend up to 2050, it's even growing to more than $1 trillion should be dedicated to grids. I think, by the way, it's a very important message today to, in particular here in Europe, to all governments. You know, today we face, part of the difficulty we face in this gas and power markets are not enough interconnections, you know.
Not enough, in fact, we discover that we don't. We have established a liberalized market, but without maybe physical, I would say, access to this market. I think it's very important, not only on the short term, but it's no regrets, no-regret investments, I would say, to invest in grids at the national level, at the continental levels. Probably we have grids which have been established quite a long time ago, and there is no. When the car manufacturers, like the CEO of Stellantis said, "Okay, we will build the cars, EVs," but do we have the infrastructure? It's not only a matter of charging points, you know, and we will have the charging points. I'm not worried about it. It's also a matter of grid. You have probably observed.
Two weeks ago, I think, in California on one side, in China on the other side, at the same time, the governments have asked EV owners to leave their cars at home. I'm not sure it will be a lot of success for the citizens if we begin to say, "We make the transition, but by the way, our grids does not support all these EV charging, and you need to leave your car at home." It's a really fundamental, I think, aspects, and your question is very good. We need, I mean, not only are the private players. I mean, the public and private players must really tackle this grid issue, maybe two grids. Okay. Next question from the. No? We see some questions coming on our screens, but maybe the lady should ask us some questions.
Otherwise, I can.
Yeah.
As a reminder, if you wish to register for a question, please press star and one on your telephone.
I will take one question in the meantime, which is on the screen.
I can read it for you, Patrick.
Yeah, if you want.
Okay. Sustainable aviation fuel growth. Aviation, how do you see the challenge of building supply chain and infrastructure for feedstock?
I think we have made an announcement yesterday, and Bernard Pinatel will come back on it tomorrow in New York, but we had to secure the supply of, I would say, animal fats and used cooking oil with a partnership with one of the leading player in Europe, SARIA, the German company, in order to secure the supply to our new plants in Grandpuits to make sustainable aviation fuel. By the way, it's a good agreement. We'll increase the amount of sustainable aviation fuel we'll be able to produce. But that demonstrate, I think this example, one of the, as you said, the challenge.
The challenge is that, when you look to all these, I would say, waste, vegetable waste or biomass waste, I would say, or municipal waste, by the way, in which we will try to find, I would say t he fat, which is required to make the sustainable aviation fuels, have to be collected and all these, I would say, supply chain does not exist very well or we need to increase that, we need to invest in that. It will be in cooperation, I think, between the people who are taking care to do this waste and ourselves in the industry where we are able to build the plants to produce the sustainable aviation fuel. There is a bridge to fill between these two industries. One way we are do it, we'll do it in Grandpuits too, by the way, joint ownership on both sides. Sharing the risk, I would say, on the waste collection side, but also on the SAF production side. It's maybe a model which have to be developed.
Just to show you that it's a real challenge, we make a theoretical exercise within TotalEnergies, which is, I can share with you the result. We see, okay, if we take all the waste coming from animal waste or biomass waste, plus all the municipal waste, and we identify what is the fat in it, and we try to transform all this at a world level, right? You take everything at the world scale, at world level, and you transform that into SAF, only dedicating all this fat coming from waste to SAF, it would represent only half of the sustainable aviation fuel which would be required if we want to decarbonize 100% of the plane fuels. That means that we could cover only 50%.
That's why, by the way, in our scenarios, we introduce e-fuels. Because if you don't go to synthetic fuels in terms of liquids, we don't see how we could fully decarbonize or find a way to decarbonize the fuels for planes. That's an example. I think it represents a challenge because, you know, it will be massive. And obviously our scenario is just something which will not be possible to achieve. But again, that's proof, once again, that we need to diversify really the various sources of energies to go to this decarbonization path to net zero.
There was a second part of the question, which was that will there be limitations on demand? I think it's fair to say that short-term demand for sustainable aviation fuel is higher than supply, and so it's a good market, but.
Yeah, I think that trend exists in many things.
Yeah.
We discussed about gas just before, and the fact that people, transportation gas, they want to decarbonize the gas to go for biogas. We observe it for biofuel. Clearly, you have today, which is good, an accelerated demand compared to the capacity of supply, which will be a strong driver for us to invest. By the way, is a strategy of TotalEnergies is to embark more and more of investments in these new molecules, as I call them. It's because we see this market emerging. They need to continue to have the support from, in particular in Europe and the US as well, with fiscal support in the US or fuel regulation support in Europe. That means that, yes, it's a good incentive to accelerate investments in order to meet the demand.
We might have some years where demand will be constrained by supply, which is good for the price in the economies. Is there another question? I got another one on the screen. Maybe they are all in the plane. They are moving. Alastair is asking you how do you think about the current trend in EU policymakers to shelter consumers from the impact of rising prices? I think that's a very strong lesson for all of us, what is happening this year. Because on the one side, you know, in Glasgow for COP26, there was a huge call in particular for all, from all developed countries' governments to stop subsidies for fossil fuels. That was a huge call.
Even put, raising their finger to other emerging countries, "You must stop subsidizing fossil fuels." Now we face the reality of this transition. You know, we have this strong shock from the Ukrainian war, price increase, and what do we do in other countries? We are entering into heavy subsidies programs for fossil fuels. It's true in many countries. You know why? Because that's, I think, was a big lesson for me. When we say energy is a matter of reliability, security of supply, of sustainability, climate change, and we also add affordability. The reality in this triangle, and more and more after 25 years in this energy, I'm convinced, is the affordability part, which is the tricky point. Which is the most important point. Because energy is at the core of your life.
For a citizen, you know, you need to drive, you need to heat your home. For an industry, it's just a fundamental requirement for industry's economy to develop the economy, you know. Of course, the cost of this energy is just a primary factor of competitiveness, of even allowing people to live normally. That's something we rediscover, and then governments have no other way for the time being to subsidize. Of course, it's contrary to any, I would say, climate-driven policy. It's why some governments begin to be uncomfortable. The reality, it raises a real issue, which is how we'll manage to make this transition by investing. You've seen the figure, we need to double the investments. If we put that in the price of the energy of today, obviously it does not work.
There is another strong message for me behind it, is that we make a mistake today by believing that we must do at the same time increasing investments in the new energies, decarbonized energies, and stopping investments in, I would say, the energy of today, hydrocarbons. We cannot exit as long as we do not build the new system. To try to exit at the same time, what is the result? We lower the investments, which you can see on the chart, which was shown by Helle. We have really driven our investment lower in hydrocarbons from EUR 600-EUR 700 billion to EUR 400-EUR500 billion. We drive because we are asked to exit, so we exit, but then we don't have enough supply to meet the demand, which does not diminish. That's the point on which people.
There are many lessons of this crisis, and I think if policymakers are facing the reality, maybe we should come together to a better dialogue. You need a dialogue between suppliers, customers, country governments, companies, even if the pressure today is quite hard on everybody to try to find solutions. Again, this will not be so easy to find this, to organize and to plan this transition.
If I just circle back to the earlier discussion, again, energy efficiency is absolutely part of the solution. The US or Europe right now put a lot of emphasis on that in addition to the price caps, of course. Saving energy. Yeah.
This one is for you because, Jason, on the screen again, one of the challenges of EV penetration is the availability of rare earth metals and copper. Do you see this as a limiting factor to EV growth?
It's certainly a good question, Jason, and it's for sure a very hot topic, you know, across the board. If I may remind everybody just on a humorous note, when President Trump wanted to visit Denmark towards the end of his tenure, he said, "I'm coming to buy Greenland." Right? That was one of the reasons he had the rare earth metals of Greenland in his mind. The Prime Minister said, it's not for sale, and so he canceled his trip. It is indeed a hot topic, Jason. I think we all need to work on the supply chains. We know that there are available sources of, and resources out there in many countries, and so there can be developed new mines a little bit around the world. We also know that there are bottlenecks, and for certain metals, there is only a handful of countries that have a lot of resources. The picture is mixed, and it's something I think we all need to work more on.
Yeah. I think it's a difficult question, in fact, because I mean, I remember what happened in the solar industry, and we invested in SunPower. We suffered of that, you know? At the beginning of the solar industry, there was a strong belief that there was a problem of scarcity of polysilicon material. I know what we've done. We committed for a 10-year long-term agreement to get to be sure to secure the polysilicon for the wafers, et cetera. It was a huge mistake, and everybody was convinced there was a scarcity. In fact, it was a huge mistake. Why? Because then the volumes means I would say the number of the solar has managed to drive its costs down.
All these polysilicon plants were invested by many people. We saw at a certain point, five years after, price going down. We had our long-term contract, which was higher than the rest of the company out of the money. Obviously, commodity, it's the commodity business. I think that people speak about lithium or things like that. Today, if you take the situation of today, yes, there is not much lithium production, but you don't have so much demand. The demand is coming. All these gigafactories are emerging everywhere. I'm convinced that we'll open the lithium mine and that maybe today lithium is expensive. By the way, it's very expensive. I think it has been multiplied by five or six in the last year.
It will go down again because it's a commodity business. On some very specific, I would say, rare earth metals like cobalt, we begin to find the ways to innovate, to get rid of them, in fact, in the batteries. Your question on copper is more interesting because it could affect not only EVs, by the way, coppers, but even we know electric cables, when you make offshore wind farms, you need a lot of copper. I begin to have some suppliers who told us, "Be careful, we might face a shortage of copper to make all these wind farms that you are ready to invest around the world." That's something on which I will be frank with you.
In TotalEnergies, we need to help to invest to better understand each of these materials. It's very possible that the world, the planet, will go from one dependency, which is oil and gas, and gas in particular this year with Russian gas, to another dependency, which is the another type of material. You know, the planet is round, huh? At the end, everything is limited on the planet. There are some debates how to manage the growth and to shift into this new world.
I'll just add, Patrick, the recycling opportunity, of course, as well, Jason. That's part of what can be done in addition to what Patrick said.
Helle. Well, these are very large questions. Can you discuss challenges in the outlook driven by the Russia-Ukraine war, EU Fit for 55, and Inflation Reduction Act in the US?
But-
Maybe you think during I was answering to the answer, but.
No, what I can do, if it's on the model, because of course if it's.
Yeah, on the model.
A broader question to Patrick, but on the model. In Europe, what I showed you is entirely consistent with Fit for 55. It doesn't quite reach REPowerEU, especially on the power grid. We have not been able to match the very, very ambitious new targets for Europe on renewable power, to be completely transparent, but we are a long way, and we are beyond the Green Deal. On power networks, in the US, we are aligned with the targets for reduced emissions on the power grid, in the IRA of this summer. We are consistent with the Inflation Reduction Act for the US by 2030.
Okay. Oswald is asking a question on the screen. How is Rupture scenario affected by what could be a rupture between the East and West worlds going forward?
I can begin.
Yeah, yeah.
The answer from the model, Patrick.
Yeah, for sure.
You can take over.
No, no. Sure.
More broadly. Oswald, you're right. Rupture is built upon this idea that a lot of countries will be able to follow suit on the Net Zero 2050 countries, and for that they require funding, of course, and support in all kinds of other forms, technology, training and everything else. If the world splits up, the question is, you know, which richer countries will fund the emerging ones in what part of the world? There is a need for transfers from the richer part of the world to the emerging part of the world for Rupture to happen. It goes back to, you know, the $100 billion per annum, and then it goes back to who will fund it.
We know that the Western world has signed up for amounts of money that are not quite there, but the biggest amounts come from the Western world. Then the question is, you know, what will other richer countries do, including China?
Your question, Oswald, is, I think, an excellent one because clearly, as Ella said, you can be in a net zero scenario only if we embark everybody on the same levels for decarbonizations. I don't know if it's 1.7 or 1.5, but you need to embark. If you look only the... The momentum is based on, in fact, the OECD being net zero more or less, plus some additional countries like the EU, but UAE, sorry, but most of them are OECD ones, and the other countries are looking to the, sort of lowering their NDCs, you know, which already are ambitious.
That's true that if you see a divide between the East and the West that we can observe, it will not be good at all to achieve the Paris goals of the Paris Agreement. Let's be very clear. That's something because we could see some people telling us, "Okay, you want to go in that direction, but on our side, we have a growing population. We need low cost energy, and the low cost energy is, by the way, today the answer is coal." You know, what is happening today in these countries in the south or the Global South, not only the east, is that, gas is too expensive, so they go back to coal, which obviously, is not going the right direction.
As Ella said, I think there is no way to make this Paris Agreement objectives becoming reality if we on the Western side do not transfer the $100 billion we promised to them from 2020. I'm afraid we have already missed two years. It's a very important matter. A question about petrochemicals and large circular chemicals. Don't know, can you leave it? Yeah. I will ask it to H elle.
Yes.
Petrochemical and demand for naphtha should have been a key growth area for the oil business, but you have a large circular chemicals assumption. Can you discuss this assumption of large circular chemicals?
What we'll need to give you the data offline because the model is pretty complex on petrochemicals. It's for the six leading polymers, we have curves of decrease of oil demand linked to the increased penetration of recycling, but it's not something that I can easily sum up online. If you really want the data, send me an email, and we will give you the drivers. Indeed, but again, we've tried to do this in a precise way based on the market data we have and what we observe in the different parts of the world where we are present. It's not easy to summarize, but there are curves.
What is clear is that, yes, it's true that we have, I think deliberately, we are a strong believer that, circular chemicals technology will be developed. I see a real acceleration in many. Of course, it's helped by the energy price. You know, we know that, recycling, chemical recycling for polymers requires a higher price of energy. What we observe is that there are many, plants which begin to be developed and invested. Still, I would say a plant is 50,000 tons, which is far from, I would say, what we make for a large polymer plant, which is more 500,000 tons. We see this technology being developed. There is a strong push for the society, to do that.
Maybe we have introduced it, but, to be honest, we have never been so convinced by the future of oil as petrochemicals. Yes, it's part of the market, but it's a limited market, I would say. At the size of the transition, it will not fundamentally change the demand for oil, not in the way that some people were thinking few, I would say five years ago. Who is asking a question? I don't know.
Another question, yeah. In your scenarios, do you assume grid-connected electricity for hydrogen production or standalone dedicated solar and wind projects for hydrogen production? We are more on the second one. I think if, I mean, again, there are different type of what we call hydrogen production. If we want to reach the 300 billion tons which were mentioned in your, I think as an assumption by 2050, that means that fundamentally the hydrogen will find a market for massive production of hydrogen. You know, the key to produce hydrogen will be where do we find the lowest cost of electricity? Is it by making gas plus CCS in the U.S.? Probably.
It could be very competitive, but it will be limited by the resource of gas at a certain point and of carbon storage. Is it by identifying some very strong wind and solar areas like in Oman or in some areas or in India, in order to dedicate some of these renewable resource to hydrogen production? That will be a question. The connection to grid, of course, help to, I would say, have a higher utilization rate of the electrolyzers, which is quite good, quite important in lowering the cost of the hydrogen. It could be a solution when the grid will be decarbonized itself. Otherwise, you know you're just mixing that. At this stage, I would say, it's both ways.
Our models are not precise enough, I would say, to answer precisely to your question. What we try to do is to translate the hydrogen production, the green hydrogen production into electricity demand. You've seen that it's 10%-15% higher demand, which is on top of 18% exactly in Rupture, which is on top of the increase of capacity of electricity just to meet the electrification of the demand. That's why this scenario around hydrogen are really raising huge questions. You know, there is a debate, for example, in France to make hydrogen between France and Germany. Do we make hydrogen from nuclear or not?
The question for France is first to make more power from nuclear before to be able to dedicate some capacity, nuclear capacity, to make hydrogen. This debate seems to be a little on the second stage. The first stage is first, let's have the decarbonized power to really provide the electricity that the economy will require. Again, it's already a challenge to double it compared to what we have today. Hydrogen is adding another level of complexity and of demand, which might somewhere be a question mark for the world transition, in fact. A question about products from Kim. I think the cost of. Hello, Kim.
There's a question here on, do we close the loop in the.
Ask...
Yeah.
Repeat the question.
The cost of decarbonized materials such as net zero steel, net zero aluminum, cement is expected to be much higher than conventional materials. Is this inevitable increase in cost, did we factor that into our forecasts when we did the dollar quantification of the investments needed? The short answer is no. But in our forecast, we looked at quantities from the model, and then we applied estimated costs, Kim, and we did that as best we could. I'm not sure we closed the loop on the fact that steel would be more costly over time. But on the other hand, we might, you know, have done it without having that as a purpose. It depends on the curves that we've used for the maturity of new technologies and then the decline in unit cost.
What is true is that behind your question, Kim, and I think this is what you write about, right, is that there is something wrong to believe that we can continue to lower the cost of solar and wind indefinitely. You know, I think we have reached maybe a historic low. By the way, we see the cost going up because of supply chain. It's true that at the end of the day, if we need to use net zero steel, net zero aluminum to build these plants, the cost will increase. I think there is something which we need to. This is why, by the way, when we said about what could be the cost of the transition, you know, Helle was cautious. He said it's rough figure.
You know, I'm not sure we are right with our $1.5 or $3 trillion dollar figures. The message is we need compared to what we spend today, which is in the range of $1-$1.5 trillion, we need at least to double that, you know. That's the cost, and the source of the cost will be various ones. This one that you raised might be one of it.
The broader element here is that the transition is by definition inflationary. You're right on that too, Kim. Again, I have a kind of visual picture in my mind of the cost curves that we have used in the model, and as Patrick said, only rough numbers, but we are not in the camp of those saying that the wind and solar costs nothing, and that cost will continue to decrease at the same speed in the next 20 years as what we've seen in the previous 20 years. There is clearly going to be a floor, and it's factored into the numbers we showed you.
There is another question which is interesting.
Yeah.
From Alessandro.
Mm.
Does Energy Outlook point to higher oil demand in 2030 for light vehicles in 2030 compared to 2021? Can you explain? I think it's right.
The answer is yes. Two reasons for that. The first one is that we're starting off with a higher demand than what we had last year because 2021 was, you know, extremely high in terms of demand for oil and the beginning of 2022 as well. We have starting from a higher first initial point. The second reason is that we have slightly changed our assumptions for existing fleets, and we have allowed for the existing fleet of passenger cars to last a little longer. When you extend the lifetime of a thermal car, then you extend the use of oil. We've done that based on what we have observed, so real data over the last three years compared to the assumptions we had last year.
I think that even if media loves to title that EVs represent 20% or 20 or 25% of, say, new car sales in our countries, there are still 75%. You know, there are many countries where EV is not deployed. So you still have, I would say, a global fleet which is increasing, in fact.
Yeah.
Yes, it's true that in 2030. The percentage of penetration in absolute terms of EV will not be so high. Oil will still be used for EVs, I would say.
That's the main reason extending the lifespan of existing passenger cars because of what we have observed, and we didn't have that data last year. Other than that, I would say we have not taken a complete ban on the thermal car sales in the U.S. in 2035. We've only taken it in the states that have committed or already indicated that they would implement it. It's roughly a little less than half of the U.S. states.
Okay. EV would represent in our scenario, I don't know if it's Rupture or Momentum, 10% of the global world fleet if I hear.
The other meaningful changes to oil demand, Alessandro, is that we have electrified heavy duty more than last year. I'll try to explain that. As Patrick also mentioned, we have changed the assumptions for gas in road transport. That would be that.
Great. I understand from the screen, I don't know if we don't, but we have no more questions. I would like to thank you for your attendance this afternoon. 1 hour 30 minutes was not too long, this presentation. A lot of information was delivered, of course, by Helle. You have to absorb that. I think it's a good introduction to our meetings tomorrow. We'll be with all the executive committee in New York, and we'll have opportunities, of course, to answer to more questions tomorrow. Of course, the objective being to speak about, I would say, a shorter term, but all this vision of demand, of course, is driving part of a strategy of Total moving to TotalEnergies. It's important to year after year monitor that.
I will tell you, in the world of energy, sometimes we have the impression it's moving targets, you know, or moving markets. Having said that, there are some trends, and I think I hope we have given today another contribution to, as I said in my introduction, the energy dialogue. COP27 will be once again, maybe probably in a different mood than it was in Glasgow. I think security of supply, sustainability, affordability will be at the core probably of the debate, but it's also a way to progress in the transition. Thank you again to all the teams who have contributed to this study and this report that we published today. See you tomorrow to discuss about TotalEnergies' strategy and outlook. Thank you.
Thank you. Bye.