Ladies and gentlemen, dear investors, dear analysts here in Essen, and also out there on the screen, welcome to Next Generation Evonik. About four years ago, I remember well, we started our journey to build a best-in-class specialty chemicals company. Three years later, in 2020, we introduced our new divisional structure to you and had a deep dive into the divisions last year during our division spotlight series. Today, we are very happy to embark on the next phase of our strategic transformation together with you today. Therefore, it's my pleasure to welcome the Evonik board here with me in Essen. This is Christian Kullmann, our CEO, Ute Wolf, our CFO, and Harald Schwager, Deputy CEO and responsible for innovation. Our fourth board member, Thomas Wessel, Chief HR Officer and responsible for sustainability, sends his best regards.
He would have loved to be with you also today, but unfortunately, he had to attend employee meetings at our sites in Marl and Antwerp related to the intended divestment of the Performance Materials division, so he cannot be with us today. He will join us via a prerecorded video message later today. We have a full agenda today. We will start with the four presentations just in a minute, that should take about an hour. That is followed then by the Q&A session. I will give you some organizational details on that later. For now, that was it from me. I hand over directly to Christian for the first part of the presentations.
Thanks a lot, Tim, and also very warm welcome from my side. I'm really glad having the chance being with you here today. We, the board of management, are excited to host this year's Capital Markets Day as live event right here in Essen. A special welcome goes to our guests here in our headquarters. We already had a quick chat before the event and will for sure continue our inspiring discussions after the official end of the event. Of course, we also welcome our virtual guests out there in front of their screens, looking forward to discussing your live questions in the Q&A session. Ladies and gentlemen, let's dive right now into today's agenda. Before taking the longer term strategic view, we'll start with a more shorter term picture.
In detail, our Q1 results, as well as the current challenges in the European chemicals industry should be a little bit reflected in how we at Evonik are dealing with them. In other words, let me hand over to Ute because that is in fact her home turf. Ute, stage is yours.
Thank you, Christian, and welcome from my side as well. Despite all the challenges around us, we had a strong start into the year. In the first quarter, we again successfully compensated the significant increase in variable costs via our own price increases. Obviously, costs are arising further, so we are currently implementing the next rounds of price increases across all businesses. So far, the strong demand and our long-standing customer relationships enable us to further compensate the higher input costs. We see that the logistics situation globally remaining on strained levels still limiting our sales potential. We need to monitor closely the lockdowns in China and the impact on local and global supply chains. We can see first problems in some businesses to deliver products to our customers. However, so far, no broad-based impacts across the portfolio.
On the energy side, we have taken the decision to extend the runtime of our coal-fired power plants here in Marl in Germany. Of course, this is not a permanent decision, but it currently gives us flexibility and security in energy supply. With this step, we reduce our gas needs by 15% and increase our energy hedging rate to 95% for the year 2022. While obviously the risk of gas export stop from Russia remains imminent, we have locked in the energy costs for the current year, irrespective of further spot market developments. On the operational side, we continue to benefit from two Evonik specific factors. First, we expect amino acid prices to rise further. This is driven on the one hand by the ongoing tight supply-demand constellation and logistical challenges in the market.
On the other hand, we see a push in the supplementation of methionine and lysine in animal feed formulations to compensate the high soft commodity prices. Second, Performance Materials continues to benefit from the balanced to tight markets in the C4 chain and acts as a natural hedge against higher oil prices in our portfolio. We expect these two factors to continue at least into the second quarter. Also, on the demand side, we so far have not seen any major changes in the overall good trends of the first quarter. We confirm our outlook for the full year. Obviously, with the disclaimer that there will be no further escalation in the geopolitical situation or disruptions in gas supply from Russia, but baking in the scenario of a more cautious view and a macro slowdown already from Q3 onwards.
So far on the short-term perspective, now back to Christian for the longer-term strategic view.
Thank you so much, Ute. Ladies and gentlemen, starting with the look in the rear mirror, the last years have been, let's say, pretty challenging for the overall economy, for the chemicals industry, and for us right here at Evonik. It feels like the pace of all these new challenges is even accelerating. Three years ago, nobody would have dared to foresee that we are faced with a global pandemic, that we are faced with a war in Europe, that we are faced with the end of multilateralism as we know it, that we are faced with massively stressed global supply chains, and last but not least, with a severe energy crisis. Also, we at Evonik have not foreseen any of these events.
With a consistent execution of our long-term strategy, and maybe also with a little bit of luck, we have been as well prepared as we could have been and have managed the challenges pretty well so far. We've entered into the field of mRNA vaccines very early. We have strengthened our local exposure behind trade barriers via investments and acquisitions too. We have reduced our cost base, both in administration and our operating businesses. Nevertheless, or even more so, it is important to constantly review and adapt our strategy. If we needed one more proof, then the current energy crisis demonstrates the importance of sustainability. We at Evonik have a portfolio which is strongly geared towards the major sustainability trends. These sustainability trends, these products will be the winner of the future.
Future winners, in other words, in a world where sustainability and independence from fossil energies will play a decisive role. Now, ladies and gentlemen, it is the right time to take the next step on our strategic agenda and to depart into the next phase of our transformation. We are even more systematically integrating sustainability into all elements of our strategy, into portfolio management, into innovation steering, into capital allocation, and into our culture, and worthwhile to mention, into our financial and non-financial targets too. With this, we create what we call the Next Generation Evonik. You will hear today from us here on stage how this Next Generation Evonik will look like. Let me start with the portfolio element of our strategy. Over the last years, we have consistently shifted our portfolio towards a higher share of specialty businesses.
In the next phase of our transformation, we are now taking the step to fully focus on three, our three highly attractive growth divisions: Specialty Additives, Nutrition & Care, and Smart Materials. We'll exit Performance Materials, and the preparations for all three business lines are already ongoing. You will see good progress and some news flow already in the course of this year. We are aiming to find new owners in the course of the next year, which then results in the dissolution of the division Performance Materials. This decision, ladies and gentlemen, this decision to divest close to EUR 3 billion of sales, which is about 20% of our total portfolio, is based on our existing strategy and financial criteria. Our future portfolio will be more resilient, less capital-intensive, and more, definitely more customer and innovation-driven.
It will have around one percentage point higher top-line growth and around 150 basis points higher margins over the cycle. The decision I've informed you about is also a result of the very consistent integration of sustainability elements and KPIs into our portfolio management. The exit of Performance Materials will increase the sales share of our Next Generation Solutions by around five percentage points, and it will reduce our CO2 emissions by around 20% for Scope 1 and Scope 2. Ladies and gentlemen, and also our future capital allocation is strongly geared towards our sustainable transformation. We will use both the divestment proceeds from Performance Materials as well as our operating cash flow over the next years to invest heavily into the two core elements of our handprint and footprint. In other words, our Next Generation Solutions and our Next Generation Technologies.
You will hear more about these two elements today, and you will also learn why they are not only very beneficial for our handprint and for our footprint too, but also for our growth and for our returns. M&A will remain an active part to accelerate our sustainable portfolio transformation. We will target businesses with a strong overlap with our three existing growth divisions, which are characterized by above average growth, sustainability profile and returns. Chart 12 gives you an overview of the most attractive growth areas in our portfolio. These are our largest and most attractive investment projects over the next years. Expansion of our Specialty Additives platforms, investments into drug delivery and specifically mRNA technologies, biosurfactants, gas filtering membranes or specialty peroxide solutions.
All of them are characterized by returns, by returns that are clearly above our ROCE of 11%. This was, ladies and gentlemen, short and crisp, the portfolio part of the next phase of our transformation. Let me now cordially hand over to Harald for our Next Generation innovations, and after that, Thomas will give you, by the recorded message, some insights into our sustainability strategy before Ute will summarize the impact on our financial targets. I will be back for the final wrap up. With this, I cordially hand over to Harald.
Danke, Christian. Welcome to everyone in the room and welcome to everyone on the screen. Innovation is a key pillar for future success of Evonik as a pure play specialty chemicals company. It is how we maintain our competitive edge. It's the basis for our sustainable growth. Sustainability has a double meaning here. Continuous sustained growth of our innovation pipeline and innovation sales. Second, growth mainly through green and sustainable products and processes. The mission of our RD&I organization can be derived from Evonik's purpose, with main contribution to beyond and tomorrow. It leads to innovative products and process solutions that enable sustainable growth. The chemical industry is a key driver for more sustainable economy. We need completely new products and processes. We need digital and connected solutions, and all of this in ever shorter innovation cycles, and last but not least, under increasing regulation.
To meet these challenges, we have decided to realign our innovation activities in 2020. The global RD&I function is now even more closely integrated into the company's operational business than before. We have fully integrated sustainability into all RD&I processes as guiding principle. Let's start with how we steer our innovation portfolio. Basically, how we allocate our resources. In this context, resource primarily mean an R&D budget of above EUR 450 million per year, more than 2,500 employees. This scale is a clear differentiator for us. Steering happens through the RD&I council, which is composed of the CIO, our Chief Innovation Officer, and all division heads, and is chaired by myself. Sustainability is fully integrated into decision-making processes here. We follow a stage gate process and only if the overall evaluation is a positive one, we start an innovation project.
We apply our well-established PARC assessment logic to identify handprint improvement potential. We consider a variety of environmental factors to identify footprint reduction potential, such as anticipated greenhouse gas emissions or energy and water use. This leads us to focus on dedicating our R&D budget mainly to Next Generation Solutions and, of course, Next Generation Technologies. You should all be familiar with this slide you see on the screen, our six innovation growth fields by now. I will keep it very short here, just three impressive numbers. Growth rate 40% in 2021, resulting in more than 500 million new sales achieved, well on track to achieve 1 billion by 2025. The innovation process does not stop once a growth field has first commercial sales and success. Let me demonstrate that on the next slide using the example of membranes.
The development of our gas separation membranes is a good example of how teams within Evonik work together, how innovation is a continuous process. 2008, ladies and gentlemen, first idea for this product developed in Creavis, our strategic innovation unit and business incubator. Creavis did not work in a vacuum. It involved the business High Performance Polymers from the start. The business then took over the project in 2010 and started commercialization. The initial focus was on upgrading biogas, for example, biomethane. The cooperation between the various R&D functions within Evonik did not end there. Creavis is still involved today. Further innovation took place mainly through the development of additional applications, such as helium or nitrogen filtration. Membranes are very successful, with sales in the mid-double-digit millions in 2021 and continuing to grow at a CAGR of around 30%.
New products are constantly being developed. The potential is enormous, for example, for the new upcoming hydrogen economy. More on this topic later. In most people's mind, innovation is about new products. Process innovation is as important for us in driving the company's profitability and sustainability forward. Let me highlight just one of the three examples from this side. SAM 3D stands for Evonik's Competence Center for Simulation and Additive Manufacturing. It focuses on the efficient design of customized chemical reactors for our production plants. They are designed using computer simulations supported by artificial intelligence and manufactured with high-quality 3D printers. Advantages, almost no restrictions in complexity, less material consumption, compact reactors and smaller separation units with lower energy consumption, less capital intensity, and therefore, of course, at the end, fewer emissions. This enables us to test process improvements before upscaling.
The first part of my presentation was very much about operational, more shorter term innovation. Let's now move on to the longer term perspective. Creavis has been our strategic innovation unit for more than 20 years. Now it has been positioned even more clearly as business incubator to develop transformative new businesses beyond the current product and market focus of the operating units. Always with a clear business and use case in mind. It will position itself even more strongly as a pioneer of sustainable innovation by focusing exclusively on next generation solution and zero or low carbon dioxide emissions. Creavis takes a cross-sector interdisciplinary approach. We partner with universities, with startups, with industry partners, ideally within an entire value chain or even better, a value cycle. The target for all Creavis project is commercialization within a five to 10 years timeframe.
We are working on our innovation pipeline beyond today's innovation growth fields. These projects are clustered in the Creavis new growth areas. This is the long game. This is about identifying the key themes of the future, such as hydrogen, circularity, prevention, and well-being, all of which are linked to the four sustainability focus areas. With the proven success with the innovation growth fields, we are confident that we will focus on the right topics also beyond 2025. Let's look at a specific example which supports the hydrogen economy. There are high hopes for green hydrogen being a renewable resource in the energy transition, both as a fuel for industry and transportation, and as a key raw material for the chemical industry. Green hydrogen is still much more expensive than conventional hydrogen.
To overcome this, we need sufficient low cost electricity from renewable sources and efficient electrolysis. Evonik has developed a novel anion exchange membrane, AEM, that is a breakthrough for the electrolytic production of hydrogen. The membrane was developed jointly by researchers from Creavis and experts from the High Performance Polymers business line. Electrolysis with AEM has clear advantages compared to other electrolytic processes, resulting in around 20%-30% lower CapEx and 10% lower OpEx. The market potential is enormous. In our base case, the market potential is EUR 1 billion. We have the leading AEM technology, so sales potential for this membrane alone is about EUR 100 million by 2030. Together with selected partners, we are currently working on the commercialization of our membrane to help AEM technology achieve a breakthrough. The production is currently being ramped up at Creavis to a continuous process.
First sales are planned for the end already of this year. Our innovation activities are complemented by our venture capital activities launched in 2012. With designated funds of EUR 250 million, we made 46 investments in startups and specialized venture capital funds over the last ten years. On average, our venture capital team reviews more than 1,000 startups per year, and finally invests in less than 1%. For example, in 2021, we added 10 new investments to our portfolio. There are mainly three benefits. In a first step, startups provide fast access to innovative technology that support us. In a second step, we might even integrate the startups into our operating businesses. Two companies, Structured Polymers and JeNaCell, have been fully acquired by Evonik. We are today generating sustainable earnings. In a third step, we might then finally exit our investments.
To date, we realized seven exits from our portfolio. A very recent example is the exit of FRX Polymers at the TSX Venture Exchange, which most probably will happen in May. Besides the strong strategic benefit for Evonik, we target an overall financial return of twice the invested capital. Already today, we achieve significant financial returns and expect an evergreen situation by 2023. Meaning that our exit proceeds will entirely finance the new investments. Venture capital is also a key element of our sustainability strategy. To this end, we have launched a new Evonik venture capital fund dedicated exclusively to investments into technologies towards carbon neutrality. Investments are made with the primary aim of achieving CO2 mitigation by reducing and eliminating emissions and promoting carbon sequestration. We intend to make 15-20 investments worldwide over the next five years.
The Evonik Sustainability Tech Fund has an investment volume of EUR 150 million in addition to the existing EUR 250 million, and we expect to close the first investments within the next weeks. To summarize, the chemical industry is a key driver for more sustainable economy. Innovation is a key to success. At Evonik, our RD&I organization is well-positioned internally and well-connected externally to achieve our goal of sustainable growth. Sustainability is fully integrated into innovation portfolio management, as can be seen in our innovation growth fields and the Creavis new growth areas. In addition, venture capital is invested in a sustainability tech fund to capture additional business opportunities. Thank you for listening, and Ute.
No, Thomas first.
Thomas will be video message next, which will now play.
Like that. There we go.
Welcome also from my side. First of all, my apologies for not being able to attend in person today. Related to today's announcements around the exit of our Performance Materials division, it is my role as CHRO and labor relations director to attend information meetings with our employees in Marl and in Antwerp, which we unfortunately had to move on short notice. Nevertheless, it is my pleasure to guide you through the sustainability pillars of our strategic transformation roadmap with this prerecorded video message. As Christian already pointed out on our transformation into the Next Generation Evonik, we are now fully integrating sustainability, and that is why we are committed to further grow the portfolio share of our most sustainable products, our Next Generation Solutions, and to strive for constant improvements of our environmental footprint.
It also means that we set the right governance and adhere to the highest reporting standards with continuous improvements year by year. Our sustainability approach is based on taking action in four sustainability focus areas that are based on the United Nations SDGs. It is about making our impacts and contributions in the fields of fighting climate change, driving circularity, safeguarding ecosystems, and ensuring health and wellbeing. How do we actually integrate sustainability into our strategic management processes? We do it with two sophisticated tools that we have developed and optimized over the last years. Our portfolio sustainability analysis on the handprint part and our Emissions Data Cube on the footprint part. We have developed our portfolio sustainability assessments together with other major players in our industry on the platform of the World Business Council for Sustainable Development.
In our Emissions Data Cube, we assembled all available data into a single point of truth for baselining, calculating, and forecasting carbon emissions above all scopes and for all of our production sites worldwide. With these two tools, sustainability is ingrained in all aspects of strategic decision-making, portfolio choices, innovation priorities, and most importantly, capital allocation. Let me now give you some more details on our portfolio sustainability assessments and how we have derived our handprint target, the new Next Generation Solutions goal out of it. We are using the PSA methodology to analyze all of our portfolio. Only best-in-class products that come with a sustainability benefit clearly above market reference qualify as Next Generation Solutions. If there is just any red flag in just any of those seven signal categories, the product will be ranked as challenged or transformer.
The main findings of our sustainability analysis are. Evonik generates 91% of sales with products and solutions whose sustainability performance is at least in line with the market reference. More than 37% of our sales come from products rated as leaders or drivers, which together makes a class of our Next Generation Solutions. Since they showcase above average performance and growth rates, it may not come as a surprise that we aim to substantially grow the portfolio share of such products to at least 50% of sales by 2030. Our three main levers to achieve this are, firstly, and this is the most obvious one, existing Next Generation Solutions with their superior sales growth rates will take a higher sales share over time. Secondly, growth is generated by innovation and our new growth areas, which Harald just presented to you.
Meaning new products qualifying as Next Generation Solutions will squeeze out older products with a lower sustainability profile. Lastly, challenged products or transitioners will be exited or reformulated. Since Evonik operates in a dynamic environment where technologies and regulatory requirements are subject to change, the targeted portfolio upgrade will be a matter of constant evolution and permanent improvements. So far on the handprint, let me now jump to the footprint part of our strategy. Since 2008, we are reporting an extensive overview of greenhouse gas emissions from the extraction of raw materials through production to disposal of the products, thus covering all scopes. As you all know, working on the reduction of Scope 3 emissions remains a tough nut for everyone in our industry. A lot of it goes beyond our direct control and is influenced by a wide variety of external factors.
The availability of low carbon feedstocks remain a limiting factor here. We are acting on several levers. With raw materials being the biggest contributor, we are executing several projects with our key suppliers and customers. The story is also about green opportunities in our portfolio. For example, we have kicked off a business by business analysis to assess where the market pull for greener products is strong enough to overcompensate the higher abatement cost for these products. There's also the way of giving certain business into other hands, allowing for backwards integration, better captured carbon opportunities or asset transformation. First priority in the next years is to achieve the highest possible CO2 savings for the lowest possible costs. This mean concentrating on Scope 1 and Scope 2 emissions reductions primarily. We are fully committed to the Paris Agreement, becoming climate neutral by 2050.
This is of course not new, but we have news today. First, we have set new targets. Second, we have joined the Science Based Targets initiative. What does this mean more precisely? We are committed to significantly reduce our CO2 emissions by -25% for Scope 1 and Scope 2 by 2030. This is equivalent to a well below two-degree target in the first step. Of course, being committed to net zero by 2050, this means our aspirations are really higher. Therefore, we will revalidate our targets as soon as we can for 1.5-degree scenario in close alignment with our business. To achieve our ambitious target, we see three main levers of emission reduction. First, exiting coal-based energy production. Second, boosting our Next Generation Technologies. Third, switching to renewable energy. Each element contributes by around 1 million metric tons of CO2 a year.
With respect to our tight agenda today, I will focus on the second lever here, our Next Generation Technologies. In the course of setting up our Emissions Data Cube that I presented to you earlier, we also performed an in-depth analysis of Evonik's greenhouse gas sources. We started with a pilot project at our Antwerp site. Here, we identified the levels with the highest energy efficiency and the best cost effectiveness profile, so with the highest environmental and financial returns. We identified, for example, well-known measures like heat exchangers for improved heat integration. We also picked innovative waste heat upcycling tools like high temperature heat pumps or mechanical vapor recompression. Of course, we also got some valuable insights on complementing redesigns of some of our processes. Based on such Next Generation Technologies, we will be able to reduce emissions by 1/3 in Antwerp.
What is even more impressive and good news, all of these measures and investments come with a positive net present value, meaning they also generate significant OpEx savings. Ute will elaborate on that a little bit later. The findings at the site in Antwerp serve as blueprint for rolling out analysis and measures throughout the group. This is delegated to a cross-functional project under the name EAGER. The full roadmap for all our sites is to be in place by end of 2022. By the way, EAGER will not just be focused on carbon mitigation, but will also identify potentials in water and waste reduction. Because combating climate change is not everything, we also keep a close eye on other urgent environmental challenges as defined in our sustainability focus areas. Take, for example, the important topic of water.
Site-specific action plans were drawn up to ensure effective preventive measures. In parallel, we are currently elaborating new water reduction targets. They will be based on the data of our main production sites collected by the EAGER project team. I am confident we will be able to announce them with our next sustainability report in March next year. The same holds true for new waste targets. To make sure we deliver on our high sustainability ambitions and targets, we have integrated ESG aspects even more closely into our governance framework. For the governance part, we have now lifted our well-established sustainability council to board level. It is supported by sustainability circle involving all functions and operative businesses. On the remuneration part, we will now integrate sustainability targets into our management compensation scheme, and Christian will tell you more about it.
Coming to a close, let me summarize the key points to take away from my presentation. With our sustainability focus areas, our portfolio analysis, and our Emissions Data Cube, we have set a strong foundation for fully integrating sustainability into our strategic management processes. We have set new ambitious target for both handprint as well as footprint, and we have lifted our ESG governance to best-in-class level. Sustainability is an essential part of how we do business, and we will be ever more so in the future. This is what we summarize with our purpose Leading Beyond Chemistry to improve life today and tomorrow. Thanks for your attention, and I'm glad to pass on to Ute live in Essen.
Yeah. Finally, let me put our portfolio, sustainability, and innovation strategy into a financial perspective. What does it mean for our capital allocation, and how will it be reflected in our financial targets? We launched the Leading Beyond Chemistry strategy in 2017. Since then, we have been consistently working on portfolio, innovation, and culture. This is clearly paying off. We established a very good promise and deliver track and, of course, a very strong support of that was our improved performance culture internally. When we look at the numbers, we see we delivered a strong earnings growth of 5% CAGR since 2017, and an even stronger free cash flow growth with a 15% CAGR. In 2022, despite all the challenges we described earlier, we have very specific positive, Evonik specific positive drivers.
First of all, our resilient businesses in Nutrition & Care, like animal nutrition, healthcare, and Care Solutions. We have strong market positions and cost positions across the whole portfolio, and we have strong demand for climate-friendly solutions in component insulation, High Performance Polymers, silica silanes, crosslinkers or additives, just to name a few of them. We are confident to see further on earnings growth, not only this year, but also in the years to come. Evonik has significantly improved its cash conversion rate and is today a real cash generative businesses. Let me now talk a little bit about the sources and uses, as financial people say, of our cash. First of all, our free cash flow is around EUR 1 billion with the cash conversion rate of 40%. In a normal environment, that's more or less the level for our free cash flow.
On top, we will have inflow from the divestment of Performance Materials over the next two years. We will re-employ this capital to drive our green portfolio transformation, both into our handprint and footprint. Until 2030s, so over the next nine years, we will be investing more than EUR 3 billion in our industry-leading sustainability products, so what we call the Next Generation Solutions, and around EUR 700 million into the Next Generation Technologies. That will be complemented by targeted M&A, as you have seen that in the last years, very, well-selected, bolt-on acquisitions, for our businesses. Of course, overall, there is an unchanged high priority for an attractive dividend, both in the level and the development over time.
You have seen that we increased the dividend last year, so I think that is also an important path for the future to develop the dividend from today's level on. As a foundation of that, a solid financial investment-grade rating. Yeah, when you hear about billions of CapEx, some of you might raise your eyebrows. Of course, our disciplined CapEx approach does not change. Up to now, we spent around EUR 900 million of CapEx with a rough 50-50 split between growth and maintenance CapEx. To drive our transformation into Next Generation Evonik, we will invest around EUR 350 million per year into our Next Generation Solutions. That is around 80% of the growth CapEx.
On top of the 900 million, we will see between EUR 50 million and EUR 100 million per year for footprint reduction via our Next Generation Technologies. That will ramp up now over the next decade. The budgeted numbers for 2022, of course, will not change. Please note these numbers still include around EUR 65 million for Performance Materials. I want to outline again, green investments will have to be high return investments. If we look at the Next Gen Solutions, beyond the superior sustainability profile, they also come with a superior financial profile. Harald gave you some examples in his presentation. We also have above average growth in these products, margins and returns. We are already including the greenhouse gas pricing as part of the investment calculation. The same is true for our Next Gen Technologies.
All planned investments into lowering our carbon emissions are NPV positive projects. They are leading to significant OpEx savings, as they are leading to a reduction in energy and a more energy-efficient process. The earmarked EUR 700 million of CapEx are expected to contribute notably more than EUR 100 million in OpEx savings per annum. This implies a return of around 15%, so exactly the usual level for investments. This concludes the first part of the presentation. Now let's move on to our financial targets. Where do we stand today? You see there is a lot of green ticks in the boxes here on this chart. We have made good progress in many of those EBITDA margin. We have a little bit of a structural issue as Performance Materials has a structurally lower margin than the rest of the group.
With ROCE, we made good progress, but of course, you know there is still a lot to do. If we look at those targets, they are still valid and are still ambitious target for the next years. For the future, we will now exclude Performance Materials when we talk about our financial targets. The most notable change is the volume growth target that is being replaced by an organic sales growth target. That, of course, reflects the higher specialty character of our portfolio after the exit of Performance Materials. Let's now move into the specific targets. Let's start with organic sales growth target of higher than 4%. If we look back the last years, our growth divisions already delivered 4% of sales growth per year.
The target is now to outgrow that level, especially with higher growth aspiration from the Next Gen Solutions and next level innovations. Pricing power will be more into focus. We are in the midst of distress already in a high inflation environment. Also structural improvements will have to be implemented in the future. The sustainability focus and the innovation power will play an important role both for volume and for price. Upgrading the sustainability profile of our existing products will drive volume growth as well. One example is the spray foam additives in Specialty Additives. Of course we will have completely new products that step by step will drive the volume growth, may also in the membranes business and our sales targets from R&D point a little bit into the direction.
If we look at EBITDA margin, you see with the exclusion of Performance Materials, we make a material step into the right direction. Of course, there is still more to do. If we look at the improvement levers that we have, it's very much about product mix, so the new solutions that bring better margins, higher value to our customer. One example is our LNP. Christian talked about it in his introductory notes. Another one is, of course, our innovation growth fields in 3D printing and other applications that we have talked about. Another important part when it comes to profitability is the portfolio mix, the product mix. If we look at one example, Care Solutions, they have very consistently and very effectively changed their product mix over the years, phasing out the low margin products and more focusing on the specialties.
On one hand improving the profitability, but also on the other hand, really getting on a very impressive growth trajectory. If we look at innovation also here in Care Solutions, we have very good innovation with our biosurfactants. Another important factor is, of course, our cost efficiency, cost discipline. We have implemented factor cost compensation now in all of the units in the group, not only the operating business, but also in the administrative part of the group. From that point of view, we compensate more than EUR 150 million per year in factor cost increase. Another factor in this is the supply chain optimization that we are working on, and that improves the profitability over time.
Also the employed capital, and that brings me to ROCE, where I think we still have something to do, and we will have in the first round a slight negative impact in the short term from divesting Performance Materials, as of course, Performance Materials did not have a lot of growth investments in the past, so the asset base is relatively low there. We have the positive levers in our hands also for the ROCE development. CapEx discipline, I think, is one very, very important part of that. We have established that over the years. You see from how we go, we structure our CapEx capital allocation that will be continued in the future as well.
In the businesses, we are shifting towards more asset light business models, so the CapEx projects tend to be not as big as in the past, so that helps as well. Of course, large projects from the past are starting now to deliver the returns. I think the most prominent example is our PA12 plant here in Marl. Yeah, to sum it up, we have improved our cash generation. That is a very good basis together with the divestment proceeds that we can invest into the green portfolio transformation, enhancing further our handprint, reducing the footprint. These value-generating projects support not only our sustainability profile, but even more our financial profile, our financial targets. We can confirm today the 2022 targets and also the midterm targets despite the challenging times. All the levers are in our hands.
With that, I hand back to Christian for the wrap-up of the presentations.
Thanks a lot, Ute. Thanks a lot, Harald. For me personally, it was great having the chance to listen to my colleagues because it has enhanced my confidence that Evonik Industries is on a pretty good path into the future. We call it Next Generation Evonik. From my side, I do hope, even a little bit more. I hope that I could have the feeling of being convinced that you do now have a pretty good picture about what Next Generation Evonik will look e. Harald told you how sustainability is fully integrated into our innovation portfolio steering. That our innovation growth fields are pretty well on track. Pretty well on track to achieve the target of more than 1 billion additional sales by 2025. In a very short time, short period of time, short duration.
How Creavis, with their new growth areas, is already working on an even brighter future. Thomas explained how we'll grow our Next Generation Solutions sales share to more than 50% and reduce at the same time our CO2 emissions by 25% until 2030. Finally, Ute described how we generate value with our investments into Next Generation Solutions and Next Generation Technologies, and how our strategy execution is resulting consistently and permanently in progress toward our financial targets. I now will conclude on the cultural element of our strategy because, ladies and gentlemen, it is all about people. Having said so, it is all about our employees. Our purpose and our values, our inspiration and guiding principles of our culture.
While safety, that goes without saying, has first priority and is the foundation of everything we do, diversity is becoming more and more critical for our economic success. Our aspiration is to understand customer, their specific needs and challenges in all their complexity, and to offer them the best possible solutions. To be able to do so, diversity is, keep it short, indispensable. By increasing diversity and managing it properly, we create an environment that provides space for new impulses and helps us to overcome boundaries, learn from each other, and consider as many perspectives as possible. We have set ourselves, in this respect, specific diversity targets, especially for the two most critical areas. First, gender, and second, the intercultural mix. Diversity is not only a numeric game for us, it is a matter of culture.
The improvement of our diversity culture is top of the agenda. Top of the agenda of the entire Evonik management. With the top management, ladies and gentlemen, that serves as a prominent role model. With executives who have the necessary understanding and self-reflection to manage diversity. With employees, I've mentioned before, who appreciate different ways of thinking. Driver of this process is the Diversity Council, the committee that sets the strategic framework and is composed of members of the executive board, the divisions, regions, and functions. All our measures regarding maximum diversity follow an integrated approach. We address the issue strategically, culturally, and with an eye toward our processes. Ladies and gentlemen, this brings me to my second but last chart. You've heard a lot today about how we are consistently integrate sustainability into our strategy and all of our processes.
Finally, we will also walk the talk by integrating sustainability into our management compensation scheme. The new system has to be approved at our AGM this year. The details will then be worked out until the end of this year. It would make, from our point of view, very much sense to integrate, for example, our two sustainability KPIs into our long-term incentive. The sales of Next Generation Solutions, as well as the CO2 emission reduction. This is my last chart, and I would hope that I do not even need it anymore. Over the course of the last hour, it should have become very clear why Evonik is an attractive investment and will become even more attractive as we depart into the next phase of our transformation. Let me kindly, cordially wrap up the key messages of today.
First, we have established a strong track record of strategic and financial execution over the last four years. We are the enabler of sustainable change with a portfolio of attractive products centered around our four sustainability focus areas. Second, sustainability is fully integrated into our three strategic levers, portfolio, innovation, culture. By the end of the year, our portfolio will be focused on our three attractive growth divisions, and we will exit Performance Materials in the course of 2023. Fourth, we will invest heavily into our green transformation, especially into our Next Generation Technologies and Next Generation Solutions. All of this, ladies and gentlemen, will drive us towards our ambitious financial and non-financial targets, and they will be integrated very consistently into our management compensation scheme.
With that, thank you for your interest and your time so far, and we are now happy to take your questions if there might be some. Thanks a lot.
Thank you, Christian. I'm sure there will be questions. For me, just for the start of the Q&A session, a couple of organizational remarks and details. We will start with our guests here in Essen for the Q&A session, so they will have the opportunity to ask the first questions by just physically raising their hands. I know this might sound crazy after two years of virtual meetings, but just raise your hand and we'll pick you. I would ask you to limit your questions to one to two, and so that after that we still have the opportunity to get some questions from the virtual guests and the virtual audience. Also there, I would ask you to limit in a first round your questions to just one per person.
For the virtual audience, you see some icons on the screen, a camera, microphone, and a hand again. I think I don't have to explain that after two years of pandemic. At the moment, they are all gray, so you can't do anything. As soon as the Q&A session starts, they will turn to black and are enabled then. There you can click on the black hand to register for the queue. Once you hear your name, please also enable the camera and the microphone, and they will then turn a deep purple, our favorite color. You can ask your question here live into the audience. Before we start the Q&A session, just a side remark, we will also have a short feedback survey available in a couple of minutes.
You will see the link in the conference tool and also on the website. We would appreciate your feedback on the Capital Markets Day afterwards. Yeah. With that, let's start the Q&A session. The first question comes from Martin Roediger.
Thanks, Tim. Martin Roediger from Kepler Cheuvreux, you mentioned already that you want to prolong the use of your coal-based power plant in Marl and reducing the gas need by 15%. You have several other production facilities in Germany. My question is, how much do they depend on natural gas as energy source overall, and what is your best guess about the impact on earnings in case there is an embargo on Russian gas? We have heard a peer of yours, some kilometers up the Rhine River, did this exercise already a few days ago. Thanks.
Thank you, Martin. Christian, you take the first? Yeah.
I take the first step, and then I will hand over for more precise details to Harald but before then, Mr. Roediger, have a look. If it would come to an embargo in respect of being provided with a sufficient amount of gas, and it doesn't matter at all if it would come from the Russians or from the Europeans, first question would be, what is about our suppliers? Would they will be able to stand the pace of such a challenge, such an impact? To be honest, as of today in Germany, thinking about the complexity of German industry, taking this in consideration, nobody could. Nobody could judge upon it. Second, think about not only the supply chains but in respect of growth value chains. What is about our customers? Would they be able to stand the pace?
Are they willing to address their issues, their concerns about such an embargo to us beforehand? Even if they would, they could not because it is not possible. Reason for this is very simple. You know, here are some rules and regulations by the official authorities who block and hinder them. Third, now think about Evonik. We are prepared in as such that we do have the chance to make use of alternative energy supply if it comes to a gas embargo, and that is what you have mentioned, for example, by restarting our steam coal plant in Marl, for example. There are several other chances and opportunities we are prepared to make use of.
To sum it up, from my point of view, and as you know, I'm also the president of Chemicals Association in Germany. From my point of view, it is, as of today, definitely really very, very difficult to give you a precise number which is well based on facts and not on assumptions and not on best guess what it will mean. Because you have to contribute, not only to take into consideration, you have to contribute also to the strategy, to the opportunities, to the options your customers, your suppliers could make use of. Don't forget about the utilities in this game, because one key effect for all of this is that there is enough in the pipes also that there is enough, let me say, pressure in or pressure on. Having said this, giving you.
Trying to give you, with very few words, something like an overview, I would ask my very honorable colleague, Harald, to give you some more details if needed and possible. Harald, may I hand over to you?
The framing by Christian. What we very quickly did is, of course, we set up an intensive working group looking to not only the German sides but all the European sides, what could be an impact. Of course, if there would be an embargo from Russian gas, that would not mean that there is no gas available. What we can't answer today is, of course, what relative share of gas availability would arrive at certain sites. Because, of course, the pipeline interconnection in Germany don't allow that you can supply to each and every site the same volume because probably you all know that, it depends from where to where the gas stream typically goes and from where the gas comes.
In other words, in the south of Germany, we will have a different situation than in the north of Germany, and there we will have a different situation than in Antwerp. What we did is we investigated on each and every site what alternatives do exist, and we already as a Board decided that we take precautionary measures, and they are already in implementation. For example, we can substitute on some of the sites the use of gas for producing steam and transfer it, for example, into oil. Oil use is an appropriate tool. That's going on site by site. What unfortunately most probably will not be a possibility due to antitrust matters is that we could determine, for example, to which value chain we would give priority.
Because here we are not probably, and this is in discussion, that is what Christian just mentioned, we are not allowed to discriminate. No? In other words, we will need to do everything if we get 80% of deliveries when we need to reduce everything by 80%, if there is no different decision by the antitrust authorities in the months to come.
Thank you very much, Christian, Harald, for the answer. Next question comes from Thomas Swoboda.
Yes. Thomas Swoboda, Société Générale. Thank you for taking my two questions. They are related. Knowing now the current situation and the high energy costs now, would you again take the decision to invest in PA12 value chain in Germany? Or would you rather have considered a different location? Related to that, in case energy costs should stay at an elevated level in Europe, meaning higher again versus the U.S. and probably even higher versus China, would you still be happy with your portfolio, or would that require a little bit more thinking about the mix? Thank you.
Okay. Thanks a lot for your questions, actually entitled, no doubt about. First, for PA12, Marl in the deep western part of the Federal Republic of Germany is the best place for us to be there. Why? First, we have a very highly educated and definitely encouraged amount of employees down there. They have rolled their sleeves up, and due to the pandemic, due to all those constraints and restrictions, or better, irrespective of all those constraints and restrictions, they have done a brilliant job. Don't forget that a good amount of our customers is here located in Europe. Second, in respect of the portfolio transformation process, fair point, and that is one of our reasons why we have decided to say, let's focus on specialties because they are less cyclical, they are less capital-intensive.
Instead of saying, we talk about products to market, here we talk about solutions to our customers, and we are convinced. That is why we have dared to give you the progress in respect of our strategy here today. We are convinced that next steps in our strategy in respect of portfolio shaping and focusing on next-generation solution products with the investment, with the related benefits we have mentioned today, we are for this pretty well prepared. Very few words, but I guess the message is crystal clear.
Again, Harald, some follow-up words from you.
Maybe just as a complement to the framing of Christian. One aspect certainly is we are in a completely different investment environment today. In other words, the CapEx volume would be a completely different one in today's world because, for example, steel is at a different level than it was. To answer your question actually is almost not possible. What is clear, our competitors are in the very same situation. The other PA12, 11 producers are sitting in the same energy cost environment. That means the system competition of the product and the applications where we are in still is metal, of course, is still to be substituted in, especially in automotive application.
At the end, PA 12 will win the race for the higher fuel efficiency in the years to come due to high energy costs. The higher the energy cost, the better for the application at the end. That's not what I wish for, but if it stays there, good for the substitution.
Thank you very much. Next question. I don't know who was next. Sebastian, you want to take the next one?
Yes. Thank you. Sebastian Bray of Berenberg Bank. Thank you for your hospitality today. I just have two questions, please. The first is on the divestment or the planned divestment of the C4 chain. Why is JV the preferred option? When I've looked at this in the past, my thinking was that the degree of backward integration was always small enough that Evonik could get away with divesting the asset as a whole. Why would Evonik want to hold on to a portion of this asset post-divestment? My second question is also on portfolio management. At the start of 2021, Evonik split its old services segment into technical and infrastructure and enabling support and other functions.
Does the Next Generation Evonik also include all of the Technology & Infrastructure provided for external parties as it stands, or could divesting this be a way of increasing the rate of improvement in ROCE? Thank you.
Maybe if I take the second one, and then I would hand over to Ute for the first one. On the so-called TI, technical infrastructure is a core element of the company. It provides our businesses with a high standard of services, and that is reason why on our way to become best in class specialty chemicals company, we do desperately need their competencies to serve and to better the quality of our production facilities all over the world. Let's call it metaphor, it's something like a backbone holding the body of Evonik and keeping it together, filling it in. With having said so, I do hand over for the first question, for the most prominent question, to Ute.
Yeah. Thank you, Christian. Yeah, I think the C4 business is a good business, has a lot of good technologies, also innovation and technologies. It's clear we do not have the financial framework to invest in that, so that's why a JV of course gives more freedom on that side, and we can still participate in that development. On the other hand, it's very much interlinked into our two big sites in Marl and Antwerp, so a JV might also help in the separation process step by step. You know that we have a lot of own use in butadiene as well. These are all elements and arguments that speak for a JV. That's why we said we strive for that.
How it will end up in the end depends on the market, pepends on the offers we have, but these were the thoughts in our head when we said we go for JV option first.
Okay. Next question, Oliver Schwarz.
Oliver Schwarz, Warburg Research. May I come back to the CapEx outlook, please? Can you remind us how much of your CapEx in the past went to projects in relation to Performance Materials? Secondly, I guess connected to that and what was just being said is looking at the absolute level of CapEx, there seems to be little leeway for, let's say, a prolonged period of inflation. Would that be a fair assessment? Would you be willing to invest more if inflation levels remain, let's say, elevated for the next couple of years? Or would you rather stick to the absolute number you provided in the press release? Thank you.
Yeah. I think PM is the EUR 65 million that I mentioned also before. From that point, that is the level. Yeah, if we talk about CapEx levels, that is always also a function of the cash generation, no? If we had a crisis, less cash generation, of course, the CapEx number would be also assessed very strictly and most probably also decrease. From that point of view, when we think about a scenario with inflation, we are able to pass those inflation on in our prices, in our contribution margin that which variables increase then the cash flow, so gives some room also for CapEx. Of course, not one to one, but to a certain extent. On the other side, I think inflation is one thing. What we see is also availability and doability of projects.
I think that's, maybe today the even bigger problem. From that point of view, I think as of today, we can work with that scheme. Of course, here and there you have cost increase, but, this is something we are used to work with, and can handle that in the future.
Okay. Thank you. Next question was from Andreas Heine.
I would like to come back to the capital allocation, the M&A and dividends specifically. It's obviously more difficult to get to a nice return on capital employed with acquisitions. The reason why the ROCE is not that high is also because of the acquisitions you made. In recent years, you have done rather less in acquisitions, smaller ones, more dedicated ones rather than the larger ones. With the proceeds you will receive and the free cash flow you have
You could go for more. I would like to know whether you would have that in mind, or whether what we have seen in recent years is more in the agenda. Also on capital allocation, you said there is more room for the dividend. Could you be a little bit more precise what you think is the free cash generation? You have over EUR 1 billion, how much of that might be then reserved for the dividend, and how the dividend paths will look like in the next eight years?
I take the first, Ute takes the second. In respect to M&A, I guess I assume it's a little bit unfair of you to focus on size. M&A for Evonik means not talking about size. Size is not a criterion for us. It is about how does it fit to our portfolio in respect of we stay put by doing M&A to strengthen our already strong positions exclusively in our three key core future growth divisions. First. Second, you should have in mind that we, in respect of our geostrategic approach, want to balance our portfolio much more out in respect of having something like an, a deeper footprint in the United States of America. That is what we have already reached. Better to say, already gained by doing M&A there. Here, we think about Porocel and catalysts. Here we think about PeroxyChem.
Here we think about silica of Huber. Here we think about Specialty Additives of Air Products and so on and so on. We will stay put to our decent and disciplined M&A approach, what we called bolt-on, in respect I've tried to explain it to you. Second, it is not about size. It is about quality. It is about profitability. It is about our assumption, our evaluation about future growth. It is about strengthening our strong positions in markets where we are top of the tops already. Why? Here in those markets where we want to strengthen our strong positions, we know the customers, we know the competitors, we know the markets, and we know the technology positions of our competitors, which translates into that beforehand reduce any kind of integration risk to the utmost.
On the other side, we enhance and lift up synergy potentials. That is what you have seen, observed, and analyzed in the past. That is, ladies and gentlemen, what you could expect from us in the future. With this thinking about future, I think about Ute, and now I will hand over to Ute.
Thank you very much. Yeah, the dividend also follows, of course, the earnings per share. From that point of view, our approach is we need to develop the dividend step-by-step with increasing earnings, with, of course, step-by-step increasing cash flow. I think an ideal path would be a little bit of an increase every year. You know, that is maybe not possible every year depending what kind of overall geopolitical or economic environment we have. I think that is the idea we have, steadily and yeah, increasing and developing the dividend.
Thank you very much. Yeah, yeah. We also have [Mihaaya]. There we go. A couple of further questions. I don't know who was first. Sam, you want to go first? Sam Perry?
Sam Perry from Credit Suisse. Just wanted to ask a question on your organic growth targets. If I look at what you achieved ex PM from 2015-2021, it's already at the 4%, and that included sort of depressed years through COVID and auto in 2019, and you already get to the 4%. Where do you think you can get to in sort of a more blue sky scenario? I guess the same question for margins as well.
All right. Ute?
We have more than 4%, so it's clear the 4% is not the target. I think if you look at our markets, 5%-6% is in reach. As you said, some years are easier, some years are more challenging. We feel comfortable with the over 4%, very clearly better than before. With the margin, it's the 18%-20%, and we are just at the lower end of the range. Of course, we wanna move up more towards the 20%. If you look at the product mix, how it can change over time, I think that's also very realistic that we get there.
Ute, is it allowed to add something?
Absolutely.
You should have in mind that thinking about the shift to 50% of our total amount of sales to Next Generation Solutions, we talk about definitely about an EBITDA margin which is above 20%. That might be really helpful in this respect. In addition, ladies and gentlemen, let me underpin and therefore quarterly point out that thinking about the EUR 500 million of sales we have gained from our innovation pipelines, and Harald is very keen on here to bring it to EUR 1 billion in 2025. We talk
Also about an EBITDA margin, which is definitely above 20%. That maybe give you more confidence about the future growth potential in respect of margins of Evonik. For us, it is the beloved, let's say, tailwind we want to explain and to give to you.
Okay. We had the next question from Michael Schaefer.
Yeah, Michael Schaefer, BHF. Thanks for taking my question. Coming back to the organic sales growth target. You put one topic in there which is related to more aggressive pricing, or putting this on the higher end of the management agenda. I wonder what are you going to plan to make different in the years to come than compared maybe to what you have done in the history and what kind of, let's say, pricing potential you see there for your products and contributing to the organic sales growth target? The second one is more an operational one on bio-fermentation. If I'm not totally wrong, basically this is the next single largest CapEx project you have in front of you.
I wonder whether you can update us on the timing, on planned wrap-ups and how we should think about contributions over the next two to three years from this one. Thanks.
I take both. With an ever-increasing specialty share, pricing power goes up. With the exit of PM, pricing power goes up. With portfolio shift within business lines, as Ute explained earlier, take Care Solutions for example. By shifting from more standard products to specialized products, pricing potential goes up and pricing power goes up. By, for example, taking into operation our PA 12 complex, pricing power overall for Evonik goes up. This is at the end pretty easy math. Update on the rhamnolipids. I was just visiting the site recently. Construction is going on. Everything is still on time, so we have no delays. That means by the end of next year we should be close to the finish line. Everything for the time being is as announced.
Okay, let me see if we have another question from the room or if we move to virtual. Oliver, you have another one, follow-up? Happy to take it.
Thank you for taking my two follow-up questions. They are basically interconnected. It seems like a large chunk of you being able to achieve the Scope 1 and 2 targets by 2030 is the procurement of renewable energy. Are you willing to invest yourself in the generation of green energy in the next years due to the fact that, I mean, this is no secret, any energy intense industry will scramble to reduce the amount of energy derived from fossil fuels and will head for the procurement of renewable energy. There seems to be only so much to go around, and some may lose out. Would you be willing to invest in the production of green energy yourself?
The second question is partly interconnected to that. When we are looking at CO2 certificates, where are you currently on that level? Thank you.
Yeah. I take the two questions. I think from what we see today, you don't need to invest yourself necessarily. That is how we see the market. As of today, you can buy shares and volumes that might be accounted like an investment or like a lease, but that's maybe more the accounting technique. From that point of view, our approach is more towards long-term contracts. I think that is true for many input material and also for energy. I think that is the preferred way we go and for the next years that seems very much implementable. With the greenhouse gas certificates, CO2 certificates, we have the hedging strategy not only for the energy itself but also for the related CO2 certificates. We have already 60% covered for next year, 20% for 2024.
For this year, it's almost covered. From that point of view, we have that hedging strategy according to our other energy items from that point of view. We of course have bought certificates some while ago at lower prices after than today. It's more about really the rolling forward hedging strategy, but that goes hand in hand with energy, and so you really know what you need.
Thank you very much. Next question here from the floor is from Konstantin Wiechert from Baader.
Yeah. Hi. Thanks for taking my questions, maybe two from my side. First would actually be on the active cosmetic ingredients. You say that you plan to become a market leader there, also through M&A. Can you maybe give us an indication on what size of M&A we should look at? Maybe a second question, in light of the higher energy costs, do you think or do you agree with me that investments into fermentation-based production should accelerate? Therefore, do you believe that methionine might be produced on fermentation basis anytime soon, let's say 2030? And if so, how confident are you that Evonik will be a leader in this shift?
I'll take the first one, and Harald will take the second one. The answer to the first one will have only two letters, but one clear message. No. Why? It depends on what is coming to the market. We would think about it in a way that would say, okay, if there would be a, let me say, very attractive bolt-on opportunity, we would think about it in a different way. It is just first, definitely too early, and second, from my point of view, please forgive me, it would be not very prudent to give you here a precise number. You can be sure that we screen the market with open eyes in this respect. Having said so, with bright and open eyes, I would hand over to Harald.
Sometimes it helps to look into the rear mirror. If you look into the rear mirror, you see that we have acquired Botanica and Infinitec , and those are very, very specialized activities contributing to the fast growth of our active ingredients business. We were limited only by size to only a few countries, and through the global reach of Evonik, we certainly will propel the growth there. That is, in the meantime, an integral part of our actives business, just as a complement to what Christian said, and those have been pretty small or minor acquisitions. Should we invest into fermentation? Yes. There's a clear yes. That's why we move on with the rhamnolipids.
We are pretty certain that the capacity loading of the plant will go up pretty quickly because the market pull is really there. Actually, today, we struggle to supply new areas because the stuff we have today we always sold out. That is for the short term. For the longer term, yes, of course, we need to think already about the next steps. Your last question was on the fermentative route to methionine. We do own IP on the fermentative route, but so far there is really no breakthrough in sight, and there's no publication in sight that a fermentative route would be more competitive than the way we produce methionine today.
Thank you. Last question maybe from the audience in Essen. Sebastian, follow-up question, Sebastian Bray?
Thank you. A quick follow-up on the innovation projects shown on slide seven with the catchy tagline from zero to over EUR 500 million in just six years. A big jump came in 2021, and I assume most of that was the BioNTech RNA-related sales for the lipid nanoparticle and the polar lipids. Can you give us an insight on what your assumption is for that number in 2025 versus where it is today? Because there's some concerns that those sales might fall off if vaccine sales decline. Thank you.
There definitely will be a, let's say, decline if vaccines will not be in that high demand as of today. What our assumption is that new technologies will kick in. What we see is a full load of projects for our lipid nanoparticle technology. There are more and more companies, and we actually can't satisfy the development needs because of a full pipeline. This is why we ramp up our capacities. There definitely will be a, let's say, a dip in the lipid nanoparticle. That doesn't hinder us and will not hinder us to reach the EUR 1 billion because a very big chunk, and we just talked about actives in cosmetic solutions, a big chunk was also the nice increase in that very area.
Another nice piece is I was talking about the membrane business that is also very nicely growing with I mentioned the number with about 30% per year. We have no doubts that the EUR 1 billion will be reached in 2025, regardless of what's happening to lipid nanoparticles.
Okay, thank you very much. As a reminder and follow-up, you know that, last year it was EUR 100 million of sales of mRNA, so we are not talking about all of the innovation sales here. It was a part of that, but not all of that. As Harald said, we'll see that ramping up in the future again. We will turn to questions from the virtual audience. Not sure if we have some there already. I've received some via mail, which I'm happy to read if we don't have any live questions into the event.
That's not the case. I have received questions from Chetan Udeshi from JPMorgan. Happy to read that. First question is about circularity targets, about recyclability and biodegradability, rate of Evonik's portfolio and our efforts to improve that. The second question is on biosurfactants know-how and, on our IP, how we can use that beyond the home cleaning product space into other applications as well.
I'll start with the last question. The home cleaning is the most prominent because we have the already announced projects together with Unilever. This is not, let's say, the only area where we are in. We already today supply a lot of that product into also the cosmetics area. This is to be continued. We will supply it into the pharma area in the future. There is a vast array of future applications for the rhamnolipids. What was the second question, Tim?
Second question was on circularity, biodegradability.
Yeah.
of products of the portfolio
We just recently announced our target that through circular economy, we strive and we will make it, like with the innovation growth fields, to reach 300 million additional sales through technologies we provide to the industry that circularity can be reached. Because, I mean, you know, we are always the enabler to do something, and that is in terms of circularity also the case. Just to give you a few examples, we do have a very nice project in recycling mattresses. That is one area where we are active. And then also the decomposition of polymers on the chemical route using our alkoxides, which will be transferred from the Functional Solutions business line into the growth divisions in the year 2023, most probably.
I mean, I already said we work a lot on fermentation routes. We pulled together all our activities in the biotech area into the biotech platform that was scattered a bit. With the reshuffling of the RD&I unit in mid-2020, we created a biotech platform to have a good springboard into the bio arena, which is much stronger than it was in the past. Then there was the question on IP, if I remember well. Of course we do have covered the field for the rhamnolipids also, of course, on the IP side, to be, yeah, let's say on the safe side.
Okay, we have a couple of other questions via mail. Both Georgina from Goldman Sachs and Chetan from JPMorgan are asking, and I'm disappointed that it didn't come up yet, but happy to take it now. Asking on current trading and our outlook on the more short term, looking into Q2, how that is evolving and developing. Ute Wolf, over to you for some current trading comments.
Yeah, absolutely. Thank you, Tim. Yeah, I also try to address it in the very first beginning of our speech, that we still see a very good and healthy demand for our products. If we look at the different divisions, of course, Nutrition & Care is very resilient. In animal nutrition, there is even a little bit of booster now with higher soft commodity prices to use our amino acids. Healthcare, we talked about the specific projects. PM is a beneficiary of higher oil prices, so that is something we see on the other end of the portfolio. If we look at Smart Materials here, we also see a good demand for our energy and sustainability-oriented products. So, high energy prices are also a chance for business as it increases the demand for energy efficiency solutions.
From that point of view, we still also have from that a very strong underlying trend. Overall, as I said, we have good order books. We see a continuation of the good trends from Q1. Maybe here and there in China, if we have logistics challenge, we have some difficulties getting the product out. That might here and there play a role. Overall, I think from today's point of view, Q2 has the clear potential to be a very good quarter again.
Okay, thank you. We have a further question here via mail from Georgina from Goldman. I will take that. Next, question is on our annual CapEx guidance and the raise of our annual CapEx guidance versus our more asset-light portfolio approach. Georgina, question is whether the majority of the increase is then about meeting the decarbonization targets and therefore likely be the case for the whole industry and not just for Evonik.
Refers to our EUR 700 million NextG en Technology. Yeah, that's, I think that's true. We will have some CapEx put in, but as you see, it's really stretched out over 10 years, so we can really digest it very well. It is really a very p rofitable CapEx, so with good returns. From that point of view, I think it's really a good path to go like that. In our case, we will also allocate part of the divestment proceeds, so I think it's really also a portfolio shift here. That seems very well workable for us from today's point of view.
Okay. Last question from Georgina, and maybe also here we are coming closer to the end of the Q&A session, and to the end of the event. I may remind you on the feedback survey. We would appreciate very much if you fill out our short form, just five questions, at the end of the event. Maybe as a last question, we take the last question from Georgina. Georgina's question is, after the divestment of Performance Materials, are we seeing any other cyclical businesses in the portfolio? Any businesses that are still giving cyclicality to Evonik?
It is the obligation of the board of directors to permanently, continuously analyze the quality of our portfolio, of our businesses, and to judge upon their future potential. That goes without saying. Having said so, we do in future focus on our three growth divisions, Specialty Additives, Smart Materials, and Nutrition & Care, which tremendous room for growth and for profitable growth and for profitable green growth. In other words, for the foreseeable future, I do not see, we do not see any larger divestment candidates in our portfolio. I guess that is as crystal clear as I could convey the answer to you.
Thank you, Christian. As it's crystal clear, I think we may now take some of your closing remarks on today's event, hand over directly to you.
Yeah, it is a short one. Ladies and gentlemen, it was our great pleasure having had you today joining our Capital Markets Day. For those who are here in the room together with us, we appreciate having chance to invite you to have a light lunch with us, a joint lunch with us. For all the others, from the bottom of our hearts, we do wish you a pleasant summer and take care and hope to meet you and to see you soon in person. That is what ends our Capital Markets Day 2022. Thanks a lot.