Hello, and welcome to our discussion today on DCC's role in enabling energy transition. We are looking forward to talking to you over the next 90 minutes or so. DCC is very well-positioned to enable energy transition and support our customers on their energy transition journey. As we will discuss today, this is something we are actively doing every day. It has been a little over two years since our last Capital Markets Day, and we wanted to dedicate some time, beyond results announcements, to talk with you about the resilience of our group strategy and the range of opportunities ahead of us across all of our sectors. As I mentioned on our results call last week, we had hoped to have this conversation with you all alongside our year-end results in May. However, we deferred it due to the dynamic COVID situation at the time.
While I would prefer to be with you all in person at the London Stock Exchange or at one of our excellent sites for this discussion, we are absolutely committed to operating safely, we've decided on a virtual session. We've all become very au fait at leveraging technology for these kinds of events, and I expect it to be a great interactive session nonetheless. I am delighted to be joined here in studio in Dublin by Kevin Lucey, Chief Financial Officer, and Eddie O'Brien, Managing Director of our Retail & Oil division. Due to travel guidelines in place at the moment, we are also joined live from the U.K. by Henry Cubbon , Managing Director of our LPG division.
To set the discussion in some context, we will begin by talking about DCC's group strategy and our purpose, and then move on the discussion onto the particular focus today on enabling energy transition. I will discuss how our strategy and purpose positions us and drives us to enabling energy transition. Henry, Eddie, and Kevin will share with you what we are doing in this space today, in the markets and as a group, and our view on the opportunities still to come. We will then take live questions direct from our analyst community for the remainder of the session. Before we get started, I want to take a moment to direct your attention to our standard disclaimer, which is on screen now. The material and recordings for this event will also be available on our website after we conclude today.
Hopefully, it shouldn't happen, but if you have any technical questions as we go through the event, please email our team at investorrelations@dcc.ie. Let's get started. Since our flotation, we have pursued a consistent strategic objective of building a growing, sustainable, and cash-generative business, which consistently provides returns on capital employed significantly ahead of its cost to capital. We achieve this first and foremost by building agile and customer-focused sales, marketing, distribution, and contract manufacturing businesses to go to market infrastructure of the sectors we choose to play in. We combine a depth of sector knowledge and experience to grow these businesses into businesses of scale in the resilient and enduring sectors of energy, technology, and healthcare. These sectors have long-term growth demand characteristics and strong fundamentals. They are dynamic sectors, for change is a constant, and we have resilient and agile businesses as a result.
We focus on cash-generative, recurring revenue businesses with growth potential and strong returns, and geographies with reliable economies and high health and safety and compliance standards. All of our businesses operate under a consistent strategic framework that drives real excellence and value through our group. This framework includes creating market-leading positions, driving operational excellence, creating a culture of innovation, extending our capability into new geographies, developing our people, and maintaining a strong financial position throughout. We spent some time earlier this year, just before the pandemic struck, to consider our purpose as an organization. Our purpose, enabling people and businesses to grow and progress, is core to who we are as an organization and what we have stood for since our founding. Our purpose directly builds upon our core values, which help shape the culture of our group and how we execute our strategy, safety, integrity, partnership, and excellence.
Purpose is how we see ourselves as part of something bigger, no matter what our role is. It speaks to our genuine role as an enabler of the sectors we operate in, of the customers we serve, and of the key partners that we work with. It reflects our focus on adding value in everything we do to make a positive impact within the environments we operate. As the pandemic took hold earlier this year, we saw daily demonstrations of our role as part of something bigger. On our year-end results call in May, we shared some examples of how our businesses had played an essential role in enabling their sectors, their customers, and their communities to adapt and change during the pandemic. There is no better example of how our purpose ingrained in the fabric of our businesses. There is a trend in many businesses on purpose today.
We are entering a time where the role of corporates in society must be viewed more holistically. I think the current challenges we see in the world at this moment only compound this view. Our business partners and B2B customers expect to collaborate with sustainable, long-term oriented companies. B2C customers are increasingly savvy and informed, researching the companies and the brands that they support. Our employees want to build careers that serve a higher purpose. The purpose is only real if we act against it. Our role in enabling energy transition, which we will speak about today, is directly influenced by our purpose. We all know that climate change is one of the greatest challenges facing society today. It is a complex challenge requiring every person in every part of the world to make difficult choices.
The choice to adapt our consumption of energy is one of the most important steps we will take on this journey. Understanding these choices and getting access to real solutions is difficult and complex for people and businesses around the world. DCC is well-positioned to enable them to make real progress through their energy transition journey. Our strategy, our purpose, our values, all of this has real impact. It has created real value and enabled us to build leading sales, marketing, distribution, and contract manufacturing businesses in our core sectors. Each of our divisions has grown from relatively humble beginnings in the U.K. and Ireland to multinational businesses of real scale with leading market positions. Our sectoral diversity, which I have spoken about previously, allows us to invest and grow behind positive trends as they emerge.
The fundamentals of these sectors have not changed. We are very optimistic about the opportunities presented by the trends in these sectors today. In healthcare, people are living longer and healthier lives. They are increasingly conscious of looking and feeling good. healthcare systems are also evolving to meet the needs of society with longer lives. In technology, devices and services are playing an increasingly important and pervasive role in all of our lives as the tools that enable access to increasing amounts of data and digital applications. In energy, fundamentally, there is a growing global energy demand that is essential to power progress and growth across societies. The energy transition is about continuing to meet this energy demand or more while helping customers to use energy in an efficient and smarter way.
As we will go on to talk about, the nature of the energy or fuel may change as a result, but the fundamental need for energy remains. All these trends have ebbed and flowed, but DCC has consistently delivered disciplined growth over time. As the world shifts, DCC's agility, experience, and core infrastructure enables evolution with change, be that in technology from on-premise to cloud, or healthcare from tablets to soft gels to gummies, or in energy from fossil to lower carbon or renewable. DCC responds well to shifts and will continue to do so. While the specifics of the products and services that we provide will continue to evolve and change as it has in the past, the demand for energy, technology, and healthcare products and services will continue to grow into the future.
Throughout these trends, we are clear on our strategy and our financial and capital discipline to support it. I will now hand over to Kevin Lucey to talk more about this. Kevin?
Thanks, Donal. Crucial to DCC's consistent delivery remains financial discipline, our capital deployment framework, and a clear focus on long-term and sustainable returns on capital employed, our key metric. All growth opportunities we consider are approached in this context. This context is also a critical backdrop to our conversations about the future. Our approach has delivered strong financial performance, cash generation, and robust capital deployment. Over 26 years, DCC has delivered very strong growth in profits in a very resilient and consistent fashion. Approximately 1/3 organically, 2/3 through acquisition. We focus on realizing this growth in cash flow, which becomes the enabler for our continued growth and development into the future. We were delighted just last week to report the continued resilience of this approach, despite extraordinary circumstances, when we shared with you our first half results.
We reported that group operating profit increased by 8.3%, approximately half of which was organic. DCC delivered another good free cash flow performance, with free cash flow generation up GBP 90 million on prior year. We reinvested approximately GBP 90 million of our cash flows into new acquisitions, each of which in turn increased the scale and capability of the group. Importantly, the group exited our first half with an extremely strong balance sheet, with just over GBP 100 million of net debt and with over GBP 1.5 billion of cash on the balance sheet. This first half performance and our long track record demonstrates the real resilience of DCC and our really strong financial position will continue to drive our growth going forward. As Donal has mentioned, our core strategic objective remains generating sustainable returns on capital well in excess of our cost of capital.
We will execute against our strategy in line with our capital allocation principles for deploying development capital. Development spend supports our growth in two ways. Firstly, in deploying development capital to improve and grow our existing business organically. We invest in integrating more closely with our customers or developing new product capability as new energy, technology, or healthcare products emerge. This includes, for example, where we support the investments our customers are making on their sites in new commercial and industrial LPG infrastructure, where we invest in our digital capability in our retail business to enable greater customer loyalty or payment options. As we have talked about previously, it includes our significant digital investments in our U.K. technology business, which will drive greater efficiency and customer solutions. It drives increases in organic production capacity to really scale our excellent capabilities in the health and beauty space.
Secondly, we deploy development capital and acquisitions where we are focused on adding new capability to our businesses, allowing us to enter new product or geographic areas, or to scale up a more modest presence to drive greater returns. This capital deployment and acquisition leverages an excellent M&A skill set and capability from origination through execution and on into integration. This skill set and capability has been honed over the years in the more than 300 acquisitions we have completed. We have also demonstrated our ability to add significant value to our acquisitions. How we have deployed our development capital has evolved in line with how growth trajectories change or new opportunities present. If we look at our evolution over 10 years, or even in the last five years, our capital base has been evolving. There is now significant geographic diversity in the group.
Just 10 years ago, we were really concentrated on the U.K. and Ireland, with just a very modest presence in continental Europe. Five years on, we had more than doubled our relative presence in continental Europe. Today, continental Europe and the U.K. and Ireland are equally important, but perhaps even more notably, over the last 2.5 years, DCC has successfully entered North America and has a modest presence in Asia. North America now accounts for almost 20% of our capital employed. We have excellent growing businesses in North America, and just as importantly for our conversations about the future, these provide further opportunities for consolidation for DCC, just as our U.K. and Ireland and continental European platforms do. In terms of capital deployment optionality, this really is a significant development relative to where we were just three years ago.
The growth in the group has been very significant across the last 10 years, and we've also become more focused, as you can see from the exit of the two smallest divisions of the group. We have clearly invested significantly across the last five years in building DCC, with the LPG division in particular scaling into a real international leader in its sector, as well as supporting its growth into the adjacent gas, power, and specialty gas markets. Since 2018, we have made further substantial investments, in particular in LPG technology and healthcare. In recent years, and as we always have, we have leveraged the diversity in the group to ensure we are reflecting the trends, which Donal mentioned, and competitive landscape to where we could most valuably deploy our capabilities to build sales, marketing, distribution, and contract manufacturing businesses of scale.
Our sectoral diversity means that when acquisitions in a particular area become relatively too expensive, as has been the case in recent years with retail assets, we continue to be able to deploy capital at good returns in other areas whilst pursuing organic growth in all areas. I think it is notable that since 2018 we have deployed 70% or thereabouts of our acquisition spend into healthcare and technology, currently our two smallest divisions. Even in this disrupted environment, DCC remains confident of carefully deploying capital on acquisitions. We have robust processes in place around the DCC group to ensure we maintain our acquisition spend. We have capable and experienced management teams across Europe and North America and in certain other markets where together with our divisional and central development teams, we can continue to originate development opportunities for the group.
Those same management teams have been successfully integrating acquisitions into the DCC Group over many years. Our processes around executing and integrating acquisitions are crucial to our continued ability to bring great businesses into DCC. These have not changed. The rigor of our discipline and our diligence and other processes continues to be fundamental to our execution. Today, we have approximately GBP 3.2 billion of capital employed in DCC. That invested capital will most likely grow and evolve over time, given our ambition to deploy our balance sheet and recurring cash flows in value creating M&A and development CapEx opportunities, and continue our track record of consolidating and compounding.
If we imagine deploying incremental investment capital on acquisitions and net CapEx in excess of depreciation combined of, say, for example, GBP 400 million per annum, and also assume no increase in the scale or ambition of the group in terms of that level of spend, the business as it is today will likely represent just 40% or so of the group in 10 years' time. I make this point really just to illustrate that just as has happened over the last 10 years, the business model in DCC will likely mean that the group will adapt to emerging trends, identify opportunities where we can add real value, build further competence in new products and services for our customers, and continue to scale up in terms of both our operations and geographic diversity.
We have the financial strength, resilient cash flows, and most importantly, the diversity of opportunity across the energy, healthcare, and technology sectors to believe in that level of capital allocation. That is important because the agility and diversity we have in our business operations is matched by the agility and optionality we have in capital deployment.Overall, we continue to have real confidence in our strategy and our business model in DCC, and we believe our diverse, resilient, and growing business, the strength of our cash flow, and our clear capability to continue to consolidate and compound within our sectors, presents a compelling investment case.
The financial strength we enjoy today has arisen due to the very strong financial performance of the group over its 26 years as a public company, and from the backing DCC has had, both from our shareholders and the debt investors who have helped fuel our growth. Our 26-year unbroken dividend growth record showcases our progressive approach to dividend, and is another important part of our financial strategy, enabled by the excellent financial and cash flow performance. I am confident that our financial performance will remain strong, and that we will remain agile and disciplined in our deployment of capital, supporting the best growth opportunities across our healthcare, technology, and energy sectors. With that, I will hand back to Donal to introduce our focus on enabling energy transition.
Thanks, Kevin. We believe that DCC is very well positioned for the future. We are guided by a consistent long-term group strategy and an enduring group purpose. We have a track record of scaling high quality, resilient sales, marketing, distribution, and contract manufacturing businesses in our core sectors. While the specifics of the products and services that we provide will continue to evolve and change, as it has in the past, the demand for energy, technology, and healthcare products and services will continue to grow into the future. In addition, our focus on cash generation and financial discipline ensures we are focused on redeploying capital for the most promising growth opportunities. We have plenty of capital optionality and development opportunities in the sectors that we play in. Over our 43 years in the energy sector, we have built businesses of scale in key energy markets.
We have built leading market positions, innovated in the customer experience and offering, and driven real operational excellence across the business. All of our businesses across energy, whether in LPG or retail and oil, have grown and changed over time. In many cases, what began as transactional fuel delivery businesses have evolved into customer-focused, agile, multi-energy businesses. Just 11 years ago, DCC was only selling oil and LPG products in Britain and Ireland. A year later, we entered Denmark and Austria and have grown significantly since then. Today, we sell oil, premium fuels, HVO, GTL, LPG, LNG, biomass, electricity, natural gas, and others to around 8 million customers in 12 countries on three continents. We have built substantial sources of non-fuel contribution, including our lubricants business, fleet telematics solution, energy services to home, HGV services, and so on.
This steady development of our business now means that we operate a full spectrum of energy businesses, serving the breadth of customers' ultimate energy requirements. Take a residential customer in Ireland, for example. We cater for the energies needed for their home, the home heating solutions, be it oil, gas, or electric, their patio and outdoor energies, and their renewable electricity. We cater for their mobility energies, be that through the fuel card in their wallet or through our network of unmanned retail sites. Likewise, we provide a full range of energies for businesses. Again, to use Ireland as an example, DCC businesses provide B2B customers with the energies necessary for powering and heating their sites or premises, including renewable alternatives such as biomass.
We provide the fuels and solutions for moving their fleets, be they solutions for energy at depots, fuel cards for field workforce, or through the fuels at our retail network. We provide the energies and associated products that our business customers need to help grow their own businesses, be that energies for heating and cooking and hospitality businesses, energies to enable construction activities, lubricants to enable large machineries such as wind turbines, or the energies to enable important agricultural activities. How the world consumes energy has been an evolution over many decades. For many years, we have witnessed significant changes in energy consumption. From the expansion of natural gas grids, the increased adoption of efficiencies across homes, vehicles, and businesses, EU vehicle efficiency and biofuel measures, and the shift in the importance of electricity as wind, solar, and other renewable generating technologies become commercialized.
Still, the pace of change and the imperative to decarbonize must continue to accelerate. The coming years in the energy transition are the most critical and the most challenging for societies. Having achieved significant decarbonization in centralized power, the world will have to now balance the dual complexity of moving to sustainable fuels in decentralized, hard to abate uses, while also making the transition equitable and affordable. Part of the challenge for societies in the energy transition is the absence of a single replacement for fossil fuels. The renewable electron has been a remarkable achievement in many markets over the past decade or so and is now well-positioned as a clear part of the energy mix. However, there are many energy uses that cannot be effectively served by the electron and require new renewable and low-carbon innovations.
In home heating, significant retrofitting over many, many years will be required for the electron to become the preferred heating solution. When that happens, DCC will have the businesses providing that solution. In the meantime, we need to focus on helping improve the efficiency of existing solutions, introducing biofuels, and enabling genuine carbon offsets. In transport energies, the promise of electric vehicles is excellent. We are at the leading edge of EV adoption in markets like Norway, which have incentivized the switch, and we have been growing our lubricants business, supporting the efficient running of EVs. However, there is a significant proportion of passenger car users who will take time to switch, and the jury is out on the most effective way to decarbonize other transport sectors.
We are ready to support customers with the range of their transport energy solutions and in the meantime, we are working to offer choice of energy, greater biofuel penetration, and supporting efficiencies. In commercial fuels, there are a wide range of energy uses that are so intensive that the electrons are unsuitable or too costly. When you consider running a construction site, a farm, or even heating a network of large schools or public buildings, the requirement for high-intensity portable energies is clear. Over time, electricity, biogases, hydrogen, or even existing solutions combined with carbon capture use and storage will drive net zero journeys for these activities. We will be ready to support these customers with the solution that is right for them.
In the meantime, we are working to provide a choice of lower carbon energy solutions, increased penetration of biofuels, and we are innovating to help the customer with their overall energy requirements through energy engineering solutions, digital solutions, and efficiency solutions. All of this also needs to be achieved while ensuring an affordable and equitable transition. The transition to renewable energies, as it is today, would require every person to retrofit their homes, purchase renewable electricity, trade in their vehicle for a battery electric vehicle, and accept the increased cost of everyday goods and services created through renewable energies. The reality is quite different. As a result, for every person and business, this will continue to be a difficult and complex journey. It is one, however, that DCC is well positioned to lead on.
By leveraging our customer relationships, our technologies, our talented workforce, our disciplined approach to capital, and our growing scale, we can have a genuine positive impact for our customers as they transition towards a healthier society and planet. Our growth strategy in energy transition is therefore built on three pillars: customer focus, enabling choice, and operational and capital discipline. Customer focus is core to how our businesses have grown in the past and will continue to grow into the future. The breadth and quality of our energy business today is down to how they have achieved around understanding our customers' energy needs. As we continue to evolve through the transition, we believe we will maintain and build on these customer relationships. Creating choice is a fundamental to the role as an enabler of the energy system.
It is our role to work with energy producers and other industry partners to help create the demand for them to innovate in lower carbon fuels. It is our role to work with partners and emerging energy technologies and products to bring our capabilities to bear in helping them to create a market. Our capital-light model ensures that we are agile in adapting to the emerging energy mix. We have never been nor plan to be a producer of energy with significant long-term capital commitments. We will leave that to our supply partners. Instead, we have a very strong cash generative, well-run businesses today that provides us with time and capital to make careful choices about the future. This plays into our agility as a business, being able to be patient when necessary and disciplined in making the right moves in any of the sectors at the right time.
Our focus will remain on running our businesses well, innovating to grow those businesses, and carefully redeploying capital for future growth. This strategy of enabling energy transition is aligned with our capabilities as an organization. It is aligned with our purpose, values, and culture, and it is aligned with real opportunities to further grow our business. As energy technologies evolve over the next 10 years, we will be ready to support our customers on their energy transition journey. Be it solar power for homes, heat pumps, electric vehicle charging, hydrogen solutions, or innovations in carbon capture use and storage. We will be agile and innovative if it is a solution for helping our customers in their transition. With one eye on the future, we need to remain grounded in enabling energy transition today.
Energy, just like healthcare and technology, is and will remain an essential part of people's lives and part of the fundamental needs of growing businesses. In fact, this energy transition is made complex by the inescapable dependency of society on energy. As a result, energy is a dynamic place to play, just as it has been over the past 43 years. It will take time for truly zero carbon solutions to be fully available, and we will be ready when they are. In the meantime, people and businesses are looking for carbon savings and sustainable actions that they can make today.
This is why remaining customer-focused, providing choice, and ensuring our operational and capital discipline is how we are enabling energy transition today. Our energy businesses are leading providers of the fuels that are needed today, and we will be leading providers of the fuels that are needed in the future.
DCC is enabling energy transition. For DCC, our mantra is: where there's energy, there's us.
[Presentation]
I am delighted now to hand over to Henry and Eddie to tell you more about how we are enabling energy transition today. Let's start with the LPG division. Henry.
Thank you, Donal. It's great to have the opportunity today to talk about how DCC LPG is leading customers through the energy transition. Before I jump into what we are doing today, I want to expand briefly on the breadth and depth of the DCC LPG business. Some of you will have heard me talk about how our business started, as one truck in a small town outside Dublin many years ago. Since then, we've come a long way, not just in the scale of the business, but also in how the quality of the business is fundamentally different. First, I am proud of the range of businesses we have under the LPG umbrella. Our operations stretch from our European home to a sizable and growing North American business. We also have an excellent operation in Hong Kong that creates good medium-term optionality in the Asia Pacific market.
Across that footprint, our businesses have a range of capabilities in energy sales and marketing, technical services, and liquid gas distribution, serving customers predominantly in rural areas off the gas grid. What began as a local supply business in Ireland has progressed to being an international, customer-centric, multi-segment, solution-orientated business. We now supply over 740,000 customers directly, plus an estimated 5 million customers buying our cylinders from our channel partners. To make this happen, we have some 3,000 employees and operate some 220 storage and distribution depots. We are more than just an LPG distributor. We have developed organically and through acquisition, significant natural gas and power retailing operations in Ireland and France. In Ireland, we have around 25% of the B2B market and have added some 100,000 B2C power customers through the recent acquisition of Budget Energy.
We also have a leading position in the supply of specialist aerosol and refrigerant gases in Europe, and a leading position supplying medical gas to the ambulance services in Britain. We are constantly innovating and looking to bring more value to our customers. For example, our lightweight cylinders are sold through automatic dispensing machines in France, and these have proved very popular during the COVID crisis, and we see this convenience winning over the medium- term. We are also connecting digitally with B2C and B2B customers who are supplied through our rented propane tanks through telemetry and demand forecasting technologies. This allows us to improve the customer experience, remotely manage their stock, and optimize our supply chain. We deploy specialized technical service teams who support energy consumers in their move from other fuels to LPG, where we provide a turnkey installation of propane storage, vaporizing, and pipework equipment.
To make this happen, our businesses in the LPG division are led by very capable, customer-focused, and agile management teams, this is where the DCC devolved model wins every time, and why I have great confidence in our ability to continue to grow and develop LPG and adjacent sectors in the coming years. It is vital that we do this. The energy provided by these businesses is absolutely critical to enabling our customers and the rural communities in which they operate navigate the energy transition. We must not forget that LPG is a fundamentally important enabler of the energy transition, both as a lower carbon and emission solution today, but also as a technology that can be zero carbon in the future. LPG is a clean-burning fuel, emitting almost zero particulates, very low levels of nitrogen oxide and sulfur dioxide, and 20% less CO2 than heating oil.
Off-grid consumers can make significant carbon reductions and air quality improvements by switching to LPG. Each of our businesses are actively embracing the opportunities presented by an energy transition by promoting LPG and developing additional products and services. In the U.K., as in many of our markets, there is an opportunity to switch commercial oil consumers to LPG. From our analysis in the U.K., this represents an opportunity of 2.4 million tons of LPG compared to a total U.K. LPG market today of 1 million tons. Our U.K. business leads the market in this area and has grown its commercial business by 25% by pursuing a well-honed strategy to convert businesses using fuel oil to both LPG and LNG. This is not just good business. It's a real enabler of carbon reduction in the U.K.
So far, we have generated an annual saving of nearly 36,000 tons of CO2, and there is much more to come. This has largely been achieved in targeted sectors, which range from food processing companies, building materials companies, and the whiskey distillery in Scotland. Here, for example, we converted the Knockdhu Distillery from oil to LPG, creating a CO2 saving of approximately 20% and a reduction in the whiskey distillery's overall energy cost. Taking this further, we've introduced LNG as an alternative to oil for heavy process-orientated industrial customers. Here, the capital cost to switch is higher than LPG, but the unit cost is more competitive on larger volumes. The customer has the option of utilizing bioLNG at scale today. Further in driving CO2 reductions with LPG, we've also developed lightweight barbecue cylinders to help people move away from charcoal.
In France, we've partnered with hypermarkets to launch a range of lightweight bioLPG cylinders. BioLPG is molecularly identical to LPG, but is produced with renewable feedstocks at converted refineries. A little bit more of that later. Besides LPG, our gas and power businesses in France has developed an offer based on the supply of renewable natural gas and is providing an energy management service to customers where proven savings are shared between us and the customer. In the U.K., we are marketing bioLNG for industrial and road fuel use, and customers in Ireland, following our acquisition of Budget Energy, will have access to power generated by wind, solar, and anaerobic digestion plants. This is all core to enabling energy transition, and we are doing more now to prepare for the future.
There will be more bioLPG available in the future as energy producers convert refineries to bio and as new technologies for processing organic waste develop. BioLPG, being identical to LPG, requires no adaptation for our customers or for us in our operations and provides an easy pathway to full carbon reduction. We will extend our natural gas and electricity presence into new markets, particularly where we can leverage our existing customer base to cross-sell products and services. We are actively monitoring other key industry trends, such as the development of other biogases, such as bioDME, carbon capture use and storage, and how we might distribute hydrogen. Finally, we are working closely with our industry partners. Firstly, to advocate within the European Union and national regulators on how LPG is having an impact immediately today by enabling energy transition.
Secondly, we're positioning how LPG combined with bioLPG will play a key role in the longer-term energy mix in the off-grid market. Our industry in Europe has an ambition to be zero carbon by 2050, dependent on both EU policy support and the availability of bioLPG. In summary, LPG is very much part of the energy transition story as a cleaner, lower carbon, and versatile energy source in rural communities. As such, we're looking to invest further by expanding from our strong platforms in Europe and the USA, where with our financial discipline, we will add value. We will also build our scale and digital connectivity with customers and thereby improve both the customer experience and our supply chain efficiency. Looking forward, we will extend beyond LPG with easy to deploy bioLPG and develop other biogases.
Along with the addition of power and related services, we'll add value to customers and lead them through their energy transition journey. This is consistent with DCC's ambition and position to enable energy transition. We are customer-focused, providing choice, and remaining fully focused on our operational and capital discipline. Thank you. I'll now hand back the studio to Dublin and to Eddie, who's going to talk about his journey in retail and oil. Eddie?
Thanks, Henry. As Henry mentioned, adapting and developing our business is not new to DCC. In the Retail and Oil division, we believe we have the skills and capability to lead an energy transition. We have demonstrated over many years the ability to drive growth through our agile business model, capital discipline, and the growth mindset of our teams. Retail and Oil is a diverse business, serving an array of sectors and their energy needs. This includes fuels for domestic heating, fuels and services for passenger cars, commercial and heavy goods vehicles, as well as lubricants for all sectors of the economy. We are constantly innovating across our businesses to increase customer loyalty and intimacy, to become the energy partner of choice for major commercial customers, and to evolve our automated retail sites. We are offering customers more convenient services and a broader range of energies.
Building on those diverse and innovative foundations, we are evolving our business to enable our customers manage their energy requirements, achieve efficiencies, lower carbon intensity, and ultimately reduce their costs. We want to be a leading provider of low-carbon liquids and sustainable energies in all sectors of our markets. A good example of how we are doing this is in our domestic heating oil business, which has been on the energy transition journey for the last 10 years. For many of our customers, financially viable alternatives to heating oil are limited. We've been helping those customers through the energy transition by successfully offering cleaner and more efficient fuels, and at the same time, increasing our customer intimacy by offering a range of maintenance and energy management services to the home.
In our Austrian and Danish businesses, we have been innovating over many years, starting with more efficient fuels, and more recently, bundling carbon offsets for customers. These innovations have built greater customer loyalty, and with the growing availability of biofuels, we are confident of transitioning these customers to lower carbon or zero carbon fuels in the future. As you know, many of our customers are in the heavy transport sector, and we are providing them with transitionary solutions, too. In our Swedish business, we have a brand partnership with Neste, selling Neste MY, a renewable diesel. Over the last five years, we have grown the penetration of this product and other high-blend biofuels to 40% of our total diesel demand, reducing the greenhouse gas emissions of our transport fuels by 30%.
In Denmark, our aviation business is working on a pilot project with our partner, Shell, to introduce Sustainable Aviation Fuel to the Danish market, with the potential of significantly reducing emissions. As you can see, we are building the capabilities to succeed, and we are building supply partnerships in mature, low-carbon markets that we will expand into our other markets as these products become more available. Providing sustainable fuels is not only about reducing carbon emissions. Reducing air pollution and providing environmentally safe products are also important. We have grown our GTL fuels business, which significantly improves air quality and reduces the risk of pollution to 30 million liters across three markets, and by 20% in the last 12 months.
We have partnered with major construction companies in the U.K. to reduce their impact of their projects on local air quality in major urban settings, such as London. GTL is also biodegradable, making it a safe fuel for environmentally sensitive applications. As a result, we have enabled businesses in activities such as snow grooming in the Alps or marine activities in the Austrian lakes to switch to GTL. Sourcing and offering customers a choice of low-carbon liquids and sustainable energies is just one part of our role in the energy transition. Building on our long-term customer relationships and acting as a trusted energy advisor to major energy consumers is fundamental to how we lead in energy transition. In our U.K. business, our team have taken a consultative approach to working with our larger customers.
They are looking at the customer's entire energy demand with the aim of helping them reduce the total cost of energy. The team recently retained the business of a national parcel delivery company through this approach by demonstrating real cost-saving potential. This win-win approach creates sticky customers, as well as attracting new customers for DCC across our energy businesses. Across our retail and truck networks, we are enabling our customers to make better choices. As electrification grows in our markets, we are investing in EV charging, where we see the opportunity for good returns on capital now and into the future. Our first steps in this direction have been in Norway, the U.K., and France. We have made good progress in the last 18 months, with over 100 superchargers installed in our networks, and doubling in the last six months.
These initial rollouts will be followed by projects in Denmark and in our recent partnership with Tesco under the Certa brand in Ireland. Our network in Norway gives us great insight into the potential of EV charging. From this, we have learned there is a commercial opportunity in fast charging. Our urban locations have the potential to offer fast charging opportunities through the redevelopment of our locations. As fossil fuel volumes gradually reduce, margins increase, and the low price unmanned sector of the market remains attractive to value-conscious consumers.
In the long- term, we will continue to explore ways of transitioning our network, focusing on new business models in urban sites suited to mobility and convenience, while ensuring we maximize the profit growth and cash flow opportunity that will remain by being a low price, low-cost operator of fuel networks, particularly in rural and transient locations. We are also diversifying our networks with investment in truck stops, truck parking services, and ensuring our motorway and truck sites are evolving with investments in AdBlue, CNG, and LNG facilities. Building on our strong customer base in these sectors, we are increasing the share of customer wallet by providing parking services, resale and transport management, and access to fast charging through SNAP and our fuel card businesses.
We will also ensure our sites enable the commercial and HGV sectors transition to lower carbon energy by supplying renewable diesel, LNG, hydrogen, or fast charging as our customer fleets evolve through the energy transition. Consistent with what you have heard already today, all these efforts are focused on our strategy of enabling energy transition through customer focus, providing a choice of energies, and effectively managing our existing hydrocarbon business. This is a clear focus across the DCC group. I will now hand back to Kevin to talk more about the group perspective.
Thanks, Eddie. While our energy transition divisions are clearly focused on enabling the energy transition through their customer focus, choice of products, and continued operational and capital discipline, we know that as a large industrial group, we can play a significant role in leading the energy transition . Whilst the energy transition has been core to our customer proposition for some time, it is important to us that we put energy transition at the heart of our culture. We believe that playing our part in the energy transition is integral to our purpose and values as an organization. For that reason, we have adopted a net zero 2050 target for our group Scope 1 and 2 emissions, with an interim target of a 20% reduction by 2025. We have worked closely with our businesses in planning for and adopting this target.
Throughout, we have had a high degree of engagement from leaders across the entire business on the topic. They each have individual business plans aligned to this emissions reduction and have greeted the challenge with real enthusiasm. This is an example of the mindset and culture that is embedded around the group on energy transition. Our people are actively engaged today in helping to enable energy transition. Not only is carbon reduction good for the planet, it is also good business. As you would expect amongst the board and senior management, there continues to be also regular engagement on the topic of energy transition and the broader sustainability agenda in DCC. For a long time, DCC has worked closely with our investors and proxy agencies to ensure we had best-in-class governance, where clear guidance and best practice emerged over time.
Now, with the emergence of multiple ESG rating agencies, we are committed to being best in class, as these new requirements evolve and mature. You can expect DCC to increase its reporting and transparency in this area. While we are rated highly today by some agencies, such as our AAA ESG rating with MSCI, we know we have more opportunity to improve in reporting on the great initiatives taking place already within the DCC group. We have established regular governance forums across senior management, including the Board Governance and Sustainability Committee, chaired by our chairman, John Moloney, and the Executive Sustainability Committee, chaired by Donal. Together, these forums oversee the group's overall sustainability approach, including our Scope 1 and 2 emissions targets. Separately, Donal chairs the Executive energy transition Steering Group, which coordinates across our energy divisions on our overall approach to enabling the energy transition for our customers.
Finally, back to capital deployment for a moment. Given our focus on building long-term sustainable returns, our capital deployment processes integrate energy transition considerations, short, medium, and long-term trends for development capital, as I mentioned earlier, and carbon impact for our CapEx processes. We are very lucky in DCC to have great businesses and capability in the energy, healthcare, and technology sectors. As a core part of our business model is capital deployment, we are also fortunate to have the diversity of opportunity to deploy capital across those same sectors and throughout their extensive geographic footprint. Clearly, a lot of our focus here today has been on the energy sector, where we believe there will be lots of opportunity in the years to come. That should not detract from our excitement for the opportunities to deploy capital into the fragmented and growing healthcare and technology sectors.
In addition to our strong positions in Europe, our relatively recent entry into the North American market in both these divisions has significantly expanded our development options to build on the successful growth businesses we have built in that market in just a short period of time. In DCC healthcare, we believe we have two really strong platforms for growth, and to deploy development capital to build a much bigger business over time. In DCC Health & Beauty Solutions, we have leading capability in a market that is growing globally by 5%-6% per annum. This market growth is driven by people continuing to look for more and more ways to look and feel good. We now have strong, growing businesses in both North America and Europe, and we are excited by the potential to deploy more capital in this large and growing market.
The quality and breadth of the services and specialist contract manufacturing capability we provide across nutrition and beauty products allows us to build lasting, trusted relationships with our customers. As we consolidate in this fragmented market, expand our customer base, and bring more product and service capability into the business, we can create real value by helping our customers expand their product offerings. Over the last number of years, we have really sharpened the focus of DCC Vital, where we provide products and services to healthcare systems. Following this repositioning, we are really excited about the potential to build this business into a leading European medical products business from its existing strong base in the U.K. and Ireland, where we also still have plenty of room to continue our growth. Again, the market characteristics are good here. Demographic trends mean there is more and more healthcare to be provided.
Government policy generally is for more of this healthcare to be provided in more cost-effective settings outside of the acute care hospital setting. A healthcare system with more treatment and patient care points will require solutions from businesses such as ours to meet the needs of patients. As in many DCC markets, our business here also operates in a market that is fragmented from a competitor perspective, creating opportunities for us to consolidate in this market. In technology, we are one of the few businesses who are distributing and providing route-to-market specialist capability across the breadth of the technology supply chain and product offering. We supply the technology that we use in our homes, on the move, in the office, and into the data center.
As technology becomes increasingly pervasive and essential, we are again well-positioned to deploy capital into this growing and fragmented market from our strong existing platforms in Europe and North America. We are enabling the e-tailers, retailers, resellers, and system integrators to help their customers, people, and businesses to grow and progress. I'll hand back to Donal to summarize our discussion today and lead us into Q&A. Donal?
Thanks, Kevin. It has been great to have the opportunity to update you all today on DCC and particularly our role in enabling energy transition. In summary, DCC's strategy of building a growing, sustainable, and cash-generative business, which consistently provides returns on capital employed significantly ahead of its cost of capital, has delivered superior growth for our stakeholders over our 26 years as a public company. We fundamentally believe that this strategy will continue to deliver in the decades to come. We have built businesses of real scale in the resilient and enduring sectors of energy, technology, and healthcare. These sectors have long-term growth demand characteristics and strong fundamentals. They are dynamic sectors where change is a constant, and our resilient and agile businesses will grow and adapt to ensure that we continue to enable people and businesses to grow and progress.
Our purpose expresses something that has been in our DNA for a long time. I believe that this mindset is core to everything we do, and there have been plenty of examples throughout the session on our focus on enabling others to grow and progress. This is embodied in our approach to energy transition. We are focused on the energy transition from the point of view of our customers, understanding their sectors, their challenges, and their priorities. Our role is to help our customers to decarbonize. We know that a mix of new technologies are required for the effective world to effectively decarbonize. Every customer is likely to need a combination of products and services to meet their energy needs. This is a fantastic opportunity for our agile, experienced multi-energy businesses to be leaders in this space, backed up by our scale and industry partnerships.
As Henry and Eddie have already outlined, this is not a new direction for us. This is a path our businesses have been on for some time now. As we outlined earlier, we have made significant progress to date. We've created a leadership position in oil-to-LPG conversions, significantly expanding our LPG business, but more importantly, saving our customers up to 20% of their carbon emissions. We have created a leadership position in biofuels, and in Sweden today, biofuels account for 40% of our overall diesel demand, reducing the overall greenhouse gas emissions of our transport fuels in the country by 30%. We are investing in our retail network to support the electrification of the passenger car fleet. To date, we have installed over 100 EV superchargers across our retail network, with more planned. We continue to grow our business through acquisitions.
We recently expanded our gas and power business in Ireland, adding over 100,000 customers and increasing our penetration in the renewable electricity market. It is not just about the impact in our markets. We have an impact as a large, diversified group. In particular, our focus on reducing our emissions from operations to net zero by 2050 and 20% by 2025, which is driving more innovation and solutions into our businesses. We will continue to innovate and adapt as new technologies emerge. Our energy businesses are leading providers of the fuels that are needed today, and we will be leading providers of the fuels that are needed in the future. In summary, we believe that DCC is very well-positioned for the future. Thank you for your attention so far, and I'm now delighted to take questions from our analyst community who have joined us today.
Let's take our first question from Sam, from JP Morgan. Sam, how are you?
Hi, Donal. I'm very well. Thanks for the presentation. I've got two questions, if I can. The first one is, I guess the group's had a very good track record of basically growing profitability, even in years where organic volume's been flat or even slightly down. I just wonder if you could kind of talk through the main reasons for that and the sustainability and durability of those unit margin increases over time. I guess the second question was on this bioLPG product. It sounded quite interesting. Are we right in thinking that that's, you've got similar energy content to LPG, and yet is a renewable source of energy? In which case, obviously quite interesting for the longer- term. Thank you.
Sure. Thanks, Sam. Thanks for the question. Maybe just to start in terms of our performance volume versus profit performance over the long- term. DCC actually has quite a strong track record of volume growth within our energy businesses over many, many years. As you rightly say, Sam, there's some years, obviously, that volume growth hasn't been to the same level. Our consistent growth and profitability has been the key factor for DCC over all of that period. Maybe if I take an example of our LPG business. We've been in the LPG sector for over 43 years. During that period in the LPG sector, you've had the rollout of natural gas grids, which have impacted on demand for the product within the sector. Yet all the way through that growth in the rollout of the natural gas grids, DCC has actually grown its profitability.
In fact, it's a much more profitable business for DCC today, even though the volume of LPG off grid would be lower. Our ability to grow our profits in markets, even if they're in decline, is actually well proven over many years. It's a focus not just in terms of margin across the sector, but in terms of the excellence that we bring into our operational activities across the organization. People have often heard me talking about the 0.1 of a penny. The 0.1 of a penny that we focus on in terms of improving our operating metrics, be that in terms of the routing and scheduling our fleet, getting greater customer density, purchase of product from the various suppliers that we have. Each 0.1 of a penny across our energy businesses delivers GBP 16.5 million of profit growth straight to our bottom line.
That focus on excellence across our operating metrics, the way we run our businesses, drives that profitability as well. That's something that just won't change. Maybe in terms of the question on the bio product, I'll ask Henry, if he'll talk about bioLPG.
Yeah, Donal, just a quick one on that. The energy content of bioLPG is exactly the same as traditional LPG. In fact, I use the word they are molecularly identical. The chemical composition of LPG is C3H8, for those of you who did chemistry at school. BioLPG is exactly the same. It's just the original feed source, which is the original source of product that goes into manufacture it, which is different, but the chemical is exactly the same. It has an identical burning and energy characteristics of traditional LPG.
Now, our next question is coming from Alan from Davy. Alan, hi.
Hi, guys. I've two questions, please, on Retail & Oil, either for Donal or for Eddie. The first question relates to fossil fuel alternatives and specifically biofuels. You gave some really interesting stats for Sweden. I'd be interested in how much biofuels you're selling in total across the division, and what you think the drivers or barriers of increased adoption are. The second question relates to retail forecourt valuations. We're all aware that private equity have been very active in this space in recent years and have been willing to pay reasonably full valuations. I'd be interested in your perspective on why you think this is the case. Thank you.
Well, maybe Eddie, do you want to take the question on bio?
Yeah. Thanks, Alan. Across DCC Retail & Oil at the minute, we're pretty close to just under 9% penetration of biofuel in total and about 13% actually of our transport fuels. As I talked about in the presentation, one of the things you see in the more mature markets maybe that have been on a sustainability agenda for a long time, like Sweden and Norway, there's actually a higher penetration, up to 30% reduction in GHG in Sweden on our own bulk diesel. Even in Norway, where over the last probably five years, the government have seen a bigger reduction in emissions from just bio-blending into the diesel fleet, where about 30% of diesel is actually now has bio content. I think for us, the opportunity really is as much supply as we can get, we can sell.
We see that basically in Sweden, 100% of the high blend is actually HVO 100, and if we had more of that, we could sell more of it. One of the really interesting things is when we have the products like GTL or the high blend biofuels, we're getting really strong engagement with our customers, and that's allowing us have a broader discussion with commercial customers about the transition in the fleet. Clearly from our own emissions target reductions, and Donal talked about those targets earlier, we need more of this product to really reduce our own fleet emissions. My expectation is when the product comes to market, we'll have the customers, and we have the opportunity and the capability to sell it.
Maybe taking the question.
Yeah. I think, Alan, the PE guys are as interested in the business as we are. We think it's a really good opportunity because the characteristics of the business are very strong in terms of cash flow and robust profitability, and we've been very pleased with the performance of retail business over the last number of years. I think that's because of a number of things. One, strong locations, right? There's heavy traffic on these locations because of their proximity to customers. If you look at the emerging trends in convenience or click and collect grocery, even in the pandemic, and the emerging trends over time, I think they're very strong locations in terms of driving opportunity into retail forecourts.
If you look at the longer trends, I think with the same customers, there's a need to transition, whether that's EVs, and I think we have the opportunity to change our business model in time and really drive out strong profit growth from the location. I guess that's why they're as interested in the business as we are.
Alan, we have obviously competed with private equity on a number of occasions for retail assets, but it's not just about private equity in terms of the valuations. Kevin, you might like to add something.
No, I think it's relevant. Eddie talked about the great locations, Alan, obviously if you've got great locations, that means you probably have very good kind of real estate. I think since we began our journey into retail, I think we've spent just over approximately GBP 400 million on building our retail business. When we look across that real estate that we've accumulated over that time, we have at least that in real estate value, actually, in terms of underlying and supporting the asset backing of the business. I guess clearly the business is producing very good returns today, very good cash flow today, that asset backing is somewhat relevant in terms of the optionality for the future and just the EV transition and how we think about that. Very good asset backing in the business.
The final thing I was going to mention, Donal, it's not just the private equity guys. This is a very well-rated sector. If I look across our peers in this sector in terms of the listed retail players, fuel players, fuel card players, Alan, they're all well-rated companies. It's not just something we see in the private markets, it's also something we see in the public markets, which I think is pretty interesting.
Super. Thanks, Alan, for the question. We'll move across to Gerry from Goodbody. Gerry , welcome.
Hi, Donal.
Hi, yeah.
Just on that previous question with regard to real estate value or terminal value, what proportion of the retail stations that you operate do you actually own? Also, if you're putting a greater proportion of EV chargers into some of these retail networks, do you foresee becoming more involved in the convenience of the backcourt side of it? Maybe just on the LPG side of things, do you see a risk there? Obviously, you're operating more from a rural point of view, but do you see a risk if there's incentives provided for heat pumps, and how would you address that kind of market?
Sure. Thanks, Gerry. Kevin, do you want to talk about the retail assets?
Yeah. Gerry , just in a broad brush way, you'll know that we have about 1,100 retail forecourts in our portfolio. We own about just over 40% of those, about 42% are owned. I think actually the percentage shifts well over 50% if you exclude our Swedish network, and that Swedish network is a mix of urban and then quite rural sites, where we're serving the rural communities in Sweden across a very large land mass. Doesn't make a huge amount of sense to own that real estate. You'll find that there is a much higher leased proportion. I'd say 42% overall, and then if you exclude that Swedish retail network, it's well over 50% of the underlying forecourts we actually own.
Kevin, just maybe talk a little bit about the asset value within those forecourts.
Yeah. Well, I think, Donal, we do get asked quite a bit about this, obviously we're very focused on growing the profitability out of these locations and the long-term potential that they have. I guess, when I think about some of the questions we do get sometimes on terminal values, Gerry , you mentioned, I think we're very confident in our business model. We're very confident in our ability to grow the profitability, as Donal mentioned, over time. I guess, as I think about some of that longer- term optionality, the fact that we probably have real estate value across that 50% that we own, well in excess of what we paid for those assets, probably that's of some comfort and I guess points to the fact that these are very, very good locations, and they're where people want to be.
That gives us an ability over time to kind of think about the potential for backcourt and further services, which is probably more in Eddie's domain than mine, Donal.
Super. Eddie, talk a little bit about the evolution of the forecourt and the services that we provide on those forecourts.
Yeah. Gerry , today, I think about 25% of the 1,100 forecourts Kevin talked about already have convenience offers on them. As you know, in most of our markets, we've chosen to partner with some world-class retailers like 7-Eleven in Denmark or NorgesGruppen in Norway. Actually in the U.K., we're actually operating about a quarter of those C stores ourselves. We have a mix of capabilities, either in partnership or direct operation, which we can switch over time as we see the opportunity. Probably in France, we have an opportunity to increase the capacity of operations, so to speak, and we're exploring partnerships with Carrefour and different operators. I think over time, there is a clear trend towards convenience, and we will move in line with that convenience trend, whether it's on car wash and whether it's on click and collect grocery.
We're in interesting dialogue with Tesco in Ireland right now about them needing a bigger network as they see the digitization of their own grocery business. We'll add services as we see the customer need. I think that's the real opportunity in our business, is we have the customers, we have the locations, and now we've got to develop our capability and grow the offers as we see this customer need growing. Yeah, I think it'll increase over time.
Gerry , as we talked, I think, through the presentation, we've talked about actually over the last number of years, we see very significant opportunities to grow organically our LPG business. While there's threats in every part of the business, there's way more opportunities for us as, hopefully, we've outlined during the presentation today. One of the things, I think was trying to put some scale on it in the slide, was looking at the opportunity actually on the oil-to-LPG conversion side. When you think there's an opportunity, just taking the U.K. market to potentially, that addressable market, will more than double the overall LPG market, just shows the scale of the opportunity for us within LPG. Maybe Henry, you'd like to add a few comments on LPG opportunities and specifically any threat in relation to the sector.
Sure. Thank you, Donal. Specifically, we do see government support looking to come across a mix of technologies for home heating. It's not going to be just one-size-fits-all. We are engaging with them in the U.K. as an industry. Heat pumps, firstly, actually, you can power a heat pump with LPG, and we supply the refrigerant gas into the manufacturer heat pumps. We're kind of winning a little bit that way. Heat pumps are effectively more relevant to the 200,000 or so new builds that take place in the U.K., where the building regulations and insulation requirements are such that the heat load is relatively low. When you look at the large housing stock in Britain, for example, 25 million houses. We see LPG and bioLPG as really having a key role going forward.
The gas boiler is actually critical in managing to produce, if you like, the right heat load that's required for such old buildings. We do see opportunity in the home heat area alongside the commercial piece that Donal mentioned earlier, where we see significant oil-to-LPG opportunity.
Thanks, Henry. We now have Kate from UBS. Kate, welcome.
Hi, everyone. I just want to ask a question on potential future energy sources. Given your existing infrastructure, where do you see the greatest opportunity? You mentioned hydrogen a couple of times. Is this somewhere that you think you could be a big player in? Sort of following on from that, do you think this would require a big pickup in CapEx in order to adapt your existing infrastructure?
Thanks, Kate. I suppose as we talked about earlier, Kate, there's many products out there, and the energy transition is going to be a challenging journey for everyone. I wouldn't pick one area, as I see as being kind of, this is going to be the big area or this is going to be the big winter winner. It's going to be a combination of energies. It's going to be a combination of fuels. It's going to be an evolution, actually, of the products that we have today to more and more bio. It makes an awful lot of sense for everyone if we can re-utilize, actually, the existing infrastructure.
Actually, being able to take product through, and Henry's discussion earlier on bioLPG, and I won't get into the chemistry of it because I'm going to get it wrong if I try and get the chemistry of it. Actually being able to take a product that you have today that's a fossil product and be able to convert that into a bio and ultimately a non-fossil product, but put it through the same infrastructure. That's clearly the best answer for the globe because we don't have to actually change lots of infrastructure. We don't have to invest in lots of new sources of energy. We're able to take the kind of bio energies or lower carbon energies through the existing infrastructure. As we go forward, we don't see actually very dramatic changes from a CapEx perspective.
Kevin, maybe you'd like to just add a little bit to that.
Yeah, no problem, Donal. I suppose Kate put it in context in the first place. I think that sort of longer- term, exactly where the CapEx will be piece, I think some of that comes back to the context that we were trying to pick up in the presentation a little bit about the DCC Group of the future and the shape of the Group being perhaps a little different over time and therefore the CapEx requirements being different over time. I don't think the way we think about the CapEx piece, Kate, fundamentally we're not going to become a producer of these energy products, okay? Our focus is going to continue to be asset light distribution and retailing of energy products.
I think what we see in terms of the path forward from a CapEx perspective is broadly, I think, in terms of our asset base or our tangible capital across both our energy businesses, both are reasonably similar. They both have about GBP 400 million, LPG is slightly higher, maybe GBP 430 million of fixed assets in terms of the backbone of the business. We spend in both of them about GBP 70 million per annum on CapEx. I think what we see going forward, Kate, is that, as new trends emerge and new products emerge, clearly we will be adapting that kind of six to seven year sort of investment cycle that we have in our fixed asset base. I think you'll find some of that spend being diverted towards newer products and the spend on maybe some of the more traditional products abating over time.
I guess the reason we see it over time is that all of this journey is going to take time, and so there will be incremental spend on new products, but there will be probably diminishing spend in other areas. I think overall, we don't see the asset light model of DCC changing over time. We're not a producer. We're not a manufacturer. We don't have to take those decisions of multi-decade investments in capital. I think it will evolve and change, but fundamentally, the asset base of DCC will remain relatively light.
Thanks, Kevin. Our next question is from Chris from Peel Hunt. Chris, welcome. How are you?
I'm good, thanks. How are you, Donal?
Good.
A couple of questions if I may. What percentage of the fuel volumes come from fuel and non-fuel products introduced over the past 10 years, going back to one of the early slides and are they margin enhancing? Secondly, could you please elaborate on the differences of the financial model between a kind of pure EV retail station and a carbon fuel one? Thank you.
Sure. Well, Chris, it has been a focus of ours for some time to increase our non-fuel contribution, but the largest part clearly of our profitability comes from our fuel activities. Roughly about 10% actually of our contribution is coming from non-fuel activities. That has been growing over the last decade. Areas that we've been investing in, such as our lubricants business, become a big part and a growing part of our business. Eddie talked an awful lot about the services that we're providing for HGVs, the services that we're providing for our customers, those engineering services. We've been in the boiler maintenance business for quite some time. We have a broad range of non-fuel income coming through, and that's something that you're going t see growing, as part of our overall profit mix going forward. They are very profitable activities, all our non-fuel activities.
Eddie, do you want to talk a little bit about the evolution of EV stations?
Yeah. Chris, I think it's an interesting question. I think, in terms of equipment replacement, what we actually see in Norway is actually the equipment to charge cars is relatively inexpensive, and we see that as something we can invest in, particularly in urban locations. Not a big imbalance between fossil fuel and EV. I think one of the complexities is the further away from the grid you get, the more expensive. We've chosen to partner on particular locations with IONITY and people like that, where they're investing in the connections. I think over time, what we've seen even in EV charging is as it becomes more pervasive in markets like Norway, more equipment, it actually gets cheaper. I think if you look further out into hydrogen, things like that, they're relatively more expensive.
I think EV charging equipment per unit cost compared to a fossil fuel pump, it's not that different today even, and clearly will become more in balance. We see that more as a replacement of existing CapEx over time, as the evolution takes place on our forecourts, particularly in urban settings and places where we can see a return. Even in Norway today, we're pretty satisfied with the returns we're seeing in those commercially viable locations. It's definitely not a drag on CapEx or return in the short or medium- term.
Thanks, Eddie. Now go to Annelies from Morgan Stanley. Annelies, how are you?
Good, thank you, Donal. How are you?
I'm great, thanks. Good to see you.
Good. Thank you for the presentation. A couple of questions from me as well. Given it's sort of related actually to the previous point, but given the announcement that we've had in the U.K. on car sales moving away from petrol and diesel by 2030, does that change or has that changed your view of the rapidness of EV adoption? I suppose particularly in the U.K. and across Europe. I'm just wondering if I look at the future of the business, could the DCC Retail & Oil segment in particular become retail, oil and electricity, for example? Could that be an entirely separate new division for you? Related to that, what kind of returns do you target on those investments that you've made in the superchargers already?
Are you already able to deliver the same kind of returns that you've seen when you've made investment in the Retail & Oil division over the years? My second question was on ESG. Do you think the market needs to understand better where you fit into the energy supply chain? Other than the increased reporting on the metrics as you discussed earlier in the presentation, what else can you do here to increase the education, I suppose, of the broader market?
I think Annelies was about five questions in the first question. Hopefully we'll pick them all up. I think, though, on today's announcement, in the U.K., it's really very important point because we really encourage actually, and are encouraged by governments getting much more involved and setting targets and trying to drive the energy transition . As I said earlier, the energy transition is a very complex and difficult change to make. It needs huge alignment between governments, between industry players and ultimately the consumer to affect the change. Going right back to our purpose and all the things I've talked about earlier in this session. We fundamentally believe that this needs to happen, and we want to play our part in driving it. The announcements today, we greet actually very positively.
We will, as we talked about earlier, we will evolve our own business so that we are providing the energies to the customers that the customers need. We can't do all that ourselves. The demand has to be there, and the supply options have to be there as well. That will evolve. Electricity and the electron is going to become a big part of our business. It is a big part of our business today and a growing part of our business today. We will grow within that. That's not just a Retail & Oil, and it's not a purely an LPG thing. That's a DCC Energy piece. That electricity is going to be a key part of the energy mix, and DCC will be a key provider of that.
We've been investing in growing our electricity business, and we don't see that actually as going to impact on our returns. In fact, over time, we see that as being a returns enhancing investment for us. It's going to be a key part of our business. Eddie, do you want to add in terms of the supercharger piece?
Yeah. I think on the previous question, I talked about Norway in particular. I think there's a context as well. Norway has been accelerating its BEV, and it's still only at 10% penetration. What we see is actually the use case is changing in urban settings. If you think that probably predominantly people thought 80% of charging would be at home and 20% on the road, actually in urban, we potentially see it the other way around. We actually see pretty good returns because customers in Norway are frustrated with the fact they have to queue up, and we see a deficit. I think there's some research published, there's a deficit of about 7,500 superchargers in Norway today. Never talk about what will be needed in the future. Consumers are looking for convenience.
They don't like spending two hours in the queue in Oslo. They want shorter times. Clearly, they're willing to pay for time. That's driving the margin up, in terms of the service. That's the things that we like in retail, is basically the location and the opportunity to provide convenience, whether that's shorter queueing time for EVs, or food on the go, or clicking. That will drive a return probably that's very similar to what we do today, especially as customer demand grows.
Annelies, I think the question on ESG actually is a very good question. I suppose in ways, I'm disappointed, actually, in some respects, that we didn't have this session earlier. We had planned on having this session back in May, after our results in May, because I think there's obviously growing focus on ESG. There's growing focus out there in the markets on energy transition. We have such a good story to tell, but we needed to tell that story now, I think for shareholders and people that know DCC well, know where we're positioned, know how well we're positioned to deal with the energy transition, what focus we give to the overall ESG area. I think to the broader market, we needed to really reinforce that. Hopefully today is a good step in that journey.
You'll keep seeing us talking more and more, not just about energy transition, but about our whole ESG approach. You'll see us providing more metrics on that. I don't know, Kevin, if you'd like to add anything to that.
Yeah, no. I think the only thing I would add, Donal and Annelies, obviously, this is an area of focus for us, and we know we can further educate the market. We do think we're on a bit of a journey with the ESG piece and the ratings, and I think that will mature a little bit over time. I think it will become a bit more nuanced in its assessment of companies. Actually, our own belief would be that over time, we'd see much more focus on the enablers of energy transition being important in the ESG journey, and the people who have the customer relationships, like DCC, being in a really, really good place to help the customers transition.
Hopefully, the ESG scorecarding and everything that goes on will slowly begin to evolve in that direction, where they're actually looking at the real practical steps that some businesses are taking to certainly help on the ESG and broader sustainability agenda. I think that's about it. Yeah.
Thanks, Kevin. I think we're getting pretty tight on time. We'll take the next question from James from Jefferies. James, good to see you.
Hey, good to see you guys. Thanks for the presentation and taking the questions. I just said I'll try to limit it to two. If we do have time, I'd love to loop back in. My first one was, the main focus of the EV discussion, regarding retail and oil, was around urban locations. I'm wondering if you could provide a breakdown of what percentage of your number of forecourts you consider to be in this urban percentage, and therefore the most likely the first ones to benefit from this EV investment and switch. Then two, on the new emissions targets, I'm wondering if you could give a bit more color on other things that you're looking to do to reach these targets, other than just mix and fostering a change towards more sustainable fuels. If there's any discussion in linking these potentially to management compensation.
Thanks.
Okay. Thanks, James. Eddie, do you want to talk about the-
Yeah, I think it's different in different networks. Kevin touched on Sweden, where we have a predominantly rural network. If you look at our other key networks in France and Norway, we have a very good mix, probably across the mix of locations in Norway. In France, actually, we have a pretty strong urban focus in the major cities. It's a mixed bag. I think we've got real good opportunity within the network, as you say, to take an early opportunity in the urban transition. Over time, we'll understand further what the opportunity is in transient and rural.
Kevin, maybe talk just a little bit about our approach to our emissions reduction.
Okay.
I'll take the REM piece.
Yeah. I think, James, I suppose right across the business, we have got good engagement from the management teams everywhere about how they are focused on it. It's not just in our energy businesses. Clearly, that's in our health and beauty businesses, our healthcare businesses, our technology businesses, where obviously the mix of energy required is a little different. We're looking at everything, James. We clearly sell renewable power in DCC today to our customer base, so that's something we're looking at right across our business. We've got renewable power, we've got greater use of biocomponents in the fuels that powers our logistics fleets in the two energy businesses, being another really essential part of that. They'd be kind of two of the main things or initiatives that we have, I'd say, pervasively across the group, if you like.
Clearly there's local initiatives everywhere as well, aimed at driving out those targets.
Yeah. Look, I think as we go forward, and there's, I'm sure, lots of REM experts on the line with us today. I think ESG is going to become very much part of REM discussions going forward, and DCC is going to be no different on that. Look, we'll take one more. I know we've run a little bit over time, but we have so many questions. It's really great. We'll take our final question, and it's coming from George from Exane. George, welcome.
Apologies if my connection breaks. I'm struggling a bit with my internet today. I had a couple, and apologies, my line cut out halfway through, so apologies if these have already been answered. My first was on heat pumps. Clearly, governments incentivizing the greater use of heat pumps. Just wondered whether you think we'll see a similar migration across industry, or rather, whether you think industry will migrate to alternatives where you might play a more active role in the physical distribution. Secondly, just on going back to the point on EV charging. Do you see, in the longer- term, a structural impediment to fast chargers at home and work settings? Clearly, at the moment, the charging infrastructure in urban areas is not sufficient to achieve that. Thanks.
Thanks, George. I think we did talk a little bit about the heat pumps a little bit earlier. I think, as we said, the opportunities are very significant, for not just bioLPG, actually, but for LPG and I think some of the stats that Henry Cubbon had earlier really go to demonstrate that. We think there's far more opportunity than any threat in it. As Henry said earlier, heat pumps can be powered by LPG as well. Don't see that as a significant issue. Maybe the piece around charging and where will charging happen. Actually, Norway, and it is really fantastic for us to be present in the market in Norway, which is the highest, and I think nearly global kind of penetration of EVs, so we can see these trends in action.
Clearly the demand for fast charging at forecourt is very significant. Eddie, just the final point on that.
Yeah. George, I think I've explained the urban, it's clearly understandable that on street charging or people living in residential houses, clearly the need in urban is not at home. It's in fast charge. I think the thing that I actually see in Norway now is, I think as fast charging times come down, there's going to be a trade-off between people wanting to plug their car in at home 7x a week or going for a fast charging service as part of their commute or their coffee run or their food to go run. I know personally, if I could fast charge my future electric car in a short space of time and maybe pay EUR 5 for that, as opposed to remembering to plug it in 7x every night I go home, I probably am the 50% of the laziness.
My own view probably as Norway, we see Norway now, I think we'll get into a 50/50 situation between urban and transient and people who just maybe forget to charge or don't want to charge when it's raining or snowing and actually plug in for a five-minute fast charge. I think that's a real opportunity into the future, and we'll obviously know more in 10 years' time.
Clearly, there's lots of people living in facilities and buildings, whether it's in apartment blocks, whether it's along the side of the road where actually they don't have the capability to fast charge at home or to charge even at home. Again, we're seeing that in the large urban areas, and Oslo is a great example of that. I think you could talk for hours about the challenges of people trying to fight to get access to the fast chargers on the sites, which is another issue that needs to be solved. Look, I think we've really run out of time. I'd just like to say many thanks to everyone for joining us here today. I'd particularly like to thank all of our analysts for their continued coverage and interest in DCC, and for the excellent questions today.
We believe that DCC is very well positioned to continue to grow and develop through the energy transition. DCC's diverse, agile, and resilient business model, the essential nature of the group's products and services, our strong balance sheet, and our optionality in terms of capital deployment ensure that the group is very well-placed to continue its growth and development into the future. Many thanks to you all for joining, and please stay safe. Thank you