Good morning, if you are joining us from the Americas. For the ones who are present today in London, we hope that you had a nice lunch. We are delighted to welcome you to TotalEnergies Strategy, Sustainability and Climate Investor Day 2023. We are today, as I was saying, in London. Last time it was in 2019, long time ago. Before detailing the program of the afternoon, I invite Ian from the security of the hotel to join me for the safety instructions. Thank you.
Good afternoon, ladies and gentlemen. My name is Ian, I'm the security manager. I'd just like to give you a quick safety briefing. In the event of a fire alarm, there is nothing planned for today, so please try not to start anything. In the event that the alarm sounds, we have three exits in here, two there that lead down to the lobby, and 1 at the side that leads down to an external fire escape. Once you get down during the fire alarm, yellow high-vis marshals will be on hand to show you to the assembly point which is on the pavement opposite the front of the hotel. Please make your way onto the pavement as soon as possible. We'll look after you. If you get there and you discover that 1 of your party is not here, then please tell a fire marshal.
They'll instruct a fire party, moi, to go looking for them. Okay? Please, everybody get down there. Yeah? I get lost in this hotel. Any questions? Thank you very much. Enjoy your day.
Thank you, Ian. Appreciate it. The program for today will be structured in two sessions. First, we'll have Patrick and Helle who will be presenting the strategy and climate updates and progresses. We'll have then after those two presentations, we'll have a Q&A sessions. Live session, you will be able to ask any question you want. Then we'll be moving to the second part of the afternoon, where Helle, Namita, and Jean-Pierre will focus on the key elements of our sustainability model and all the various aspects from financial resilience to biodiversity or people. Then we'll have again a short Q&A. For now, I invite Patrick on the floor for a sustainability moment.
Yeah. First of all, welcome to you, everybody. Before to make the sustainability moment. No, I didn't put - o kay. They do it for me. In TotalEnergies, we are, we have decided, you know, to that every morning, when the first meeting, there is a safety moment. Since last year, we introduced another ritual because corporations work with rituals if you want to change the culture. That every afternoon meeting begin with a sustainable moment. I will do it myself because, and by the way, to introduce today, to you, it's an opportunity, our new program, which is called Sustainab'ALL, which is a program on which has been built from a bottom-up approach by during the year 2022, by your colleagues in the group, in the company.
27,000 colleagues worked on this program, so it's clearly a bottom-up approach. The question we asked them at the beginning of last year was: what does it mean, the SDGs? What do they mean for us, for TotalEnergies? The idea being to put in place some specific KPIs or thematics on which we want to work collectively in order to progress. Linked to business, that means that embedding sustainable development goals into our strategy or projects or operation or businesses. At the end came 10 KPIs. I will not describe that to you. It's continuing to be a bottom-up approach because each site, each subsidiary has to decide for themselves a target or goal, I would say, for 2023-2025 to progress on each of these thematics.
More importantly in my eyes, they have to come back each year with a success story. We'll make the collection of the success stories of sustainability within the company, and I hope that it will fed the next sustainability and climate report. The idea is being to celebrate it, to introduce, to go in deep in the culture, and also, by the way, to have a cross-fertilizations, because many ideas could come from one business. Large corporations could give ideas to the others. That's our Sustainab'ALL programs. Of course, in the program, we speak about energy, and we want to be ourself for our own operation at the forefront, consuming low carbon energies, engaging our suppliers, innovating in low carbon energies. It's about our people. It's about the natural resource that we should preserve, and it's about sharing value.
It's exactly the program that we will today, this afternoon on which we'll come back to you. Again, you know, we have a structure of meetings with investors we changed last year. In February, for the time being, we celebrate our results of the previous year, financial results, and we give you the financial objectives for the next year. We've done that beginning of February. In March, because there is a board involvement, we issue today our climate and sustainability report, which will be the base of the resolution to the general assembly of shareholders. We have committed since 2021 that each year we will report on the progress, and we will also update our objectives year after year in order to be better on the sustainability and climate commitments.
This is why we come today. We come today to report to you. Of course, and it will be my presentation, all that is supported by the strategy of the company. The strategy of the company is fundamentally described to you deeply in September. Today I will not come back again. We don't change the strategy of the company. We stay the course. Everybody make no U-turn. We know. You will not hear anything new. You know, I think we are in an energy business, which is long-term business. When you have a strategy, if you want to deliver profitability, it has to be consistent for many years. You can adapt, but not fundamentally change.
We'll come back on to what we are doing within TotalEnergies, which is building a multi-energy company, which we think is really, and 2022 has reinforced this conviction. I will set the scene about the strategy, reminding you the fundamentals, which of course, are the core of all progress and achievements we do in terms of climate, in terms of people, in terms of sustainability. This is the fundamental idea of this part. Helle will go deep, will make the climate report, and will update the targets. You will see that all that being validated by the board again, which worked a full day on all these topics last week. Then we'll have a Q&A, like you said. Don't worry, Jean-Pierre, Namita, and Helle will not make 20 slides then.
It's four or five slides just to zoom on some specific aspects which might be of interest for some of you. The second part will be a little shorter. Having said that, I will go into the presentation. Of course, our purpose, and I think it's important, is more energy, less emissions. The whole company is driven by the idea that we are an important player in that field, but our mission is to deliver, to supply energy as to as many people as possible. There are a lot of population in the world is growing. level of they want, they aspire all of them legitimately to a better way of life, so more energy. This is what we observe for the last 20 years.
We observe year after year, we need to provide more energy. Of course, this is, the world challenge of the energy transition, we need to dramatically lower the emissions. On both ways, on the one side, to change the way in which we produce hydrocarbons. We can produce hydrocarbon with a much lower Scope 1 and 2. This is a primary responsibility of our company being involved in oil and gas. Also to contribute to the transition by investing in the new, decarbonized energy system. This is the other pillar of our strategy. All that with being always more sustainable. Let's be clear, the ultimate objective is to continue to grow in order to develop our returns, to increase our returns, and to increase our returns to shareholders.
This strategy is driven by some demand fundamentals that you all know in the room. This is, I think, just to remind the idea that the strategy of the company is not driven by supply, it's driven by demand. Demand, of course, of oil. There is still a growing demand for oil, even if at the same time, we see some acceleration of innovation to substitute oil use, like of course, EVs in transportations or batteries more generally, but maybe tomorrow, hydrogen, EV for sure. Vision is that the demand for the time being still grow, but could plateau, then decline. We have to keep that in mind and in order to manage our oil portfolio, keeping as well the optionality, because the timing of all that is not very clear.
You know, one of the uncertainty in all this transition, energy transition is the pace at which the demand of the various actual components of the energy world will move. Of course, another point is that oil might be substituted also by low carbon liquids like biofuels, already done partly, or eF uels tomorrow. We have the natural gas, which for us, because electricity is at the core of the transition and because renewables are intermittent, you need to have flexible generation capacities. Gas is one way to offer this necessary flexibility. We see, from this perspective, back out coal and complement of intermittent renewables is a fundamental contribution, I would say, to this transition. Driving the growth for LNG, we are large players of LNG.
We intend to continue to grow and develop that business, because we see in many emerging countries, we've of course, the, the challenges of the price of energy price, but we see there a transition going from coal to gas as being very pragmatic. Of course, there may be some alternative gases like biomethane or hydrogen in the future. The last part of, and it's why Total became TotalEnergies is the electricity, which is the third pillar of the strategy, which is, and you will hear more and more us speaking about integrated power, as, you know, we report on integrated power from next quarter. The demand is growing, decarbonization is growing, in hand with a higher demand for electricity. Renewables, of course, are one way to decarbonize this power generation.
We should not forget electricity storage as well, which is part of the transition. This is the third of the market that we want to address in our strategy. This slide is easy to do and to introduce the whole speech this afternoon because in fact, you know, I hear some voices from investors. Yes, you are investing in green, but green is less profitable, and you do it for not the right reason. We do it for a good reason, and I think a very good reason, which is to fundamentally prepare the future of our company, to create the future growth, revenue growth of the company. What we have demonstrated in 2022 and the last years on this slide is on one side, we have been in 2022, the most profitable major.
We have now the figures of all our peers. It's true in terms of ROACE. At 28.2%, we are the top of the leaderboard. It's also true, which is more important for our investors, in net cash flow per share growth. Which means, by the way, that TotalEnergies is a company which when we have higher energy price is reactive to the price. We don't have always that reputation, but part of what we've done since 2015, which is to lower the break even to less than $25 per barrel. Of course, when price is high, it's good. We benefit much more of it.
At the same time, this is a green part of the slide, we have invested $15 billion in the last, 6 years in low carbon energies. Last year alone, $4 billion. This year, $5 billion. Now we are at the pace at which we will maintain for the next years. We'll see in the presentation. We have, in our portfolio, grow our renewable capacity up to 17 gigawatts of growth capacity, which is by far the largest portfolio within the major company. I think my message is, yes, it's absolutely achievable and we'll achieve it. It's our commitment to continue to deliver profits and high profits and to be profitable and the most profitable, while also at the same time preparing the future and investing in these new and low carbon energies, low carbon electricity, low carbon molecules.
Of course, the best demonstration will be through our cash allocations. You investors, you know. Before to speak about climate and low carbon energies, that's the reality. That's the reality check. Again, I'm just repeating that what we've announced you in September and February, and this scheme will come back. Priority is given by the board to dividend, to sustainable ordinary dividend through cycles. We never cut the dividend for last 35 years, so we'll continue. It was a commitment when I became CEO. I stick to the commitment, including in 2020. We will support a dividend increase by share buybacks when we do it, and by more fundamentally by the underlying cash flow growth of our revenues.
We are at a pace of an additional $1 billion per year. The board will then decide how much of the $1 billion we'll allocate to dividend, ordinary dividend, in order to have again a sustainable ordinary dividends. For 2023, we have announced an increase of more than 7% of our interim dividends. We have the CapEx. We support our multi energy strategy, both on hydrocarbon on one side, on low carbon energies. I will come back in a specific slide on these $14 billion-$18 billion. For 2023, it's $16 billion, $18 billion and $5 billion low carbon energies. The balance sheet, that's the good news of 2022. Now my CFO can rest, but he does not rest, I can tell you. We keep him awake.
We have, of course, the target has been always said that through cycles, we want to remain a credit grade A credit rating. We have today set a new target to target a double A credit rating, and we have, in fact, all the metrics, when it's a rating agency to decide, but we have all the metrics and our balance sheet would continue to strengthen it. When we might have some surplus cash flows, like it was the case in 22, which will be the case in 23, when we have allocated 1 and 2. What do we do with it? We do it through, we'll share it through buybacks or like we've done in 22 through special dividend in case of very high prices that we experienced last year.
For 2023, our board have decided, is a board which is going step by step, we have decided to buy back $4 billion for the first half of 2023. Keeping the pace, I would say, of the second half of 2022, despite the fact that the price environment is lower, but we have the capacity to maintain, and we'll see, if we can, in the second half of the year, according to the environment, what we have to be done. At the end, the main commitment we've taken in total and which proves the profitability is that we will, we have a cash payout through the cycle of 35%-40% stand up. Could be higher, but it's 35%-40%, which has been a step forward for our shareholders. Last year, we delivered 37%.
The strategy is designed to again build this multi-energy company. This chart explain you what we want to achieve in terms of production, in terms of sales. On the production side, we are again growing. We are targeting to grow our production capacities, production deliveries by 4% per year, mainly coming from two, I would say molecule, from two energies, natural gas, LNG, and the electricity part. On the oil side, which represent today more or less 55% of our production, we will maintain this share, could grow, I would say marginally but maintaining, again don't forget that we have a natural decline of around 4% in our portfolio, so we need to add new field, new greenfields to, just to maintain. It's a challenge to do it.
To if we have opportunities, we could do more, but that's the point, that's the target. On the natural gas, more aggressive in particular LNG and growing the share of natural gas in our production from keeping it 40% but in a larger company in fact. Then we have this third pillar, which will be which will grow. We're at 5% of our production. Next year should be around 10% and growing to 20% by the end of the decade. On the sales, we have, I would say, a different pattern. Why? Because the answer to the uncertainty of the oil decline for us is more integration between upstream and downstream. Today we are a company. We sell and we refine more than we produce.
We have decided that we speak about integrated at the core of the model. Let's do it in order not to be, to have another to sell more than what we produce or to refine more. This is the idea is to answer to a potential evolution of the market because at the same time, part of the sales are for transportation. If you have, and I will come back to that in the presentation, you have more EVs, you will need less petroleum products. The petroleum products, there is an alignment, so we'll go down to 30%. Gas, we have a position. There is a core position where on the top of what we produce, we can market more, we can leverage our global footprint.
We target 50% of our sales, and electricity will be consistent. The idea, again, on integrated power, it's integrated is the right word, to have as much as production as sales and not to be, so to do it as we said. That's the fundamental target we have. On the top of it, you can have the low carbon molecules which could, which will grow. For this decade, we see that as more a starting decade because the question is to develop this market for molecules which generally are more expensive than their competitors. We need to find some markets and also the limitation is coming. I will come back on it sometimes on the feedstock to be able to produce these molecules.
This strategy is supported through the decade with a capital investment, I don't know if policy is the right word, but policy. It's $14 billion-$18 billion full cycle. What does it mean? It's $14 billion-$16 billion at $50. It's $16 billion-$18 billion at I would say $80. We navigate. It's a disciplined one. What you see on this chart is that in fact we can see that we have one third going to low carbon energies as an average. More on the integrated power, but the pace we have reached last year at $4 billion per year is for us the right pace to go to build this integrated power business. Low more carbon molecules could grow a little.
We have gas, which represent 20-25% of our CapEx and the oil, the remaining 45% more or less. We have identified for those who are asking us generally the questions that 30% of our CapEx are going to new projects in oil and gas. It's including exploration but it's greenfield projects. It's new LNG plants. It's 33% on low carbon energy projects, 30% of new hydrocarbon projects, and the remaining part, which is more or less 35% on maintenance of our existing assets, because we have to maintain them in refining, in marketing, in upstream as well, and it requires some capital. That's, I think, an important slide.
You see that it's, of course, aligned with the strategy to grow, to increase these low carbon energies in our portfolio, but also keeping at the same time, optionalities in order to be able to answer to the demand on our oil and gas businesses and aggressively on LNG. A word about upstream oil. Upstream oil in our strategy is there is two motto, I would say. One is low cost, the other is low emissions. When we invest in new projects, we have some criteria which will be reminded to you on another slide, which are less than $20 per barrel and less than 19 kilogram per barrel because we have an algorithm when we want each new project to be lower than the average of the company, and the company is lowering.
It was 20, now it's 19. The new target is less than 19. We apply these criteria to any new investments. We find new investments, very good ones. We have a large portfolio of new projects on these ones which respect these criteria. These criteria, of course, are there in order on one side to maintain the cash engine of the company, on the other side not to be able to say, "No, there is absolutely no stranded asset in this portfolio." I will show you why I said that. We have some important projects in construction in Brazil, two projects to FID this year in Brazil, in Angola. We have a portfolio.
You have observed that in the last month since we met in February, we have announced a new oil, low cost oil acquisition in Abu Dhabi. Quite happy to have access to this new concession. It's $4 per barrel of access cost. It's less than $5 production cost. All that is very good. It's long-term. We have also options in our portfolio coming, that's the good news for TotalEnergies coming from exploration. Cost of access is quite low. The first good news I can confirm is on Suriname. We had a program of reappraisal wells. The first 2 wells are positive. I think we are probably not far to be able to move to a very near, to move to an oil development in Suriname.
We have Namibia where I explained to you in February that we'll spend $300 million this year through three wells, three DSTs. We'll have all the static and dynamic data to tell the story and to be able to see with the idea that if it's as good as my explorers are telling me, we could move quickly. Time to market is of essence. I have in mind the model of Block XVII. When I joined the company, I was lucky, I joined it in Block XVII. We discovered in 1997, we put into production in 2000. It's okay or not? Yes?
Okay. Good. Sorry for the interruption. There was an issue with the sound here in the room in London. No technical problem. It's done. It's okay. I continue. I do it again at that stage of the presentation where I think we have been stopped. I was just demonstrating with slides that the resilience of the oil portfolio of TotalEnergies, which we position again with a low break-even and low cost, less than $20 per barrel. We have evaluated our portfolio, compared by comparing it to what could be the demand for oil according to the various scenario of IEA. I have the NZE scenario at 1.5, the APS at 1.7, or the steps at 2.5.
You can see that, or in the cost merit curve of the oil production, our portfolio is positioned in the top on the first 50 million barrel oil per day. It's clearly safe. In particular, it is the case because we benefit from quite a number of long plateau assets in our portfolio in the Middle East. You know, I often said that the last drop of oil will be produced there. Positioning the company in these countries is a way to protect the portfolio and to be able to continue to maintain the cash engine of this portfolio. On the oil, last part of the strategy is the oil downstream integration that I mentioned in the vision we share. Again, we want to have - this is not because of Scope 3, and there are more fundamentals behind it.
The fundamentals is not a Scope 3. Scope 3 is a result of it. The fundamentals, again all that is driven by the markets. The analysis is that oil downstream is quite exposed to Europe. Europe is, for us, an opportunity because we are at the forefront of the Green Deal and the transition, but it's also a constraint. You know, when you have refineries in Europe, if you wait for the last minute to transform them, I can tell you it's a lot of social impact. It's not the right way. We need to anticipate the evolution of the demand in Europe.
We strongly believe that Europe will do what they have announced in terms of transitioning their oil energy. I think it's even reinforced by this war with Russia. We need to prepare in refining by transforming one after one oil refineries in biorefineries. We have done it by with two. We will have to do it with others. Diminishing or refining exposure to oil products is a must, otherwise we'll not be ready. By the way, this is I would say, the constraint part. There is a positive part, which is the opportunities part. We transform, we are able now to be among the leaders of the sustainable aviation fuel businesses. It's another way to look at it. There is a negative part, there is a positive part.
In Grandpuits, and of course, the conditions to be a leader is to find a feedstock. It's different feedstock. we are becoming a good expert to find the waste and the, I mean, different type of waste in order to be able to convert them in biofuels. That's an opportunity. we do the same, and this is an explanation of what we just announced, on European retail. It's very clear to us that, you know, our retail networks will not be very useful when you go to EVs. The EV customers will charge its cars either at home or at the office, like you do with your iPhone. we think that 70% of the market will be there.
The situation with a network offering a charging point is not very obvious. It works very well on highways, on where people are making long drive, but on short drives in cities, it's not true. We have to think about it, and that means that the best way is that this network has to be transformed, I would say, like other of my PSAs, more about thinking about shops, network of shops than network of retail stations. We took the decision, but we are not experts in making a network of shops, to be honest. We are good in energy and ready to look to diversification in energy, not in selling shops, bread or hot dogs, or I don't know whatever things. It's not our business. We had to think to that sale.
The idea is to partner with people who knows about it. We have announced that we will partner with Couche-Tard in Belgium and Luxembourg, where we have a large market share. Again, the concept is to have a network of shops with some gasoline pumps and not some retail station with a shop, an annex in a shop. You know, it's reversing the concept. These guys have a lot of experience. They have demonstrated it. We have said yes for this partnership. We are looking for. They propose us to acquire our business in Germany and Netherlands, where we have a limited market share and where, because by the way, the valuation was good, we decided that it was part of the transition that we will do.
Again, in Europe, there will be an accelerated transition. There is hope for, of course, in that it's a constraint on our oil products network. It's an opportunity because we, on the same time, with our marketing division, we accelerate to take positions on the EV charging where it makes sense. Either, again, it makes sense for us in 2 segments. One of them is highways, motorways, where today in France, we have taken 40% of the market share of all the motorways of France to acquire the concessions. It's done. We are building that. high charging points because we see the business there. We will do it as well more on a B2B segment.
We think that there is in cities on electric hubs, EV hubs, a market for taxis, for, I would say, professionals who want to charge during the day who are using their cars. We'll develop some specific EV charging hubs. It's a different approach, but we are willing to move. We'll also develop for trucks, some pan-European networks dedicated to trucks like we have today, one for oil, for diesel, which is called AS24, which is going from Poland to Portugal. We'll develop one for EV trucks and another one will be announced this last months with Air Liquide for hydrogen, should hydrogen become one of the fuel for EV duty. That's, I would say, what we are looking through behind this slide.
At the end, reintegration, integration of our oil business. Again, we'll be stronger by being integrated in case of evolution of the demand and supply. That's a strategic view. Taking opportunities of this change in transportation businesses, but also accepting to do it, to anticipate the evolution of the demand during these next 10 years. LNG, we not repeat to you what you know very well about TotalEnergies. We are the number three in the world. We are quite, we have grown a lot. We were at less than 20 million tons in 2015. Today, last year, we sold 48 million tons. We have some growth in front of us coming from Qatar, where we have acquired this to position from the U.S.
PNG, some news came in the last month as we have agreed with all the Exxon and Santos to launch the integrated FEED with an optimized scheme. We have worked strongly with them. We are very aligned. It's optimized in the sense of cost. It's also low carbon projects because on the upstream, we will reinject in the reservoir the CO2. The downstream, we have selected an electrical driven train scheme. We have small trains for 4 times 1 million tons per year. We have also integrated that between PNG and Papua in order to optimize the capacities, as Papua LNG will have access to 2 million tons of capacity of PNG. It's optimized, it's very well located, everything now is green to go to FID end of the year, beginning of next year, probably.
On Mozambique, you know that we are working in order to see, to check if conditions are there to restart. The security, as I told you in February, I visited the site, is today acceptable. We are making a review with some expert on the human rights part. We have some feedbacks. One of the idea is that Mozambique LNG project must be involved right now, from today. We have already started, but in a larger way in sharing the prosperity that will come when the production will come in 5 years, but we must engage with all the population.
We have already started with 4,000 people on which we bring some, I would say, revenues, but we should do it in a larger way in the region in order to share the prosperity with them now and not to wait revenues from gas, in order to have supporters allies in these, in these Mozambique part. I think this is a good lesson that we draw from the reports we will put into action in the coming months. We'll come back on it. The last condition in Mozambique is that our contractors stick to the EPC contracts and not to inflate the costs, otherwise we can wait longer. Integrated power is a third pillar of what I described, oil, LNG, integrated power. You will get the results next month of April.
We are. Why integrated is an important word because it's renewable. Of course, we need to have production capacities, and the production will be renewables. Renewables are also intermittent, so we need to have flexible generation as well to produce it from CCGTs. We have some objectives that we set to ourselves by 2030. This is consistent with the idea that this business will represent 15%-20% of the energy produced and sold in the company. In fact, we need to reach this level. We are on this path. Storage, of course, to manage the intermittency. Storage is going also with trading, because we know that in this business, electricity is a volatile commodity, hourly one, daily one, so we can optimize all that. We need to have the assets to optimize.
Traders do nothing if they don't have the assets to manage, I would say, the exposure to, of the producing capacity to the market. That's the idea. Then we have customers. More or less the idea behind again, integration. We don't have to have more customers than producing capacities because otherwise you are export-exposed to spot markets and that's not very profitable like always. T his business has to be designed and to deliver a ROACE above 10%. You will be able to see quarter after quarter if we are there. My view is that maybe we'll have a, we'll be higher than that on the 1st quarter from 2023. You will, we will demonstrate to you that you can develop this business. It's for Stéphane, who is in the room.
I know the results of the first two months, so it's not too bad, too much a big challenge for him. No, but we want really to demonstrate that yes, this can be again a business which makes sense in the portfolio of the company. If we are able to deliver such ROACE being yet in a growing mode and building the business, when we'll stabilize all that being, reaching our objective, I think it could be even better. That's what we are willing to deliver to our shareholders. I spoke about low carbon energy, so the low carbon molecules. Biofuels, I mentioned that we are with biorefineries conversion well-positioned to, in Europe in particular. Biogas, you have noticed that we made some steps.
We are doing local stees, not billion steps, 100 million steps in France, in the US, in Poland, because we strongly believe that if you want to be good in this business, it's access to feedstock. Access to and permitting. Access to feedstock is understanding very well the local ecosystem in terms of farming ecosystem or waste ecosystem. You don't transfer that from one country to the other one. It's more complex than that. The technology is not rocket science. We are willing to develop with the business, but by making acquisition, local acquisition one by one. We acquired the number one in France, now we have acquired the number one in Poland, and we'll continue to do it like that.
Biopolymers, recycling is important in our circular economy for, from polymers for the business on which our chemical division invest. A word about CCS, carbon capture and storage. We are targeting 10 million ton per year by 2030. It's for our emissions. It's also for emissions of our customers. We want to develop that as well as a service. Europe is at the core of our, I would say our strategy. Why? We have a position in North Sea. It's next to that. Europe again, with the Green Deal, had to develop the CCS. There is a news which came this week or last week, an important news in the Net-Zero Industry Act. There is a target of 50 million tons per year of CCS.
Each producer of oil and gas having its share of the burden. For TotalEnergies should present 3% or 4% because we are not so much, so big producer in the EU. We produce in Norway and the UK, but it's not in the EU. We produce today in the Netherlands. It's for me, the signal is important, but it's a recognition that this CCS is necessary to go to the net zero. There were some debates. We have some projects. One project in Norway, one in Denmark, which just acquired the license. We have a large, of course, presence there. One in Aramis in Netherlands with, together with Shell, where we share infrastructure, and one in the UK.
We are looking as well to more CCS, but more linked to our assets, I would say, which could offer capacities to others. The fundamental strategy is more linked to our assets. In the U.S., it's linked to Cameron LNG, where we have a potential CO2 storage right next to the plant, so quite easy when we'll expand. On Qatar, developed by QatarEnergy. In Asia, we have just took some license with INPEX and Woodside to create a storage around Ichthys to store the CO2 and PNG, I describe it. That's our deployment step after step in CCS. I conclude this presentation again by telling you that, yes, it's possible to combine, to be profitable and to invest in a large way for the future.
This is what we do. Today, in fact, we have a balanced strategy in our multi-energy strategy. On one side, we continue, because it's our mission, to deliver and to deliver in a large way the what we call the system A of which is the today's energies, oil and gas, fundamentally. Maintaining oil production, developing optionalities again, in for the future, according to the evolution of the demand. We'll see at what pace the transition will take place. Integrating our business in order to be safe from the downstream point of view. LNG is, and we still believe, gas is part of the transition. We continue to be aggressive in LNG. At the same time, we build, contribute to the building of the system B, which is low carbon energy system we all need.
By integrated power, I just described it to you what we want to do. The idea is to capture value from the volatility in this market by leveraging our global footprint, our balancing, our projects management capacities. On the low marker carbon molecules for this decade, we want to position ourselves in these potentially high markets and attractive high value and attractive markets. Keeping our pace of development with the demand, I mean, trying to match what we see as a demand. There are obvious markets where there is a good demand already today, like biogas, like sustainable aviation fuels. There are others which need to be developed and on which we will adapt the pace of our investments to what we want to do.
I didn't say a word on hydrogen, and I know that some of you are interested. It's not because we don't like it's just because I miss it in this busy slide on the calls right, left bottom corner. In fact, TotalEnergies, we have a short of 500,000 tons in Europe in our refining system. Europe is offering a good idea in their complex regulation to valorize green hydrogen in refineries.
We are looking primarily to do that, which is because we not only we can use green hydrogen as a feedstock, as we do it today, to replace the gray hydrogen, but we can also displace some hydrogen which is produced today from reformers and our crackers, which could be replaced by green hydrogen, become a fuel instead of natural gas, so less emissions and more revenues. There is 500,000 tons, which is sizable. We look to see how we can monetize and use this this short in order to develop some projects upstream. Of course, as many companies, we are looking today to the U.S. to see how we could develop one or two projects with the benefit of the fiscal incentive of the IRA in the U.S.
That's, I would say for me, what I wanted to tell you about our model, I think, to set the scene. Helen will explain to you how do you translate all that in greenhouse gas emissions and what target we set to ourselves. Thank you.
Thanks, Patrick, and hello, everyone. Follow on to Patrick's summary of our strategy. I will give you an update on our climate roadmap, showing the progress we make on less emissions. The takeaway from my charts is actually gonna be that we are indeed transforming into a multi-energy company. You can see that also from our climate realizations. At the same time, our efforts to produce hydrocarbons in a much more responsible way are also paying off for sure. First, a good summary chart that Patrick pre-announced on both the actuals for our emissions in 2022 and the update on our targets. All the new stuff is in red.
For memory, our reference here is 2015, except for methane, where we use 2020 as all the countries from the Glasgow Methane Pledge. Two reasons, really, why we have updated our targets. First thing we promised last year to all of you, our investors, that we would quantify milestones for 2025 across the table. We've done that. The second reason goes back to what Patrick just said. The pace of evolution of our transformation and our portfolio is quicker than what we had in mind a couple of years ago, it only seemed fair to then update some of these targets. Let me start with our direct emissions from our operated activities, Scope 1 and 2 and methane.
Starting with Scope 1 and 2, you can see here that our Scope 1 and 2 emissions for 2022 were 40 million tons. That's a 13% reduction versus 2015. Bear in mind, of course, that in 2015, we did not have all the gas-fired power plants that we've added to our portfolio since then because of our strategy. We count them in, of course, but I'll show you a little later that if we just carve out oil and gas, the reduction between today and 2015 is much higher, so we've improved much more on oil and gas assets only. We've kept our target for 2030 unchanged from last year. Forty percent or more reduction versus 2015 net.
We showed you last year, and I'll come back to that as well, that this is well-calibrated versus all the external benchmarks that are relevant for our direct emissions. On the other hand, you can see that we've changed 2025, so moving it from less than 40 to 38 million tons. The reason for that is, if you remember, we announced an energy efficiency program back in September of $1 billion over 2023 and 2024. During the bottom-up exercise, we found that the expectation from that program is that we will save energy, we'll save money, but we'll also save CO2. The order of magnitude is 2 million tons, so we have essentially lowered 2025 by those 2 million. It's a question of accountability internally and then also towards you as our investors.
On methane, we are executing our roadmaps towards zero methane. You see the results here for 2022. I just wanna remind you that when we have a target of reducing methane by 50% 2025 and 80% in 2030, we go way beyond the 150 countries that have now signed up for the Global Methane Pledge. They have signed up for -30% in 2030. Of course, our industry is one of the contributors to methane emissions, it's only fair that we should do more than average, we are way above the country pledges here. Continuing to execute on methane.
Then on indirect emissions, the emissions from our energy products when they're used by our customers, so the famous Scope 3, Category 11, we have essentially three targets, three sets of targets. The first one is lifecycle carbon intensity of our sales, and we've reduced that by 12% in 2022 versus 2015 still. Given that result, we have decided to be more aggressive for the years 2025 and 2030, as you can see. We've upgraded or strengthened the carbon intensity targets above 10% reduction to above 15% reduction in 2025, and from above 20 to above 25% in 2030.
It may look easy on paper, it's just a PowerPoint but I can tell you that reaching -25 for 2030 means that we will have to continue to execute properly our transformation strategy, otherwise we will not get there. Be assured that we will do it. That's carbon intensity, first indicator. Second one is, worldwide, Scope 3 for our oil sales. That's a new indicator if you remember, that we came out with last year. You have the actuals for 2022, so that's 254 million tons of CO2, Scope 3 oil. Here again, we have decided to strengthen the objectives going forward. We've added a new objective for 2025, which is effectively moving up the objective we have for 2030.
We've moved that up by five years, and the new target for 2030 is -40% Scope 3 oil worldwide. Pretty clear, but also stringent targets. The last indicator is Scope 3 world worldwide for all our energy products. Actuals 389 million tons for 2022. For this indicator, we are sticking to what I told you earlier. It's not gonna go down because oil will go down, as I just described, but at the same time, our gas sales are gonna go up. We stick to the ceiling, which is we will not go above 400 million tons, and I'll come back and give you a little more color on that a little later. That's for the overall targets and the new roadmap.
If I now compare that with some of the external benchmarks, what I want to convey as a message is that on Scope 1 and 2, and also on the carbon intensity indicator, we're very much in line with the IEA scenarios that go below two degree. To the left, we have plotted the trajectory for our direct Scope 1 and 2 emissions from operated facilities.
We've plotted our trajectory against the 3 scenarios that Patrick already commented from the IEA, steps leading to 2.5 degree, APS leading to 1.7, and Net Zero Emissions leading to 1.5. Those are the latest scenarios from the end of 2022. What you can see is that our targets are very much aligned with the Net Zero Emission scenario, which is not new because we already showed that to you last year. Here is a graph I think that illustrates it pretty well. Then to the right, the carbon intensity, life cycle carbon intensity of our sales. Same kind of graph.
What you can see is that with the new targets that I just commented, minus 15 and minus 25, our targets are very much aligned on the APS scenario, so the 1.7 scenario from the IEA. Just wanna remind everyone that when we do these benchmarks, it's relevant because the world's emissions, as they appear in these scenarios or in other scenarios, is the sum of the Scope 1 emissions of all the countries, right? You remember that, I think. Another important chart, what do other outside parties, third parties say about our climate strategy? Are we up to the challenge? We've just referenced a couple of these evaluations here. You'll find more in the full report, of course.
I'm happy to share with you that for the second year, Transition Pathway Initiative has reaffirmed that our long-term emission reduction targets, I'm reading the chart, are ambitious enough to reach net zero by 2050 and to align with their own calculations for the 1.5 benchmark. We are one out of six companies, and they analyze close to 600 companies. We're one of the six that get this highest score, which is four stars. Another new benchmark, I think there's somebody from ISS in the room, ISS has its own ESG model, proprietary model called the Net Zero Alignment Model that assesses companies' greenhouse gas disclosures, intermediate targets, net zero targets for 2050, and decarbonization strategies.
We're one of the three companies, oil and gas companies, that received a net zero overall alignment status from ISS. Our status is aligning, and we happy for that, of course. To the right, a couple of other benhmarks that just show that what we do on our own emissions back to Patrick's responsible hydrocarbons theme, what we do is very much in line with the expectations of society. Net Zero, I just commented. It's also in line with the 2030 reductions of Europe's Green Deal, Fit for 55. We showed you last year through two external reports that it's also aligned with the trajectories of those countries that have committed to net zero by 2050.
We do believe that what we do on our direct emissions is well-calibrated and, of course, a lot of work. Give you a little more color on all this, starting with Scope 1 for our oil and gas assets. As I said earlier, when we compare ourselves to 2015, we have today these gas-fired power plants that we didn't have in the portfolio back then. If I take them out and only look at oil and gas, our reduction in 2022 was -29% versus 2015, which is really a remarkable result. On top of that, the 2 million tons that we expect from our energy efficiency programs are largely going to be derived from oil and gas assets.
Our energy efficiency programs will continue to accelerate the decline of our emissions from Scope 1 and 2 on oil and gas. You have a couple of examples of that to the right, and as you can see, the examples are indeed from E&P on one side, and from refining and chemicals on the other side. Overall, I think we shared that with you in September, but the payback of this investment of $1 billion is gonna be less than four years. We'll save money, as I said. If you look at the cost of CO2 abatement, it means that we'll be paying $50 per tons of CO2 avoided, which is half the cost of the European ETS. It's really a good investment on all metrics.
Back to the full scope of our one and two emissions, so including the gas-fired power plants, the CCGTs in blue, because of course, we sign up for all the assets we have. The chart here reminds you of the levers that we're gonna use to get to the -4% or more by 2030. I guess the message of the chart is really that most of the work is gonna come from self-help. Of course, there'll be some portfolio changes, but you can see that in red, it's not gonna be a big contributor. We do count in nature-based carbon sinks for 5-10 million tons also, but it's not the biggest contributor either.
It's really our own hard work that will, you know, do the bulk of the work to get there. Again, two examples. You may remember the GoGreen program that we announced a couple of years ago already, which means that by the middle of this decade, we will power our industrial assets in Europe and the U.S. with our own renewable power. GoGreen with our own molecules, and that's gonna save us more than 2 million tons. To the right, a kind of landmark project embedded into the transformation of our platform in Grandpuits, that's gonna be a biorefinery. Embedded into that, there is a solution, actually various solutions, to produce both renewable hydrogen and low carbon hydrogen.
We do that in conjunction with our partner, Air Liquide, and that's also going to be just one example of how we're gonna reduce emissions in refining and chemicals, even within an oil-free platform like Grandpuits is gonna be. Of course, I come to methane emissions, and Patrick stressed that we wanna grow in natural gas. It's very important therefore that we stay at the forefront of the battle against methane emissions. You hear us talk about that, I think at each and every meeting. It's absolutely critical. Again, a reminder of our achievements in 2022. Also, remember that we are having a gold status with the OGMP 2.0, which is a framework from the UN to monitor, measure, and report methane emissions. We want to continue to show leadership and stewardship.
Remember the targets I just commented, for 25 and 2030. As an important milestone on this roadmap, last year, we launched a worldwide campaign to not just estimate but actually measure for true the methane emissions from our operated sites all over the world, which again, I think is really a kind of a landmark endeavor from us as an oil and gas company. I have a little video that I'm gonna launch now, to show you exactly how we did that, actual measurements. Can we have the video, please?
TotalEnergies is aiming for zero methane emissions. The company has already halved its emissions since 2010 and is targeting to cut them further by 50% by 2025 and 80% by 2030. 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 emission 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.
Thank you. The next step on that and on AUSEA and these real, side-by-side measurements is, of course, so that we're gonna share the technology with our partners on all our non-operated assets, so that we play the role we wanna play in the industry and play the stewardship role and get other people to join in on lowering emissions from methane. I repeat that the only acceptable goal is really to aim for zero emissions when it comes to methane. Next chart here is just again, a repetition on our roadmap for Scope 3 for oil between now and 2030. The new targets, minus 30% in 2025, minus 40% in 2040.
Really, as Patrick said, the reason why we are able to come up with this target is what you heard on our strategy. The first reason is economic integration, aligning what we produce, what we refine, and what we sell when it comes to oil, and therefore eliminating the oil sales that we do today that have a low cash flow impact because it's third-party purchases that we resell. You heard us explain that several times in the past. The second reason is that we do have a big market share in Europe, where the markets are evolving fast, as Patrick said, and therefore for us it means transforming our downstream in Europe and be on top of those evolutions. I won't elaborate again. That's the fundamental reason, and because of that strategy, we can come up with these targets.
On, you know, worldwide Scope 3 oil, I think it's fair to say that we really stand out with these targets amongst our peers. The flip side, as Patrick also said, of the constraints maybe in Europe, are the opportunities. Patrick already commented some of the elements on this chart. As we reduce oil sales in Europe, we also speed up investments in the new infrastructure to promote the new mobility solutions for our customers. We're going to spend EUR 1 billion equity in new infrastructure projects for mobility over the next 5 years in Europe, which after debt financing means that we enable more than EUR 2 billion low carbon infrastructures. Chart here focuses on e-mobility for passenger cars and hydrogen mobility for trucks.
Again, Patrick commented most of it. We are indeed going to equip highway service stations with fast charging points. We will have dedicated hubs. We have two ventures when it comes to hydrogen-based transport for trucks. We're very proud of the 40% share we got of the fast charge point auctions in tenders in France on the highways last year. 40% is way above our market share in service stations on the highways. We spent a lot of time with our people from the marketing and services branch to calibrate how we would answer those tenders, and we're satisfied with the outcome, which puts us as a clear number one in that market, which is what we wanted to be.
Moving now on to Scope 3 from gas, which is essentially the delta between the global Scope 3 number and the oil Scope 3 number. There's a 4 million that is linked to biofuels, but other than that, the rest is gas. Here again, as you heard from Patrick, we wanna grow in gas, and because we're growing, Scope 3 from our gas-related sales will not go down. It's actually going to go up. In 2022, we're talking about 130 million tons of CO2, and we stand by the fact that those Scope 3 emissions will go up because of the positive role we see for gas in the transition, and you've heard us say that often. Selling gas to customers that would otherwise use coal or fuel oil is a net positive for the planet.
We told you last year that 99% of our LNG customers are in countries that have a net zero 50 strategy and roadmap. The reason why they buy LNG from us is because they back out coal or they back out fuel oil in their energy systems. That's good news of course since natural gas emits half the emissions of coal. For the first time this year, we've tried to quantify what is this mitigation impact of natural gas on the global emissions. We've done a comprehensive work customer by customer, country by country, to try and assess how much coal is displaced, meaning how many emission reductions do we enable when we sell gas, when we sell LNG, compared to a situation where the customer would otherwise use coal or sometimes fuel oil.
That's the table that you see to the right, and you'll be able to read all the details in the report. We're trying to be transparent on how we did this. When our LNG customer is known, we've simply compared the gas emissions of the LNG sales to the fuel that this customer would otherwise have used, typically a utility. When the final customer is not known, we do the same. We compare the emissions of natural gas, but this time to the weighted average of the flexible power sources that the country in question has, so fuel oil or coal. To be sure that we are not overestimating the impact, we are multiplying that then by the share of power in the natural gas demand of the country.
We're trying to be on the conservative side here. When you do all that customer by customer, country by country, the net is roughly 70 million tons of, quote unquote, "saved emissions," enabled emission reductions, thanks to our gas sales. In terms of emission factors, we've used the data from the IEA, and if you look at the table when you have the time, you'll see of course that these emission factors are not the same for each country because it depends, for instance, on the age of the infrastructure. The coal plants may be more or less efficient. Therefore, the impact of our coal to gas substitution is not uniform country by country either. All this is something that you would intuitively probably have come to yourself as a conclusion.
Despite all these differences country by country, the average conclusion is, I would say, without surprises, because you can see in the table as the large contributors to the 70 million tons are countries like China or South Korea, for instance, where very clearly when we sell LNG, the use of coal goes down. I would say the net takeaway is that even when our gas-related Scope 3 emissions go up, the world is better off. On Scope 3, a last chart here, just giving you an update on what we call the One B2B customer solutions that we created last year.
If you remember, it's a dedicated group of more than 30 experts now that work with our customers to help them on their decarbonization journey, offering them multi-energy solutions for their own use to decarbonize their own operations. The customers come from the 11 sectors that are listed here, so it's a sector-based approach, which also means, of course, that we can use best practices from one customer to another customer in a given sector. Again, the best thing is probably to have one of these customers speak for me. We have a short video from Holcim, a global leader in cement, one of the so-called hard-to-abate industries. Well, that customer is gonna tell you what it is we're talking about. Can I have the video again? Thank you.
C'est l'essence même du projet Go4Zero qui a été lancé il y a deux ans et dont on espère l'aboutissement d'ici 2030. On a développé un projet avec des partenaires externes dès le départ. Puis, nous avons lancé un appel d'offres dans lequel TotalEnergies s'est révélé être le plus intéressant. TotalEnergies a joué le jeu jusqu'au bout. Ils ont fait beaucoup d'efforts et en fin de compte, ils nous ont fait la meilleure proposition. C'est comme ça qu'ils ont été choisis pour le projet photovoltaïque flottant.
Nous allons développer une centrale solaire on site pour alimenter les installations de Holcim en énergie renouvelable et aider notre client à réduire ses émissions de CO2 de 110,000 tonnes pendant la durée du contrat. Cette centrale est inédite. Elle sera installée sur les anciennes carrières du site. Elle sera constituée de 55,000 panneaux photovoltaïques pour une puissance de 31 mégawatts crête.
That's all I wanted to share with you. There's a wealth of more details and stories and data in the report, but now I think we're ready for Q&A. Is that it, Renaud?
Yes.
Yeah. Okay. Thank you.
Thank you, Helle. Thank you, Patrick. It's now to open, our first Q&A session. If you have questions, of course, you can raise your hands. I see Michele was really eager to start. Michele, go ahead. We have a first question here, please, on the left.
Thank you very much. I had two questions I wanted to ask. The first one is on the long-term contracting strategy for LNG. You've benefited tremendously in the last year from having a good share of spot gas and flexibility in your portfolio. If we look beyond 2027, we could have a few years of oversupplied gas market. I'm wondering if this may be actually a good time to start to increase again the share in your LNG portfolio. My second question is on Brazil. This is a country where you've made tremendous entries in the last few years. You built a profitable portfolio, but we've also seen for the first time the government breaching the fiscal stability of some of the contracts with these four months of export tax.
I was wondering whether you feel confident this is just a one-off and if it somehow changes your attitude towards investment in Brazil?
Thank you, Michele. The first question, I think of course, today we share your views about the market, which is clearly in favor of the seller today, which will become probably a market in favor of buyers by 2027, 2028. It's super cyclical. You know, LNG plants are massive investments, and nobody wants to launch them countercyclically. It's an opportunity for us, of course, to sign some long-term contract. PNG is the right examples. We are governed by the idea that we want to have a sort of 70% long-term, 30% I would say short-term portfolio. We don't want to increase it because suddenly we make more money with the short term. It's not.
It's sometimes there are periods of the market you cannot sign contracts, or you have to accept to sign them at a level which is not good for us. These years are much better. We are back, I would say, to the 12, the 13 even % brands, you know. We come back to something which is attractive to cover some of these projects, to protect them one way or the other. I think we see some buyers who are also willing more today to stick, to go out of a pure JKM indexation, you know, short-term indexation. It's always a balance, you know, and sometimes you win. At the end, I think it's better to keep this type of shares.
Opportunities, our teams are working on it, like by the way on Qatar, that the Qatari are willing to sign some long-term contracts, and we share value. Again, 70%, 30%, we are comfortable with that. We know that we will win, sometimes we lose, but when we win, we can win a lot with spot, but we can also lose. 2020, people are looking to our results in 2022. In 2020, I can tell you, Stéphane was not so smiling, you know. Okay, this is the advantage of balance sheet. We can manage the exposure, but not suddenly going to short-term is, it would be a mistake because again, it's a giant investments that we need somewhere. That's the first point. Second, Brazil, I'm not surprised, you know.
We know Brazil, by the way. Brazil is an interesting country. Remember when we came first in Brazil in 2016, when first deal on around Iara, our colleagues of Shell was, we were fighting. The first meeting I had of Brazilian President Temer was about, please don't move anything. By the way, it was not the federal state, it was the Rio state, which is more complex story. You have always in these countries where you have emerging countries with a strong need some money for social policies. The fact that you have an oil and gas business, it would have been surprising to see the UK increasing their taxes and not Brazil, to be honest. Of course, the reaction of the industry has been very solid solidarity.
All the foreign companies together, I must insist, I think I can only applaud this behavior. We unite everybody, all our Brazilian MDs together. We decided to take actions on legal courts, because it's a matter of principle about fiscal stability. Of course, the first intent did not give us the referee did not give us a positive answer, it's not yet done. By the way, We obtained an answer, which is a little strange to me, which is, "Don't worry, it's only for 4 months, because otherwise it has to go to the parliament, and we don't know." We are in a situation where, again, governments are facing after COVID and all this inflation, it's all over the place. You know, Brazil is not immune. Europe, look what happened in Europe.
People have - governments have to spend money for social protection in various forms. We need to find the money. There is good scapegoats, I would say there. We have also to remind, and it's why we join our efforts to our colleagues. No, there are some contractual clause we need to stick to that. We'll fight. Again, it's a matter of size and reaction. It's important to maintain and to defend our contracts and these fiscal stability clause exists. We need to remind them to the government, each government. Does it change my views? I would say no, because I think as well that Brazil somewhere knows that we are - i n all this license, we have Petrobras. Petrobras is also, they know the story about Petrobras.
Some way, it's a way, I think to protect us somewhere, in order to avoid, because all what they decide for us is also for Petrobras national company. You know, you remember all the issues that Petrobras faced. Petrobras managed successfully to get out of these stories where we were in 2015. I think it's also an answer. Brazil, I would say for me, risk in Brazil is also, for more local businesses, exchange rate, inflation. We have to tackle many of them. It's a huge country. We've, for oil and gas, plenty of resource, giant fields. You know, we are very simple guys in TotalEnergies. We see giant resource, we cannot avoid to try to get in. This is what we've done in December 2021, and 2022 we have signed a contract, and 2023 is good.
That's the way we work. Giant deep water field, that's good. Let's go. It's fitting the criteria, opportunities. When you have these type of opportunities, you cannot avoid them. For me, it's - otherwise, you can regret for long, and you're not sure to come, they come, they will come back.
Thank you. Martin, maybe this gentleman here.
Hi. Hello. I wanna ask two questions. First of all, at some point, TotalEnergies had the ambition to become a top five renewable player by the end of the decade with 100 gigawatts. Now there are a lot of targets and a lot of slides. I'm not quite sure, I might have missed it, but I was wondering if that is still in there and if that sort of ambition or that target is still there. I wanted to ask you if that still is relevant. Secondly, I wanted to ask you about your ambitions in Iraq with this very large $27 billion project that we sort of read about from time to time. Can you give us an update?
What is the sort of status of that and, 'cause that seems very large?
Okay. The first one, it's written twice. We are, there is no U-turn. We stay the course. Don't, no, you will not convince me to change anything. It's written page, slide 15 and slide 17, the conclusion. But the question is not the volume again, it's the value, and I insist more on the ROACE above 10%. Why? Because by the way, this year, we managed to grow by 6, 7 gigawatt in a year. The machine is there. More, I put we have the teams, we continue to have access to many opportunities. We can select. We are selective in renewables today with Stéphane. We know we have a visibility. I don't want people to be driven the company by the 100 gigawatts story.
You know, I want them now to be driven by deliver the profitability. This is the focus of the organization. It's there. It's important because these 100 gigawatts are linked to 20% of our portfolio. If you want to deliver 130 terawatt hour, if you make the math, you have some gas, 5 power plants, you will find that it's the fundamental reason why. Let's go not again, no volume, but value is more important. This is where, the way to get, to gain and maintain the trust of the, and the confidence of our share, of our investors. Iraq, to be honest, Iraq, I cannot update you. I mean, I will tell you the truth. We have a debate about the contract we signed. We signed a contract.
It's just, you know, Iraq is not the easiest place to invest. We know the risk. For me, as I said to the authorities, the continuity of the voice of the state of Iraq is fundamental. We signed a contract in September 2021 with 1 government. We knew there were elections after. It was a test. Will this contract go through the change of government? We said, we told them before to close, I would say, we'll wait the confirmation. For the time being, we didn't get it. If we don't get it, to be honest, I cannot expose a company of a mix of risks, because we know the security situation, we know the geopolitical situation.
We are, I think, quite bold to face situation, but what is fundamental to me is, I will not use the word sanctity, just the respect that this contract. You know we invest for 20 years, so if the contract has to change after two years, that means that we are not there. I hope we have discussions. We have expressed our views. There are many discussions. We are waiting for the answer. I read an interview which does not give me a lot of confidence, but I don't know. Yesterday was interview, we were saying something, the declaration of the minister saying something else, so I'm a little. That's Iraqi politics.
Again, for me, it's a test and I will not embark the company in such a project, even if in fact the project is not, we have to renegotiate all the terms. As you know, we were not there in Iraq before because we were considering the previous contracts were not enough, giving enough rewards. By the way, our peers have exited some countries. We're there. I hope we'll find a common ground. I worked on it in the last months. Again, we need to have this political answer.
Maybe we can go to Oswald. Yes. Go ahead, please. Oswald here.
Thank you very much. Oswald Clint at Bernstein. Could I ask about SAF, please, and the biofuels ambition to be a leader in SAF? I think we're in a sustainability day. You mentioned about buying feedstock companies and, Is there not a question where you could do what one of your other peers is doing? You're big in Africa. You could be sourcing feedstocks, waste products in Africa, bringing them to the refineries. Seems like a very good ESG tick or a positive here to kind of source them from Africa. That's the first question. Secondly, for more the financial side, the 10% return on capital employed in integrated power that's going to be disclosed.
Obviously, I guess that's still a 2030 objective, but I wonder if you could talk about the path to getting to that 10% from 2023. I think it'd be a great help if the financial investors or at least the hardcore financial investors could see some line of sight to that number, perhaps earlier than 2030. Thank you.
Oswald, I don't speak enough well English. I give you some hints in my intervention, but you could be surprised in April 2023 to see more than 10%.
So is that-
Wait. Be patient.
Okay. Okay.
My CFO has to work a little, make the math, you know? No. No, no, it's not yet No, no, you will see. It's, it's not just, it's reality what drive us. I remember, you know, when we, when I was, I reminded that to Stéphane was a little afraid. When I was nominated at the helm of refining and chemicals, I had a target of reaching 12% with a 5% ROACE business. I said it's impossible. Finally, we delivered today 18%-20%. It's possible. It's a question of selection of assets and integration. Again, we know that it's not just purely renewables. We are not entering that business for renewable business. We think that this renewable business will deliver some revenues.
We know also that we have to combine a merchant, we say a secured business like in LNG with merchant business, the 70%, 30% is type of ideas that we run. Not we don't, we are not there to be an infrastructure fund, so we don't want to value 6%. It's not our idea. Otherwise, you would be right not to be happy. By the way, I would not come to you to ask you money for that. It's out of us. We want, we think and we will demonstrate to you that we can build an electricity business delivering more than 10% for actually, and we are committed and we'll see. You'll be surprised. It's coming from all the pieces, not only renewable, from storage, from gas-fired power plants, from trading.
You need to put all that together. Like in the oil business, like in the LNG business, you know, it's not only the LNG plants which deliver today the results. It's also because beyond the build, the LNG, we have a portfolio, we have a fleet of 20 25. We are growing the fleet of LNG tankers to benefit from the spot, because otherwise you don't find any spot tankers today, so you need to grow the fleet. So it's the whole logistics and mechanics, and this is the idea and the advantage of a company like TotalEnergies. We have the balance sheet to put that in place in electricity, which a lot of competitors do not have. It's also a field where we think we can make like we've done, because it's very large.
We've done some direct negotiation, direct agreement like Clearway, like Casa dos Ventos. We don't participate to any auctions with banks in renewables. You are sure to lose money or to destroy the value. You have to be smart like in all the business, we can do it because now we have really a strong team, larger team. We spend more time on that's not a roadmap to get to 10% by 2030. We want 10% much before. You will get it, 2025 we'll have secure maybe we'll increase it when we'll be more confident. Okay. On the SAF, I think first, what we've done this year, for example, for company, we made a JV with animal fats producer, SARIA, which is one of the largest one in Germany.
It took us a year to build that. You know, it's a long-term commitment from them because they are also, by the way, investing in the plant. For us, it was securing the feedstock at a good price. Good price. We have been obliged to be involved in a upstream part of their business, but I think it's the way. We're securing the feedstock. The scarce resource is the feedstock inventory. Looking to Africa, first, I'm, I do not like too much to take waste around the planet. You know, I mean, Chinese waste or I mean, be careful. You know, where is ESG, you have sustainability. If you begin to move waste in in both, so that it could become another problem. No, I don't want to have a controversy with that.
I was involved when I was young as a civil servant in waste management and waste export and import. I can tell you it could become very complex to control. That's why we are more looking today and we have made an announcement, I think, this week or last week about another co-agreement with a French company involved in Municipal waste, in order to have some waste to make some biomethane. They will also, with the same idea, you give us access to the feedstock, which we have a sort out the right ones, and you invest with us in the biomethane. Try to manage these JVs, bringing one side the feedstock, the other one bringing the investments and putting that together. It's a way to develop the business.
Africa, we look to, it's like the shops and the holdings and all that. I'm not very good in agriculture, to be honest. We look to the intercrop business. I meant little careful. In Africa, you have people who don't have food every day. To develop an intercrop culture, if a crop is not enough for them, we want also to be sure it's sustainable. We are looking to that, to be honest. I know that one of my peer is very strong on that, he seems to have developed knowledge. It's not impossible, we'll do it, but more on this intercrop story rather than the waste. On the waste, I'm more. I'm skeptical. You know, my traders wanted to. I've find it a very beautiful source of waste in China.
I told them, "Okay, be careful not to bring all." I mean, I think we should be careful. The sustainability aspects is also be of circularity and not to transport all these type of feedstock around the planet. We are, we will have a huge exposure to that, so I'm not in favor of it. Let's be. We have ways to find feedstock, but. Well, that's my point. Okay.
This way, Irene there, please.
Thank you. Irene Himona, Societe Generale . I had two questions. First, you provide in this slide pack a useful table of your exposure to unconventional hydrocarbons like shales, Arctic, and so on. You show 32% of your volumes in those themes. I wonder if you can talk about the average emissions of those barrels. Would it be above the portfolio on average? My second question, clearly the $1 billion of additional CapEx you announced in September on energy efficiency is going a long way to accelerate emissions reductions that you're announcing today. Can you give us some examples of those energy efficiency measures? Is it two or three key things you're doing, or is it hundreds of different actions?
Does it increase perhaps the proportion of taxonomy-aligned CapEx in the group total? Thank you.
I'll take the answer on the second question, Irene . There were two examples on my chart, one from E&P, so essentially, changing gas turbines and one from refining and chemicals. The short answer to your question is it's more hundreds of projects than a couple of landmark ones. If it were easy as that, I hope that we had already done it right. No, it's really bottom-up exercises, asset by asset, as I think we already explained. This is an acceleration of some of those programs. Essentially, you know, read the examples and they are more in the report. On alignment, it's not going to be a game changer in terms of alignment of the taxonomy.
It's designed differently, but it will play a big role in our, you know, reduction of Scope 1 and 2 emissions.
To be honest, on the alignment taxonomy as it's 23 CapEx, I'm not sure we have studied carefully. It's quite a complex regulation. Jean-Pierre will come back on taxonomy In his Zoom. You will maybe, it will be bit... He has half an hour to find the answer. He will give you the answer during the presentation. On the first one, I was surprised because I say, "What, what is this 32%?" Out of 32%, you have 16% which have disappeared.
They were in Russia, in Arctic. Arctic is low, low emission. In fact, there is no link. There is something wrong about this unconventional story. Unconventional, unfortunately, is the way some, I would say, some offices try to translate it. It's a mix of shale oil, shale gas, where there are higher emissions. You know, even if you can cope with that, the way we produce today, shale gas, we have little production of shale gas in barren shelves.
We have eliminated most of the methane emissions, so you can do it. It's tar sands, but tar sands are 4%, we will spin off them. They will disappear over... It's clear. This is clear that tar sands have higher emissions, but the 4% will disappear. It's Arctic, but it's out of the portfolio. No, this one has a low, very low emissions because producing gas in Arctic. There is no link between Arctic and CO2, to be honest. It's another... Arctic is more a question of protection of the, I would say, of biodiversity. Ultra deep offshore, the same. There is no link between the depth of the water and the fact that there is more emission.
In fact, honestly, by the way, ultra deep offshore, I still do not understand why you want to classify that in unconventional. It's not a matter of depth of water, it's a matter of pressure in the reservoir. It's true that you could have some situation where because the water is deeper, you could go to deeper horizons with more pressure, but it's not the case in many of it. There is no link between the depth of the water depth and the pressure in the reservoir. For somebody who knows about oil and gas, this classification is very strange to me. By the way, we don't develop over-pressured reservoirs in deepwater or ultra-deepwater because of risk, so we get out of that. The fact that there is absolutely no link.
This classification about unconventional gave me the opportunity that except the shale oil, shale gas, and the tar sands, where I can accept that we have to work on Scope 1 and 2, the rest, there is no link between what you call unconventional and climate emission. It's part of things which we need to progress collectively in order to put some science or business in the way we appreciate the performance of companies. We will not be at 32, but at less than 10 to %. It's good for I don't know which article number, article of funds, you know. Again, I accept to take action when really it has an impact.
When it's just a classification, it's not, it's not good for us to spend money on things which are not useful for the planet. Another point.
Chris Kuplent. Here.
Thanks. Chris Kuplent from Bank of America. Two hopefully quick questions. One I'm sure you've been expecting, which is, can you maybe outline the recent disposal of your marketing assets and their contribution to the cut in Scope 3 emissions? Whether that disposal alone gets you closer to your 2030 alignment or whether they are more to go. On the topic of M&A, I've asked the same question a number of years, and I'm very happy for you to just repeat what you're always answering, which is of course, on the other side of M&A, there are acquisitions. Some might say this is an interesting time when interest rates are very clearly no longer zero, and some balance sheets might be looking for rescues.
Can you just confirm that any acquisition will have to fit into these targets that you've outlined here today, and that you're not going to acquire something where afterwards you're going to give us pro forma CO2 statistics? Thank you.
Okay. No, honestly, it's not linked again, I Scope 3. The Scope 3 reduction of this ID will be limited as long as we supply. When we supply, and we will supply this network, we include the brands, we will supply them from our refining system. Scope 3 will remain now as their customer in our refining Scope 3. You know, the way we evaluate the Scope 3. In fact, it does not have a direct impact. It has a direct impact from the part of this network which were not supplied by us, which will be not supplied by us because we don't have the capacity to supply it. Again, it was not the driver behind. The reduction we mentioned to you is again, the alignment. We've done it.
In fact, it's also somewhere the fact that we think that we'll have to continue to transform some of our refineries in biorefinery. It's a whole system, but it's not driven by the Scope 3 impact. Again, if all of it, just to give you a figure, was the Scope 3, it's 14 million tons of the Scope 3, so it's not really the target. It's all we're exiting the supply, but as long as we supply, we are in for the Scope 3. Okay? Just to clarify this point. I gave you the right reason why. It's because we think we have to anticipate. We think that retail networks in Europe, some of the position will be very good in the city on motorway.
Some of us will become marginal and we will not transform Total in a grocery business. M&A, okay, interesting time. We'll see. You know, let's wait. We are patient. Your acquisition, we need to fit in your tires. It depends on the size of the acquisition. For the time being, we never revised any of our targets because of acquisition. Okay? If we'll have to do it, we'll tell you. It depends what the target is giving us. Okay? I have no idea. I know my answer. They will think okay, he's thinking to a super giant acquisition. I think because of that, it's not true. You know, because of that, it's not compatible, I would say. No, but again, let's work. You know, we'll be able to explain to you what we do.
It's not. This is where we are in our, these parameters, some on which I'm comfortable. Again, Scope 1 and 2, I consider we need to produce hydrocarbon in a different way and tackling these emissions as we've done in the past with SOx or NOx, you know. It's the emission, let's eliminate them. We have technology, it has a cost, but we can do it. There is no debate. The Scope 3 in volume, that's why we insisted, maybe we noticed that in the table we put the carbon intensity before the absolute volume. That's, I mean, the carbon intensity is a good measurement for me of the evolution of the strategy, and I agree with it as well. Going to more gas, to more electricity. That's the strategy.
The volume of Scope 3, honestly, is where we put under $400 million because with what we see it's okay. We'll not, and you've seen that we did not lower that target because we don't consider. We again, have an impact on some of it, what we do with our team. Yes, we can impact the customers, but again, we don't decide at the end of the day, the car manufacturing will sell 30% of EVs or 70%, and that has a direct impact on Scope 3. Scope 3 is a shared emission. It's not our emission. It's the emission of a demand. It's an action of demand.
We can and we have a role, and this is why we said with One B2B business, because again, it's linking our business and bringing the scope of our solutions to customers, but I don't consider the company is responsible. This one could move if it has to move. Again. We don't see that as constraint. We see that as commitment when we are at portfolio and some, again, some opportunities to deploy the strategy.
Thanks.
Lydia is raising the hand since the beginning. Maybe we go to Lydia.
Thank you, for the presentation. Two questions, if I could. The first one, if I come back to that avoided emissions one. There's obviously a lot of work that's gone into that. At some point, do you want to start targeting that sort of avoided emissions number that we add on the benefit of the electricity production, all the stuff that you do on One B2B? Is that something that over time we'll get more of? The second one, Patrick, on the electricity business, I'm not quite sure I understand entirely why you want the production to equal the sales, because in LNG, you trade around things. Surely there's more optionality in being able to trade around things as well. I'm just wondering why that, because I'm not sure I 100% understand.
Yeah.
Thank you.
Why you can ask Stéphane what he thinks about the year 2022, when you are long customer and short supply. When you have to go and find electricity on spot markets which go to the roof, and you have to transfer that to your customers, and then you put some rebates. I mean, I will tell you why. It's not the same type of resource. You know? You cannot store electricity. You don't store electricity. That's the difficulty when you are in balance. You know hat I mean? You have - you can store gas, you can - w e bought some storage of LNG storage, or oil storage. T hat's not exactly same business. We draw some lessons. Honestly, I think you will.
My view, after having spent now with our teams together quite a lot, five years, I would say, to dig into all these businesses, is that, you know, at the end, the customer side is more the marginal side, like markets this time. It's a cent, a small cent margin. You could lose it. You make money on the investments like always in all the energy business. You invest, you produce capacities, you begin to store, and then you trade these assets, then you can make more money. The end customers is like, is even smaller margin, so it's volatile. That's why we want - w e don't want, and back to a question of, Chris, we not want to be driven on the carbon intensity by putting plenty of electricity customers just to diminish the numerator and making not profits.
It could be a temptation for some people. I said, "No, no. We are there to make, to deliver value, and not just because we have one of the criteria which could lead to that." It's always a criteria. KPI, you have always to monitor them carefully. The avoided emissions. We, I mean, we know that it's some, a concept which some people are not happy with. There are not. We have working groups, by the way, I understand at the UN level, we are working on the definition. We would welcome a definition, to be honest. Of course, we could have today, and we made them some math internally about what the renewable are doing, et cetera.
At this stage, we preferred step by step to introduce a concept because honestly, on the Scope 3 debate, we are more and more with the board uncomfortable about the fact the Scope 3 has solution as the Scope 3 of gas Scope 3. Gas, again, maybe it provides some Scope 3, but when it's used to back out some coal or fuel in some countries, and then. At the end, what is important to the emissions which go to the atmosphere, to the sky, you know, it's not, it's not Scope 3. If this energy is allowed to avoid, enables to avoid some emission, reduce some emissions, it's a good one. We wanted to make the math.
Before to come to tell you we have, and to be, I'm sure we'll be accused of greenwashing once again. Let's go step by step. What I would welcome again, is to have a clear framework. I think it's useful because again, it's a recognition what is the value of each of these actions. I know the debate. You count these gas avoided emission, but at the same time, China continues to grow its coal-fired power plants. We could demonstrate that if they have no gas, they will grow them at a higher pace. You know?
I know there is a debate, so it's why we wanted to be prudent, but we had to put it on the table in the debate in order to explain why we don't take any commitment on the Scope 3 of gas. Maybe at the end we could translate Scope 3 minus Scope 4. I don't. I'm afraid by engineers and figures and KPIs. I would like just to say that we welcome these more definition, and I think we are not the first one of the peers to have introduced that target.
We took time, I can tell you we spent several sessions to be sure that the figure we put today could be demonstrated and next year audited, by the way, because I want that to be audited by a third party. It's the first year that we produce them.
I'll just add to the answer, Lydia, that I'm not sure we'll ever be able to do a target because as the table tells you.
Uh-huh.
It really depends on the destination of the LNG sales also. You know, we'll let Stéphane optimize his portfolio and then we will do the reporting based on where the LNG landed.
Okay.
I think it's a good initiative to report on this and then you can all make with the data what you want. Right? We do demonstrate that gas has a value in the transition and fully agreed with Patrick's comment, that's what I meant when I said the world wins. When we sell gas instead of coal, compared to a situation where the customer would use coal or fuel oil, clearly the planet wins. Okay?
We have questions from investors. There are some investors t o Luca.
I don't know.
I see some raising their finger for many- for many minutes.
Patrick.
They could become sick. I see our friends there on the first row, and then Luca on the second one. Luca, you are right in my under my eye, I see you raising. This one and then Luca. Sorry for that, but you know when you are at the top, you don't have necessarily full view.
C'est bon.
Okay.
Thank you. Matthias Pedersen from PFA. Two questions. Maybe to pick on the question from before, with the expected sale of Canadian tar sands, would that materially impact the average portfolio emission of the oil portfolio and hence the threshold of 19 kilos CO2 per barrel for new projects? Secondly, with your 2030 targets as you announced today, are you comfortable with also obtaining external verification of that midterm target as being Paris-aligned or what steps do you see in terms of obtaining that? Thanks.
The first one, it's 100,000 barrel per day out of which are, yes higher emissions. There will be an impact. We will provide you. I don't have in mind what is the impact, obviously this will have a positive impact. By the way, not only on the emission, but on the cost of as well of our portfolio, because it's high cost. It has plenty of virtue, in fact, which is good. We will provide you with the precise figures. On the second one, which is Paris 2030, Scope 1 and 2, Helle y ou have commented it. Canada could go down from 19 to 18.
The answer to your first question. One kilo per barrel could be the impact. It's not, it's something sizable. Helle, on the first one, second one?
On Scope 1 and 2. Was that your question, Matthias?
Across the scopes maybe.
Sorry. Across the scopes? Well, I guess what you know, what we have is some of the third-party assessments that we shared with you. That's it. You know, there's not one certified unique way of assessing this. There's no SBTI for oil and gas. I guess people use their own methodology, right?
I will be, you know, clear with you.
Mm-hmm.
We will not ask to any verification on any Scope 3 trajectory. Let me be clear. Scope 1 and 2, we are fully responsible of it and we report and we are very clear.
Absolutely.
I remind you that if all the companies and people of the world were respecting the Scope 1 and 2 trajectory, it would be fine. Asking a third party to look at Scope 3 is not part of what a board will require. What we've done in the presentation, I think that Helle presented to you, we've done this exercise about trying to put our objectives up to 2030, both the Scope 1 and 2 and the carbon intensity.
Intensity, yeah.
We made our own exercise to compare this trajectory to, the different scenarios of IEA to position ourselves and our objectives, and we show you that the objectives to 2030 Scope 1 and 2 seems to be on the Net Zero.
Tra.jectory
Trajectory. For carbon intensity, more on the APS.
Yeah.
That's what we show you. APS is compatible with the Paris Agreement. This is a demonstration. Can we, if you want us to show this curve to a third party, we can do that. That I'm fine.
Yeah.
What we produce can be - t his is a rule. We don't produce anything to you which cannot be audited by a third party. If we have some doubts at the executive committee, we keep the doubt for ourselves. When we come to you with some, this type of slide, it's because we have looked at it seriously, we validate them, and we can go to third party. From this perspective, we can do the work like on the avoided emission.
Sure.
Good idea.
Lucas.
Hmm.
Thanks very much, Patrick, and you're a much better compare than Renaud, by the way. Totally appreciate you.
I mean, this is why I'm CEO, you know. He's still, he's only investor head of investor relation. He can learn a little.
Yeah. Renaud, take note. Two questions, if I might. The first I'm gonna butcher French here, the topic du jour, which is kind of the EU Inflation Reduction Act, carbon capture. I mean, when I read it almost reads like a polluter pays. I wanted to get some sense of when you look at the legislation as it stands or the suggestion as it stands and compare it with the offering in the US, does carbon capture in Europe for you end up as being a this is how we offset our own emissions rather than really being a business opportunity? Certainly, the incentives. Well, I can't see the incentives here.
It sounds more threat than anything else, but just observations on whether one is missing something in terms of incentives. The second is oil. Solid news or great news on Suriname. Fantastic that you've got, you know, large development opportunity now in Suriname that you're verifying, and we would very much hope large development opportunity in Namibia as the results come through. I'm sure you wouldn't be allocating as much exploration capital otherwise. How do I think about the potential for barrels emerging from those regions in the context of 2030 objectives on essentially, you know, flat oil? How much is it telling me about shift in portfolio over that time? Opportunity to shift portfolio over that time?
Any good opportunities will be developed. Again, we are facing a decline of 4% per year, there is room to improve, huh? To inject.
You have a pretty stable business, Patrick, particularly with lease.
Okay. It has to be if we development, we will have to put them into our Scope 1 and 2 targets. From this perspective, coming back to Chris' question, we will develop them with Scope 1 and 2 targets. We have to find the solutions. If it's +1, if oil is growing by +2% or +3%, it's not a problem.
Okay.
Okay?
Clear.
Clear?
Clear.
Clear. Otherwise, I would not spend my money in exploration in Namibia like we do, you know? Again, I know that some of you would like us to announce a growth target on oil. I remind you that when we've done that from 2008 to 2015, you pushed us to do that. Most of you were there. I remember I was younger, but you were there. Let's go to 3%, 4%, 5%. It was a race to growth. At the end, the result has been a destruction of value by our industry. Why? Because it was volume over value. It was chasing the barrels. I don't want the company to behave like that. I want to continue to develop the opportunities, the optionalities, Suriname, Namibia, Abu Dhabi. Look, we didn't hesitate to that license.
Okay. We took them. We'll see the results, then we'll be able to tell you, "Oh, we have this portfolio. We can go by that." Not being driven by a wrong target, which will think that our teams believe that any barrels is valuable, you know. No, any barrel is not valuable. Don't repeat the same mistake. I prefer to have the opportunity in my portfolio and then come back to you. What is important for you is that we'll be able to tell you, "Yes, Suriname is growing, and that's the value that we can extract of it or Namibia." I remind you as well that there is something in our industry which is dangerous because of that. Is that generally, when you are procyclical, costs increase dramatically. When costs increase, you can destroy the value.
It's a matter of managing all this growth. I want to keep this flexibility, not to be obliged to develop the Block 32 in Angola because we announced you that we'll grow by 5% to spend $18 billion instead of $12 billion and make, and then making $5 billion write-off. This is what we have done. I don't want to repeat that. I prefer to have the capacity to manage all these developments, like I mentioned that on Mozambique. Of course, we have the barrel. That will not disappear. And the oil will be needed in that planet. It's a good oil. You can develop it by less than $20 per barrel. It's a question of keeping the pace and managing the various expectations, including in terms of cost of development. On IRA, yeah, you're right. You are right.
I mean, I agree. The plan of European plan seems to be, the oil and gas company will have to do that to pay. I understand what you said. This will come back to reality, you know, at the end of the day. The reality is that when we discuss with countries like the Netherlands about Aramis or when we discuss about it with Denmark about our projects, they are really looking to that also them as an opportunity to keep industries, how to abate industries and jobs in Europe. Maybe the subsidies will not go directly to us, but will go to these industries, which will then be able, and they are... You know, the steel manufacturers in Europe are quite good to get some subsidies today, I can tell you. All the governments want to keep them.
The subsidies can go to them, if at the end of the day, we gave them back by the price of storage that we can, they can afford it. At the end, the equation will have to work. Otherwise, this business will make no sense to develop storage if there is no customer for it. If it is for own emission, it's part of our costs. But I don't need to develop all these million tons of CCS for myself. You know, I don't need all of that. If I'm developing for others, the others will have to find a, an acceptable scheme, and so the subsidies will go to these customers, not, probably not to the oil and gas, but that's not an issue for me.
The Norwegian have decided to do it directly for the oil and gas industry, they are Norwegian, you know. They know what it is, oil and gas business. It's part, the wealth of the country is coming from where? You know, they are pragmatic. That's my answer to you. It's true that it's not directly as efficient, when you look to the IRA, you have $85 per ton, you know what you have to do, you know? It's more complex to put in place.
At the end of the day, it does not mean that a project in the US, you know, everybody's rushing to the US, at the end, the permitting issue and the infrastructure issue in the US are not much easier than in Europe, when you discuss with our - when we look facing some projects. There will be also some hurdles. That's my answer to your good question. Thank you, Luca.
Yes, in front here.
Hi. Alessandro Pozzi from Mediobanca. Thank you for taking my two questions. The first one on Scope 1 and 2, I think the real test is going to be post 2025 when, in terms of a reduction of emissions. It looks like two factors are behind it, the CCS and carbon sinks. Can you give us a sense of the cost for achieving those initiatives and how they could translate into potentially higher technical costs in, on the upstream side? The second question is, I believe you mentioned storage in renewables.
How does it fit into the equation of achieving a ROACE of over 10%? Do you see that as a cost or as enabler of a higher return in renewables?
Second one is clearly part of it. You know, when you are. You know, it's even super important. When you are developing a solar farm in Texas, if you don't combine that with some storage capacity, all the solar farms at 12:00 P.M. are running at the top. Price could be negative. You don't want to sell at this point of the day. For the 30% which are merchant, you want to be able to store and to deliver them at 8:00 P.M. or 7:00 P.M. when everybody is back home and climatization TV. It's just part of the model.
As soon as you go to some merchant business, you know you cannot develop all these capacities believing that you will find corporate PPAs at a fixed price, by the way, it's not our business model. They are part, I would say, for me, of the building the capacities and the value will be obtained for these type of investments, not only through part of the capacity can be sold to some utilities, but also by our own traders. You have, when you build a storage in the U.S., we see that as part of it could be 70% again. I don't know if 70% or 60%, but it can be 50% could be sold to utilities who need to have some...
Who want to have access to capacity against a capacity price, and part of it will be kept by us in order to optimize our own production. That's for the storage. It's part of the integrated power, and it's part of the 10% ratio, to be clear. It's not a cost, it's a cost and an opportunity at the end, both for us, like all what we invest. Now the Scope 1 and 2, don't make a mistake in our business, in our company. The Scope 1 and 2 of the downstream of refining is larger than the one of upstream. A refinery is a source of huge amount of Scope 1 and 2.
The target to go down to the 2030 is a mix of, as it was explained by the greening of Scope 2, so using our competencies in renewables, we want all the refineries, and it's a matter of renewables and trading, to be supplied by green electricity. We are building the plant in Spain and the U.S. in order to do that. It's also with, by the way, a PPA between my integrated power division and my refining and chemical division, and then the integrated power will have to take care of the PPA. We have done it as with another customer, exactly, negotiation. I had to arbitrate the negotiation at the end, but we've done it, so it's the way we progress. It's also working.
At the end, the -40% is accounting, as we said, I think it was written, 5 million-10 million of storage. I would say most of that will be at this point of time, natural based, carbon sinks. Let's say 5 million probably range, which are today, and we have quite a number of, there was a presentation, I think, last year. We are quite stringent, develop at about an average of, let's say, $15-$20 per ton. It's not so expensive. You know, we spend $100 million. We are building this inventory of carbon credits.
By the way, one thing we need absolutely to expect from the new COP28, I've said that to Sultan Al Jaber, is really a huge progress on having a clear, serious framework for these carbon credits. I met John Kerry. We need absolutely to get that because otherwise we begin to be afraid by all these controversies about this type of credit. We need to adopt at zero. These are super efficient way to store and to eliminate, to compensate some emissions. Very efficient. We should have a strong and serious framework. It's very important if we are serious about the Paris Agreement. The carbon storage is at 2030 for our own emission is still limited, to be clear.
What type of carbon credits you mentioned?
It's investing in different carbon sinks. We have taken some projects, forestry projects in Congo. A sustainable forestry. It's a long process. You know, you have to invest this between years because in fact, you can have the credit only if it's a sustainable carbon sinks.
Yes.
It's not planting trees, that does not work. It's maintaining, developing. It's 20-year projects on which we begin to. We have different projects. We have where we have been beginning to invest in Congo, in Gabon, in Southeast Asia, in Australia, in Peru.
Yeah. South Asia. Yeah.
In Ecuador. We don't make too much noise about it, but we. Because we don't use them. For the time being, we store them and from 2030, we want to use them only the day we have at least 10 years in advance of sustainable level. We don't want just to make cool year after year. We want to be able to demonstrate that we have enough in order, yes, to put them in our accounts. We do that only for us. We don't intend to trade them. All the investments we do are absolutely dedicated only to our own emissions.
It's not a matter to make money. It's a matter to be serious about it. These are projects which are quite complex, involving a lot of communities generally. That's what we develop.
There's one page in the report.
In the report, you have more information about that. More questions? Yeah, we have Xander here.
Thank you. Hi. Xander Urbach from MN. We were quite surprised with seeing the -25% for CO2 intensity. But let me or explain me the math a little bit. What, what are you doing faster? What are you doing more? Really, maybe what are you doing less? Maybe are you producing less oil in 2030?
No, no. We didn't see that in the presentation. Maybe you would like to see it. I know, because we met last week. You, I think you came to my office last week, we met. No, it's not the case. No, no. No, it's because, again, I think, we look seriously to that. We are much more confident to our ability to deliver these 130 terawatt-hour of green electrons. We know. When we set the target in 2020, we are at the beginning of the story. You know, we had 2 or 3 gigawatts. Today we have 17. We have been able, and again by the way, to accelerate as in. For me, honestly, I will just be true, clear with you.
I would not have put many dollars to what we will spend for $ billion in 2022, $5 billion in 2023, because we have created much quicker than expected, the machine, I would say the people and the portfolio. Today, we are much, we are most confident in the fact that we can deliver what we told you. I think this is a way for me to look to this target. Is we said, "Okay." By the way, I said to the board, let's be clear, this minus 25% means we'll have to deliver. It's not aspirational what we said. Coming back to the question of, I think it was of one of the first question, we have to deliver this 130 terawatt-hour. This is the condition.
We have also to transform part of our, to transform the downstream, as we said. The alignment is part of it. It's, and by the way, you've seen that we converted the Scope 4 reduction and the Scope 1 and 2, there is a link there between the -40%, -25%. There is a link between both figures. It would have been strange to diminish one and not the other. You could have said there is something. That's the logic. It's getting more and more confident in the capacity to execute the strategy.
Again, from 22, the fact that our balance sheet, all that, what happens, give us a lot of financial strength to execute it and to not to, and to act, and to do it in a quicker way as well. That's what's behind.
Is there any, maybe Kim Fustier on that side?
Yeah. We have Kim.
We have Kim there.
We have Kim, in the back.
Maybe we -
It's like Luca, Renaud don't see you. Okay.
You may have disclosed this before, I think you have, but in the 10% ROACE target in integrated power, could you maybe just remind us how much of that comes from integration and how much of that comes from base returns at the project level? Just maybe give a couple of examples of what integration is in practice.
Do you have that information or, do you have that information on oil and gas ROACE? Why do you want me to give you that information of integrated power which is just being disclosed? Wait and see.
Fair enough.
You have to work a little. I cannot fill all the Excel file, you know. That's part of the fun between us. I mean, we'll see. Everything is contributing to the results. Everything is contributing to the ROACE. I mean, I'm, that's where that integration is fundamental. Okay?
That's fair enough. My second question is on your own emission reduction efforts. You've accelerated those targets on Scope 1 and 2 emission reductions, especially on energy efficiency. I'm just wondering, how much of a role are high energy costs playing? In other words, would you be undertaking all of these initiatives if, let's say, European gas prices were a third of what they are today?
Yeah. I will tell you, we do it because we have more money. We have more money, we have more and higher price of energies. We are an energy company, so we benefit from the higher price. Of course, the energy is also a cost in our refinery. That's the motivation. Let's be clear. I said to my refiners, "You need to have more ideas." by the way, I was, it was interesting for me, but we said in July, "I will allocate $1 billion." People just looked to me, "What do you want us to do?" "Think, please. Go to your plants." because they are facing a cost, you are clear in refineries, they came with many ideas. yes, it's a, it's clear about the high price of energy.
At the end, the way we look at the portfolio was not in terms of returns, was the dollar per ton of CO2 at all level.
We asked them to translate all their initiatives in $ per ton of CO2. The average of $ per ton of CO2 is around $50 per ton of CO2. I remind you that we have we evaluate all the projects with another $ per ton. Total of $50 per ton of CO2 in Europe. By the way, the price is around-
100.
100. It makes sense. We have a return. We made it possible because we have more money. We think it was the right investment. It's clear that, as I told them, it will help you to lower your breakeven. When the margin, refining margin will go down again, you will be in a better, in a safer place. The motivation is an economic and sustainable motivation, but it was made possible. I think it was a good investment in the company to strengthen the breakeven of our refineries and also to lower our emissions.
Okay. Maybe w e have -
Another in the back. I will buy some lenses to Renaud.
Thank you for a great presentation. Just one question. It's Christyan Malek with JP Morgan.
Yeah, Christyan.
What you mentioned the volume growth, and I agree it's a focus on value. What sort of indicators are you looking for to sanction this volume? I mean, when's the day that you turn around and say, "Right, we're going to go ahead." Obviously, finding the oil is important, and that we missed it. Just can you give us an idea of what is it, just as we think about your CapEx? Because as that day comes, I suspect the CapEx goes up on the back of it as well. I just want to understand the trajectory and what key milestones we're looking for to anticipate.
Anticipate that up to 18, it's okay. We have room to navigate up to $18 billion. The sanction volumes is a sanction of projects is very clear. We use criteria we describe, $15 per barrel, 15% rate of return, more or less. It depends. When it's LNG, it's not an IRR, but we evaluate the projects. It's more in the cash per CapEx, I would say. Then $20 per barrel technical cost, which could become a hurdle, a tough hurdle for our E&P division or $30 per barrel of breakeven, which is another one. The 19 kilogram per barrel, maybe 18 next year. That's a combination of criteria that we use.
Generally, I'm looking myself to again, this famous ratio about what is NPV 0, which is created, divided by the CapEx I invest. For me, it's an important criteria. I like that to be more of two and more than less than one. You know, I like to see what is. Because at the end, if I need to increase my return to my shareholders is the NPV 0 which counts. It's not the discounted value. You know, a discounted value is something which is a little more complex to manipulate. What you want at the end is not a discounted dividend. You want a real one with real cash. That's why I'm looking to this type of value creation.
It's a factor of how much do I put on the table, how much do I get out of the projects. That's a simple matrix which works quite well.
Any other question? I think we are done for now. You will have other opportunities to ask questions after the second part of the afternoon that we can launch, which will be, of course, shorter. But basically, we'll try to illustrate our sustainability journey. It's a short illustration, so it will be, maybe we can move to the next slide. Yeah. It will be with three people, three voices. We'll have Helle will cover what we call the planet about nature. Few slides to illustrate people with Namita Shah and profits with Jean-Pierre. Just a little piece of advertisement again. We have our report, which is online. It's a piece of very rich piece of information.
What will be described today and now is only a part of it. Just download it, download the report, and you will get all the details and all information, you need. I see people there who have been working on it. Let's start now. Helle, the floor is yours.
Thank you, Renaud. I'll start with the planet and just a couple of charts really quick on nature, starting with biodiversity. Taking care of biodiversity, we continue to manage our operations and our new projects in line with the four pillars, the four commitments, on biodiversity that we shared with you last year and that are written here again on the chart. You know, I assume that you are familiar with that. Otherwise, again, there's plenty of details in the report. What I want to talk about is two new things. This is a progress report, so two new things amongst others for 2022. The first one linked to Patrick's initial chart on our Sustainab'ALL program.
One of the elements of that program is that each and every site, each business unit, each affiliate of TotalEnergies is going to have a biodiversity action plan locally. That's something new. It goes way beyond what we had in terms of commitments earlier because we were talking about biodiversity action plans in the sites that were important in terms of biodiversity. Now it's going to be generalized. Of course, it will depend the quality or the substance of the plan will depend on each site. If you are working in a building somewhere, it's not exactly the same as if you have an operation out somewhere in the field. It is very important for us and we think it's a good way to embed culture. A culture shift around both awareness and commitment to biodiversity.
As Patrick explained, there was a huge buy-in to this whole sustainable program, and certainly on that aspect also linked to biodiversity. First thing, cultural change and working really on every side on biodiversity and having a positive impact. We also just remind you that we had this commitment on zero net deforestation for new projects in new sites. The update I have for you is that we did not FID any project in 2022 that was concerned by that commitment, but of course it's still valid. I also just wanna comment on the case study to the right here from Uganda. Just want to tell you that in connection with the Tilenga project in Uganda, so the upstream part of the project, we have teamed up with Uganda Wildlife Authority, UWA.
We've teamed up with them really to together jointly fight against poaching in the Park of Murchison Falls. We are promoting a new model for the park, a collaborative management model, where essentially, UWA and the public authority therefore will team up with experienced NGOs that you really know about preserving biodiversity. That's a model we are going after. As a first step, we brokered a relationship and a partnership between UWA and WCS Wildlife Conservation Society that worked together in the park and came up with some tangible, visible results in terms of picking up poaching material. We're saying here 1,200 snares were removed from the park, that was very much linked to the quality of the NGO, WCS.
Also, ranger training, new equipment for the rangers, and a lot of other things came out of that first milestone on the collaboration. Our role is to provide technical support and of course, to provide funding. Over time, the goal is to put Murchison Falls really in line with the best managed national parks in Africa, and I can tell you that right now they are not quite there. I also just remind you that in Uganda, we have said that the broader biodiversity action plans are designed to create a net gain in terms of biodiversity. Second chart here is on preserving scarce freshwater resources. One of the themes of the IPCC report that came out yesterday or the day before, very important, of course.
Remember that we joined the CEO Water Mandate last year. We are progressing on our action plans linked to the 10 sites we have that are in water-stressed areas by 2030. So we're really implementing concrete action plans. One example we give you here is the Antwerp platform in Belgium, where essentially we are going to replace the fresh water that is used for the cooling processes of the platform, replace that with purified wastewater. We'll invest to that end. The project will be up and running in a couple of years. Again, we'll do that on all the sites we have in that area.
Another thing we did in 2022 was just to look at our data centers and assess if they were using any water resources and we found out that they are not. We have data centers that do not use water for cooling processes, which is important. The last thing I wanted to share with you is that we're also readying up to be able to audit our suppliers, our key suppliers on their water usage. Continuing to drive, I would say, sustainability throughout the value chain, as we also said we would. There are a number of other themes on which we will be working with our suppliers starting this year or the next year. That's really all I wanted to share with you on nature.
Namita, I hand over to you.
Thank you very much. I'm going to talk about people, I'd like to start, of course, by talking about our people, who are arguably our most important asset, and without whom, much of what Patrick and Helle spoke about before the Q&A would not be possible. As all companies, we do regular employee surveys. Our last one was in 2022. It was the first one after the pandemic and the first one after a complete deployment of our new strategy, a multi-energy strategy within the company. As you can see, that our engagement score of our people is at 80, at over 80%, which we are very, very pleased with.
More importantly, you can see that 87% of our employees have confidence that we will be able to achieve our ambition. As all of you have probably understood, over the past few years, when we say that we are going to do something, we do it, and our employees are clearly, very much behind that and are there to deliver on our, on our ambition and deliver on what it is that we say that we would like to deliver on.
After the pandemic, as a lot of you know, the expectations of employees from their employers as to the kind of care that we are providing has changed, and we have decided to put together what we call a sort of a well-being score, which is a combination of several questions, which we will be ensuring to be aligned with external benchmarks, but which cover a range of questions from things like mental to physical well-being to just compensation to being given the opportunity to look after our families, to work in a flexible environment, and to be able to feel safe at work and to feel respected at work. The score for that in 2022 was 78.6, as you can see on this slide.
We will be continuing to work on several care programs. The last thing I'd like to mention before I talk about feeling safe and respected at work is that in the sustainable goals that Patrick mentioned at the opening of this afternoon, one of the things that we have decided that we are going to be following on a site by site and an affiliate and a team by team basis is the engagement of our employees to be able to listen to them better and make sure that in every entity of our company, we are listening and making sure that we are responding to the concerns of our employees. Of course, people cannot feel safe or respected at work if they do not feel included.
You can see that our objectives for 2025 mean that by 2025, every senior executive organ of the company, starting from the Executive Committee down, will have 30% women represented. Also by 2025, our senior managers, 40% of our senior managers and 45% of our senior executives will reflect the diversity of countries in which we are present. We are over 100,000 people in more than 130 countries across the world, so we intend for that to be reflected with respect to the representation of people outside of France.
On the slide, we have talked about people with disabilities because at TotalEnergies in the past five years, we are very proud of our achievements and the work that we have done with people with disabilities, very much focusing on inclusion. What we have learned from this journey is that despite the fact that we are in many countries, including France, where we cannot ask people to declare their disabilities, our ability to create an environment where people feel included and heard, increases the ability of people with disabilities to actually declare themselves because they are confident that they will be seen and included. It is something that we are that our people are extremely implicated in, not just here in France or in Europe, but really across a lot of our affiliates across the world.
Let's move on to talk about the people who work or live in or around our industrial projects in terms of our respect for human rights. For those of you who are familiar with the United Nations Guiding Principles, you will see that we have done the work to identify what our salient issues in human rights are, very much based on the kind of businesses that we run, as well as the risk profiles of the different countries in which we operate. Our first group of salient issues is with respect to human rights in the workplace, where of course, we need to provide a just and an adequate working environment for people who work for us and also people who work for us via our suppliers.
We also focus particularly in some of our countries where we have identified a risk of child labor and forced labor. We make sure that in these countries, our employees are very much educated and trained to this risk, to keep their eye open for this risk and for this possibility. We follow up with assessments not only of our suppliers, but also of our own organizations, our own offices and businesses in the countries which are exposed to this type of risk. Our second group of salient issues are with respect to human rights it, of our local communities. These very much concern the people who live and work around our assets.
There are several issues that could be involved, ranging from the right to health, the right to an adequate standard of living, and of course, access to land. A couple of examples over here. First of all, in Uganda, with relation to our Tilenga and EACOP pipeline and the relocation program that is associated with it, we have, between EACOP and Tilenga, over 90% of the compensation agreements that have been signed for people who need to be relocated and a very robust grievance mechanism that we consistently review and make sure that we have a dialogue with the people who are concerned, and we work hard to be able to resolve all of the complaints. In Mozambique LNG, we are going a little bit further.
Patrick already mentioned it, when he spoke about Mozambique LNG. We have decided that we have named a recognized independent third party expert to do an evaluation of the human rights situation in Mozambique LNG, and we'll be working proactively and in anticipation of the kind of work that we need to do and the groundwork that we need to lay in order to be prepared when we are ready to make the investment decision and start our operations and our work over there. Our last, I'd say group of salient issues is based on security-related activities.
We have several projects in rather remote areas, in Papua New Guinea, for example, or in Mozambique, where we need to ensure that the people who are working on the construction of our facilities, and later on in the operation of our facilities, have adequate security protection. That means we also have the responsibility to ensure that the people who provide such security do that in a respectful manner without the violation of Human Rights. We actively apply the principles on security and Human Rights. We have a very, very robust training program for people who provide security in our assets, and also accompanied by a grievance mechanism to make sure that we are catching any issues that may come up.
Last, just to take the comment of Helle a little bit further, we are working actively to engage our suppliers. In 2022, TotalEnergies had goods and services worth $27 billion coming from over 100,000 suppliers across the world. That means that we have an enormous opportunity to promote sustainability all across the supply chain, and we are taking that opportunity very seriously. There are some concrete examples here that we'd like to share with you, which are developments and acceleration of ideas that we have had over the past couple of years.
First of all, just as an example, as far as GHG emissions reductions targets are concerned, we have decided that by 2025, 400 suppliers who represent approximately 70% of our upstream Scope 3 emissions will have to themselves set GHG emissions reduction targets. We started the work about a year ago. We sent out questionnaires. We have 350 suppliers who answered, and 62% of them who have already set these targets. For the work that we have done in this, we are very pleased to have received an A rating by CDP in terms of the supplier engagement work that we are doing. We also believe that we need to work with our suppliers in a duty of care.
We talked about human rights, and we started a few years ago a program to audit our suppliers on human rights. 200 suppliers have already been audited and the program will continue. We have also decided that we would like to extend the scope of this audit beyond human rights. We would like to include climate, we would like to include environment, and the goal is to be able to assess the overall sustainability of our top 1,300 suppliers by the end of 2025. Now, we do all this not just by audits and audits and audits, but we also do this by ensuring that our own people who are in charge of procurement understand what it means to do sustainable procurement. That means we have to train our people internally as to how to manage that.
We also work very closely with our suppliers to help them understand what it means to achieve these goals and how to get there. There are a large number of our suppliers, many of them are smaller in developing countries who sometimes may have had issues with respect to what does it mean to provide an adequate and a just work environment, for example. The objective of our audits is not simply to just strike them off our supplier list. We wouldn't be doing anything positive, I think either for the people in those in those companies, if we simply did that. The objective is to work with them to help them improve their standards and to help them find ways of being able to match the objectives that we have.
That is all that I wanted to say for this afternoon. There's a lot more information in the report that I hope that you have all or will be downloading. I now hand over to Jean-Pierre.
The last section of this Zoom is on profits and the resilience of our financial to climate-related risks. Patrick already presented the graphs on the left-hand side of the slides, but we decided to present them again because it's in our views, it's a perfect illustration of the resilience of our portfolio. You see how our portfolio is positioned on the global oil supply cost merit curve. That mean that even in scenarios in which oil demand could decline, we will be resilient. Another topic to assess or to test the robustness of the resilience of portfolio is the sensitivity test we performed. You see the two scenarios that we consider in 2022.
The first one, what we call the IEA Net Zero scenario. We used the price deck, the 22 price deck IEA Net Zero to assess the impact of this scenario on the net present value of our portfolio compared to the reference scenario we use to sanction our projects. You see that by using this scenario, the impact is quite limited, less than a 15% loss in NPV7. The second sensitivity that we used for obvious reasons, we assess CO2 price at $200 per ton. The reference price is $100 per ton. We increase by $100 per ton this scenario to assess the, once again, the resilience of portfolio to this assumption. You see more or less the same impact.
An impact minus 15% NPV7 on our global portfolio. We have already mentioned that we have a low cost, we have a low emission portfolio. You see again the metrics, the operating cost among the best in class, $5.6 per barrel in 2022. The Scope 1 and 2 oil and gas operated emission at 17 kilo CO2 per barrel. It's not rocket science. It's a competitive advantage. If we want to keep this advantage, we have to sanction projects using strict investment criteria. I will not repeat the criteria we used. Patrick already mentioned that. $15 per barrel for Brent, $100 per ton for carbon price.
Of course, each project must be a low cost and low emission project contributing to enhance the portfolio to increase or to improve the emission intensity. We are TotalEnergies, there is no surprise. We use the criteria to sanction our project in 2022. You see the result. You have here on the left-hand side of the slide. The 12 main project that has been sanctioned in 2022, and of course, each project are in line with this criteria. Let's move to the financial statements. We have financial statements, we have accounting principles that are aligned with our climate commitments. In 2022, but it was the same in 2021, by the way, we have focus on different parameters to ensure these alignments.
With our external auditors, we prepared reports on key parameters or four key parameters to demonstrate these alignments. Of course, the four parameters, first is the CapEx allocation, the second is the depreciation, how we amortize our assets. The first one is asset retirement obligation, and for obvious reason, the fourth one is impairment testing. You see here that in 2022, it was the same in 2021, by the way. We use the price scenarios to test or to calculate these impairments, as price deck converging towards the price used by IEA in their Net Zero scenario towards 2023 - 2050 sorry, for both oil and gas.
We use this CO2 assumption at $100 per ton. We, for a matter of transparency, we gave, we disclosed all the sensitivity in relation with prices, in relation to refining margins, to once again demonstrate the robustness and the resilience of portfolio. In 2020, we made a full review of stranded assets. That means assets that have reserves above beyond 20 years and with high technical costs, and it's led at that time to impairment of $5.5 billion on Canadian oil assets. There is, I think, an underlying message in that slide. With the Japanese garden. I am a Zen CFO because I can, I can tell you that you can be comfortable.
We have a balance sheet that is protected from new stranded assets, given the capital allocation we have and the rigorous and the stringent impairment testing that we implemented since a couple of years.
In fact, I selected the photo. It's true. I told them, you put -
It was a private joke between us.
You put a Kyoto garden, a Japanese garden, he has to deliver the word Zen in the presentation.
Yeah.
Congratulations.
Thank you. A few words on TCFD.
You know we have fun sometime, huh?
So a few words on TCFD. So we are a pioneer, in fact, in implementing a TCFD recommendation because it has been done in 2017. We think that it's an efficient tool to identify, to assess, to manage climate-related risks. In 2022, we updated our risk mapping with the boards. You see here the extracts of the main TotalEnergies risk mapping in relation with climate issues and how it's comparable to the TCFD reporting. Of course, as you can imagine, we have internally different committees to ensure that this system monitoring the risk is working well. We have the at the level of the board's audit committee, regular discussions regarding the efficiency of this risk management system.
For Irene, I think I have my last slide on EU taxonomy. So in 2021, so the previous year, we have reported CapEx eligibility figure, but also, and I think we were one of the first company to do that, the CapEx alignments. Of course, we did the same exercise for 2022, and you see the result. By the way, we decided, of course, to give the figures on a consolidated view as requested, but also to give a proportional view because we think that it's more relevant in our activities and particularly given the business model we use to develop our integrated power business. So you see the progression, you see the increased eligibility alignments clearly supported by the CapEx allocation that Patrick already mentioned to you.
By the way, the main difference between the CapEx eligibility, eligible and the CapEx aligned is the CCGT investment that we did in 2020 because by construction, I would say this CapEx are eligible, but it's quite impossible to have this CapEx aligned because the threshold put by the EU to have this CapEx aligned is very, is quite impossible to achieve.
It's not impossible. It requires, Stéphane, to produce plenty of biomethane or hydrogen in order to feed the power plant. It would be even more expensive to make power. We have time. One day, it could become aligned.
To answer to your question, Irene, more specifically, the $1 billion that we will devote to energy saving program. By the limit of the taxonomy, given that this CapEx will be spent on non eligible activities, so E&P and refineries, will lead to the fact that these CapEx themselves will not be eligible. The impact will be marginal on the taxonomy. That's the limit of the taxonomy. honestly, we are not driven by this report. That was my last slide, I think.
Thank you for the zen.
I have.
Renaud is coming. With glasses.
With glasses.
You look to the back first.
Do you have -
Any question?
Questions.
As a complement to the first row or anything.
Henry. I see Henry raising the hand.
I have a question on the, procurement and the integration-
The microphone does not work, I think. Please another one. Yeah.
This one's working. Hi, Patrick on from EBS. I wanted to ask you about the procurement and the integration of the greenhouse gas emission reductions in there. Is the plan automatically that there'll be, you know, some sort of criteria around how quickly the supplier reduce emissions when it comes to selecting these? Are you thinking about that longer term?
Namita?
Yes. I think, I mean, as you saw that, you know, we've started this exercise, sort of a few months ago. Our first criteria is to ensure that people actually do have reduction targets. I think once we are able to work with our suppliers, as I said at the end of that presentation, we need to work with them. The idea is not to be sort of, it's not a punishment. The idea is how do we embark them on the journey with us. I think that as time goes on, we will be able to become more and more stringent. That should be our goal. I mean, we can't just have, you know, have something which is not meaningful.
Once they start being able to achieve their targets, we should have the role of pushing them to do better. I think that is the objective that we have.
I think it's a matter of stewardship, like it was written. Large corporations like us, we have to be stewards. The fact even that we ask the question is important. The fact that we discovered 60% of them have already thought is also important. By the way, I received some questionnaires from some of my customers to me, so I know it gave me the idea to revert it. I sent a nice letter to Martin Brudermüller, to explain him, by the way, that we are an oil and gas company, you know. We have climate targets. No, I think it's important. Again, I think the whole system will, it takes action.
If the value chain is asking itself, and at the end of the day, for me, it's the Scope 1 and 2 of all that, you know, that we need to drive. But again, I think it's a lot of corporations. 60% is not bad, but the others will have to follow.
We said by 2025, okay? For the top 400.
Yeah.
Namita's chart. We give them a little bit of time, of course, because one thing is to be aware, another thing is to elaborate a plan that is credible and everything else. I think it's fair, but,
Yeah. In fact, we are going further because this was reporting at the corporate level, the top 400. In the sustainable criteria or local teams, they have to do the same locally with our own suppliers, so it's much, much smaller I think some of them have chosen, have selected more than $50,000 per year, which makes not very large, some $10,000. Then the idea to count the number of suppliers locally which have some commitments. One review. Dynamic is not only coming from the top with the large corporation, but also on a bottom-up approach for - it's one of the KPIs just to - maybe we'll have some nice stories to engage and I hope some success stories to engage some local suppliers on this idea. We do it on both levels.
As Namita said, the response is positive, because guess what? Our suppliers, they are also aware of what's going on, and they have, you know, their own sustainability roadmaps. It's win-win.
Okay.
Yep. Go ahead.
Hi. Hi there. Justin Kew from Balyasny Asset Management. Two questions. Well done on getting these sites to sort of look at nature side biodiversity. Interested to hear how you measure biodiversity impact. It's always a big question. 2nd question on taxonomy. I realized that you're eligible with the 34, and then your alignment is 31. What's that 3% drop? You know, what was it that didn't qualify?
It is a gas-fired power plant. In Europe, there was a fight at EU level to know if gas-fired power plant were in the EU taxonomy or not. They are the eligible, but to be aligned, you need to use them with less, I think that 180 nanogram of I don't know what, which is obviously not natural gas. That's the limit of it. Either it's a CCS that you have to put on it, or you have to burn biomethane, or you have to burn part of hydrogen. That's why there was a long political debate. The result is yes and no. That's the difference. The first question, what's your - you know, I'm chairing now the French Association for Environment in Industries.
We work a lot on biodiversity, and there is no real measurement of it. You know, it's difficult. You can measure the DNA in the drops of waters on your site. There are ways to make, but it's one of the complexity to report. I know that for you are willing on all your ESG part to try to transform this biodiversity in an aggregate, something synthetic. I think, it's easy for CO2 and one of the difficulty to action on it. You know, when we ask ourselves what could be done at the corporate level, say, let's have some action plans. It's pragmatic. To measure it for the time being, it's a sum of... It's difficult because it's complex, in fact. You know, no, I'm afraid we didn't find it.
You can find for part of it, again, when you speak about net zero deforestation, we decided it's by hectares. You know, we had a long discussion of do we measure it. Some people came to us, "You know, you should evaluate the biodiversity of the what you destroy to replace it." You know, how do you measure? We said, "Okay, let's make a simple measurement by hectares." It's not perfect. You know, at least there is a sort of guideline in the company. It's true that when you manage such a company, not being able to transform a concept into a KPI makes the action more complex. It's why what I propose for the time being, it lets embark the people culturally. Let's have some success stories. You know, there was a.
You will see in the report, I think there is a nice success story, I think in Réunion Island.
Yes.
About a wind farm. I see Catherine Remy, who is there, who is in charge of this nature and environment. She came to us with 5 different topics. We selected 1. The idea is to go by example. We dedicated this environmental day to biodiversity. We make some trips in forest. Myself, I went with my teams. It was okay, you know. It's a way to... I mean, the people to understand what it is about, but the measurement is complexity. I'm afraid for your farms, it will be not so easy to translate all that in a synthetic parameter KPI.
Have a discussion with Catherine.
We'll see. No, we are working on what they call the parameter the same, but TCFD.
Nature.
TNFD, which could come, but it's the same thing, more as a framework appraising the risk, you know. Like as TCFD, it's not again, it doesn't give you a synthetic element.
We are part of TNFD.
Okay.
Other questions?
Any question? Luca? I think there was somebody on the first row, but I didn't see.
Sorry, it's a question based on ignorance. Can you just describe what proportional means?
Uh, it's -
What is it incorporating?
Consolidated is consolidated and proportional, you take your share over the JVs and you multiply by your share. When you have SMEs.
Right.
In SMEs in equivalent, you take the proportionate share.
Okay. Can you give us any indication then of the breakdown of how much of the 34% et cetera of a taxonomy aligned is aligned with or is associated with the element that goes to?
It's 34% of a higher figure than the CapEx figure. CapEx is consolidated.
Yeah. No, no, I get that.
When you make proportionate. Because in CapEx, you have the equity part. You don't have the pure proportionate when it's finance. Which is why it makes more sense for us because we have a lot of financing, project financing on what is chemicals, renewables. When you look in proportionate, you take the full proportionate part that you take. In terms of consolidated, you take only the equity part.
Okay. Thank you.
As a renewable, the project is generally developed at 20/80 or 30/70. You have more CapEx in a proportionate view.
Sure. The second question actually goes back to the first presentation. Just in terms of storage, Patrick, in regarding your electricity chain, why is 5 gigawatts the right number or the number that you've decided on?
Oh, that's a complex question.
Okay.
Ask Stéphane.
I'll ask Stéphane.
I have the same question to him.
Okay.
It's a debate.
Okay. Let's do it.
We try to know. Let's say we are working on it. How much should we develop in order to cope with the intermittency? We want to keep merchants or... At the end, they came with a nice memo, and we say, "Okay, five seems to be at first." We have looked to what some utilities are announcing. It does not seem to be inconsistent. It could grow in the future. I'm not sure it's enough. I'm not fundamentally sure it's enough, but it's back to how much we develop.
Thank you.
Good question.
Oswald, yes.
Yeah. Thank you. Just on LNG, or at least your ambition to grow gas, the emissions from gas going up are okay. How do you account or how are you thinking about Cameron, Costa Azul, where you're sourcing gas from the grid system in the US, and whether those suppliers are obviously reducing-
Methane leakage and the associated emissions. In the 2030 targets, is there anything embedded for future equity LNG that you might be thinking about?
Between Cameron LNG and Costa Azul, we are partner of the plants. We account in our emissions when it's proportionate, when it's in equity share, we account for equity share of the plants. If we go upstream to integrate, which probably we'll have to do because the larger we are, I like to have a edge in my portfolio between production and LNG, then we'll count for the emissions of our production. But you know, again, you don't produce, when we look to the emissions of our barrelage, U.S. barrelage SHARE today, it's quite low, so I'm not afraid of it. But it's part of the equation, so again, it's part of this 38 million tons. If I want to do more, I have to abate more. It's not complex, you know.
I think this is - unl ess you have COP 1 and 2, no problem to take that constraint. I think we have to accept it. By the way, you know, look what we have done on the gas fire power plant. We have increased the gas fire power plant. It's adding 7 million tons. No, 9 million tons, I think, or 7 million tons. Sorry, it was in the slide. We didn't complain with it. We introduced it in our target, you know? To us to be consistent. Okay.
Other questions? Yes, Irene. Yeah. Yes.
The solution.
Thank you. I haven't obviously read yet the 23 sustainability report. In last year's report, you made a very strong statement that neither global energy demand trends nor energy efficiency trends on the demand side were aligned with what is needed for net zero. Russia happens, and I wonder what your view is in this year's report. Has there been any noticeable change? Any acceleration to energy efficiency that is worth highlighting?
The energy efficiency has gained some momentum. That's clear. The question, is it demand destruction or is it really energy efficiency? We are still, today, when you look to the consumption in Europe, it's difficult. There is also because of high prices, some demand destruction, which could come back because you know, what we observe today in the market in Europe is that we were wondering why the diesel was not stronger. The spread of the diesel, despite of the Russian ban, did not increase, even was a little lower. In fact, what we also observe in the statistics of Stéphane gas consumption in Europe, you have an increase of gas demand for industrial sector in Europe.
In fact, it's because you have some shift, you have some manufacturing industries, which last year when the fuel, the gas went up as an average to $200 per barrel. The fuel was around $100 per barrel, $120 per barrel. They shifted from fuel to from gas to fuel. Now this year they are very reactive and very fuel. They shift back from diesel or fuel to gas. It created an additional demand. It's why this demand destruction is not energy efficiency. Having said that, it's also clear that what we are doing with spending $1 billion, other companies, I think, are spending money to save because you have a return. That's change of perspective. The question will be, does it really? Is it sustainable?
I remind you that we were on the world basis on an average energy efficiency of 1%-1.5% over the last 20 years. The scenario net zero requires almost 3%.
Four.
4%. Sorry, I was 3.
Mm-hmm.
I'm a friend with thirties -
Four in this decade.
No, but I mean, you don't change like that from 1.5 to 4, you know it's not true. It's why we think that, and by the way, the reconciliation. You know, 2023, the net zero scenario, oil demand is 93 million barrel per day. You look to the figure, and the IEA has announced that this year we demand might be as high as 102 million barrel per day. There is a gap of nine. This is a full debate about that story. Again, the endpoint is okay, but how do we reconcile the beginning of the curve with the reality of the planet? Nobody want to answer to us to that. By the way, I understand that Fatih Birol is preparing a new report. He told me that.
We were at the IEA. He's announcing a new report, I think part of the report before COP28 is to try to reconcile the first 10 years with the rest of the story. Let's wait to see. We raised that to him. You need to, if you want that scenario to be a reference for everybody, not just a reference for, I would say that we, which we are obliged to criticize because that doesn't fit with the reality on the short-term, then let's look to see. He told me that he will work on that, and he has announced that to the IEA minister. We were there last week. We'll see. We continue to state in our report that we need to new greenfield oil to fill the demand. We are a little stubborn on that.
By the way, you have an interesting chart on the report, where we put, we look to your part on the NZed and the APS. APS scenario of IEA is at 1.7 degrees. You look to the chart, you will understand it's true that this 0.2 degrees make a huge difference. It's also true that we have the impression that the world is probably more on one line than on the other line. Having said that, I hope the world will manage to get at 1.7 or 1.5 and not at 2.5.
It's a good one.
Any other question? Last burning question? No, apparently. Patrick.
We are like clocks. We said we made a bet, which now says it will last until 5:30. You are perfect guests.
You are perfect guests, and we can only thank you for that.
Thank you. For the conclusion, Patrick.
I think in conclusion, I think first of all, thank you for having participated to that event. I hope, I would like, we would like to by the way, to get some feedback. The fact that we have organized our presentation between the one in February, this one in March, which again is linked to the board works, which would be interesting after two years to have your feedback on the content of what we present to you. Again, I think we consider that, of course, we are in charge of the company, but that TotalEnergies is really an active player, growing our energy, being really active and more than active, really investing, in fact, in this energy transition.
Also, because it's our mission to continue to deliver the energy that people need. Thank you again for your attention and -
Thank you for everybody that participated to the report.
Yeah.
Whether they listen to us or not, a very warm thank you to everybody in the company that participated.
Thank you. Bye.
Thank you.