Good morning, everyone. Good to see you here, all of you, at our Capital Markets Day. I will kick off this day by talking about the net zero journey in our value chain. Let's start with looking at first, I should say to you that when we look at the net zero journey, I have some good news for you, but you'll have to wait a little bit for that. Let's start with where we are and where we are heading. The targets that we have set for us is to be net zero in our own operational emissions, which is the Scope 1 and Scope 2, as you know, by 2030. By the same year, we have a target to reduce the Scope 3 emissions in the value chain, which means the upstream and the downstream in the value chain.
By 2030, 50% reduction. We have a total net zero in the entire value chain by 2050. Yes, we know that there are some challenges to reduce carbon emissions, and we know that the transition is moving not so fast. At least it's slower than we would hope. You cannot always have tailwind, right? Sometimes you have headwind, and that is a good time to show leadership and walk the talk, and actually do the things that you can, and not focus about the things that you cannot do. We have been focusing on the things that we can control, take actions on, and influence. One part of that is our own operational emissions. We have worked systematically to put plans in place to understand what do we really need to do to reach net zero.
We have been dedicated and firm to the extent that we have actually realized that we can do it even faster. What does that mean? Well, if we start to take a little bit of look at where we are, look at the sources of the carbon emissions in our operations. This is the waterfall bridge you see here. A big chunk of what we have is natural gas. We are using natural gas for heating buildings, heating tap water, heating furnaces, and so on. We have one part you see here, the blue 15%, which is purchased electricity. We already now have 95%+ renewable electricity at our sites. The last part is actually contributing, as you see, quite much to the emissions that we have at our sites.
We have a big part here, which is company cars. I don't know if you see it. It's 27%. It's the company cars. That is also a bit of a challenge. Also here, we are committed to reach net zero. Easy, right? We have some boxes that we need to fix. It doesn't look like that when you look at reality, right? This is reality. These are the sites that we have around the world. We're actually quite a big landlord, if you look at it. We have three sites, one in U.S., one in Italy, not this one, and one in China, which are the biggest emitters in our operations. You see we have plenty of other sites where we need to go to net zero.
It's spread around the world, so it's really not one solution fits everything. It's different countries, it's different operations we have. As you know, we have so many different products, how we run the factories are very different. We need to find solution in each and every place. There are, you know, a couple of things that we are doing across. One thing is, maybe not unexpected, that we're working with energy efficiency. We have always done that, of course, but since we have put the targets in place, you know what happens when you put targets, then you start to work on it. We have focused even more on energy efficiency to reduce the need for energy in the first place. That we have done across with a very, very good result. We have also applied solar panels.
You see here in quite many places. Not all of them are done yet. We have some places, Japan and Korea, where we are not re-done yet, but it will come. This is what we have in our plans. We estimate that this will be investments around EUR 50 million. We have the plans, we know what to do, we know what it will cost. We believe it's very important to walk the talk and to show others, not least our customers, that this is possible. We have decided to move up the targets for net zero in Scope 1 and 2 from 2030, end of 2030, to end of 2027. Isn't that great news? I think it's absolutely fantastic.
I hope when we are here in a couple of years, I will show you also exactly what we've done in every place. Okay. The good news doesn't stop here. Our work doesn't stop here. As you know, our operational emissions is one part of our value chain, or value chains, I should probably say. We are part of many value chains. That's a bit more complicated than for some other companies, but it's also a huge benefit because being in many value chains gives you an opportunity to influence, and we know what's going on. I would like to give you a few examples on what we are doing in the upstream and the downstream by looking at two of our products. Starting with this beautiful T21 heat exchanger, Thomas is very happy now, I think.
This is used for HVAC, clean tech applications, but also heavy industry processes. This is produced at the Lund site in Sweden. We run that site 100% by renewable electricity. That's not only reducing the need for energy, it's also reducing the OpEx. Some additional heating we need, it comes from district heating. We are applying solar panels. What's fantastic with this specific site is that we are growing. As you know, we are growing, we are investing in Lund, growing the operations, and at the same time, we are reaching net zero. Before we can produce anything, we need to source.
If you see at the very end there, I don't know, I hope you all see, even in the back, it's sourcing, which is the upstream part in the Scope 3. For this T21, we have basically two main parts for this reason. It's the frames, and then you have the plates. It's metals. Metal is the biggest contributor to carbon emissions in the value chain for heat exchangers. The frames we are now sourcing from SSAB. On their SSAB Zero steel, which means 100% recycled steel. That means that we reduce the carbon footprint in the heat exchanger by 39%. The plates, it's a little bit of a different quality. We are sourcing that from Outokumpu, and that is also low carbon emission steel.
Exactly how much is not possible to say, because as you know, the plates, the number of plates depends on the application for the customer. We believe that it's very important to contribute to buying zero carbon metals because we also need to participate in closing the price gap versus the traditional. This is in small scale now, but we are scaling up this. All right. Once we have sourced it, we transport it to the Lund site, and then we also transport it to the customer. We're using electric trucks where possible. Also that in a little bit of a small scale now, but we are scaling that up. We also have a system which I think is very good.
This is a little bit of a low-hanging fruit. We have a system where we are making sure that when we are supplying spare parts to customers, we don't do that by default by air freight, which is very easily done. Customer calls, needs spare part. Yeah, sometimes yes, but not all the time. Which is, of course, reducing the emissions. Once this T21 comes at the customer site, it has a significantly lower carbon footprint. It doesn't stop there because, as you know, the fantastic thing with the heat exchanger is that it is increasing the efficiency at the customer. That means that the demand for energy reduces, and we are avoiding emissions. We are not taking that into our calculation of Scope 3. As you know, avoided emissions is not included. We are following the Greenhouse Gas Protocol.
It's quite difficult to stand here and talk about the value chain for this product, which includes the customer, and not mention the avoided emissions. It's not possible to say exactly how much for one product. If you look at all the heat exchangers that we are selling for one year, that means a 50 GW reduction in the need for energy. 50 GW less energy needed. That is some 10, 15 million tons carbon emissions. It's pretty significant numbers. If you add the service we're doing on the heat exchangers, it doubles. Again, it's not in our Scope calculations. At the end of life of the heat exchanger, which is, of course, very long from we have sold them, but we have many out there in the installed base, it's a possibility for the customer to recycle the heat exchanger.
We have a cooperation, for example, with Stena. That means that if the customer chooses to recycle it goes back in the loop into recycled steel. That's part of closing the loop as well. Again, this we do what we can in this, and we are starting at a small scale. We are scaling up, but we cannot do everything. The customer needs to be willing to do things as well, and other companies. Let's have a few minutes on another product. This is the Clara separator. Now, somebody is happy, right? This separator is used for fruit juice, wine applications, and other brewery or other brewery and stuff. This is produced in Eskilstuna, in Sweden, and that is also a site where we are very close to net zero.
The heat exchanger, it's a different story because the main contributor to the carbon emissions is not the sourcing. It's the use phase at the customer. This is a machine, a product that is rotating. It's using an electrical motor, but it needs power. The source of that power is up to the customer because it's their plant, right? We cannot do much about that. What we can do something about is how much energy the separator needs. We have been working on that, and our great R&D team in Tumba, they have made some great innovations to solve this. There are a few of them, many of them, but two of them are, you know, one is the hermetic design, which means it's something about the fluids, the dynamics of the fluids in the bowl.
Another one is eMotion, and that is the air friction around the bowl. These together, they can actually reduce the need for energy with 50%+. Again, of course, depending on the process the customer is running. I think this is also quite good. Again, I mean, we do what we can. If the customer then do what we do, meaning net zero in their own emissions, the source for the heat exchanger would be renewables. Voila, we would have a net zero there as well. It's all about working together here, and everybody needs to do their part. We have recycling here as well. We have cooperations with another company called Aperam. It's a global one that we are using and offering to the customers for recycling.
This is some illustrations of what we are working on in Scope 3, where we believe we can influence the most and make the biggest difference. We are continuing on this. I remind you that we now have, besides working with our Scope 3, we are moving up the targets from 2030 to 2027 with our own Scope 1 and 2 emissions. We are very proud of this. We think it's very important to show leadership, and we really hope and believe that this will influence others to do the same.
Our presentation will be basically two parts. I will start with a quick introduction, and then we will zoom in in one specific topic, on the topic of biofuels, and how Food & Water also contributes on the decarbonization of our society. That will be by an expert speaker, so I will introduce that person in a few minutes. First of all, I took over the Food & Water division since September. I'm not new to Food & Water. I've been part of the Food & Water management team for the last eight years, from the moment it was created in 2017. I have been running the business unit High Speed Separators over the last eight years as part of the Food & Water division.
The journey over those last eight years has been quite exciting. I think the whole organization has been an exciting journey we have gone through. I think also the results are quite exciting if you look at it. As you can see, both on our order intake and on our EBITDA development, the numbers have basically more than doubled. If you look at order intake, when we started division, we were a division of SEK 12.5 billion . Today, we are over SEK 25 billion . It has been a fantastic development, both on our capital sales, but also, as you can see on the dark blue, on our service business. The same goes for our profitability.
We were below a SEK 2 billion EBITDA, SEK 1.8 billion, and now we are close to the SEK 4 billion. That is also a fantastic development, as you can see. If you look a little bit on the development over the last five years, the growth basically have accelerated over the last five years. Our organic growth, last five years has been 7.5%. Also this year, 2024 LTM, we are pacing at 7.5% in organic growth. Of course, we have also had a quite substantial acquisition we made in August of 2022 with the acquisition of Desmet.
That was a very big acquisition for Food & Water, and it is for us a fantastic new member in the family because it is a really very well-established company in both food, feed, but also biofuels. That we come back to that later. The development has been very nice. The company has integrated very nicely in the group and is continued to perform very well. We're very excited about that acquisition. If we then look a little bit about, I'm not gonna go into the details, what is all the structural changes that are behind to enable this growth.
There are many structural things that have been implemented over the years, but if I would highlight one specific element that has definitely helped us grow our business, it's our capability to innovate. In the Food & Water Division, we have put a lot of time and effort in looking on our innovation processes, and we have managed to accelerate the pace of new innovations. Today, we are, I would say, on average, launching more than 20 new products every year across the different business units, and I think that's a powerful thing. If you look at the pipeline that we are having, it's a pretty impressive pipeline also from innovation that will come into the market in the next couple of years.
A lot of that now is also around sustainability, how we can help our customers to produce food, medicine, and of course, clean water in a more sustainable way, using less energy, using less water, and of course, still increase the yields in their production. I feel if you look also to the future, I mean, we have had a fantastic growth so far, but I'm also quite convinced that that will continue. The reason for that is that basically our market is us people, you, me, everybody on this planet. Today, we are 8 billion people. In 35 years from now, according to UN statistics, we'll be 10 billion, which is an increase of 25% on this planet.
To compare it's 24 times the population of Germany that will come on this planet needing food, needing medicine, and needing clean water. From a pharmaceutical perspective, we expect a very strong development because if you look at the population, it will not only grow with 25%, but the elderly population will be more than doubling in this period. Also the need for medicine is gonna grow substantially. Basically, we could say we are operating in a market which is structurally growing for the next three decades, basically. That's a fun place to start working, right? I will end here. We will not go further more in the details about the food. We're gonna very specifically now zoom into the biofuels. My next speaker here is Tim Kemper.
Tim has been the Managing Director or President of Desmet. He's also now part of our Food & Water Division. Has more than 40 years of experience in the food industry, been more than 25 years with Desmet, and has a wealth of experience in, specifically in the biofuels market. Tim, please, could you share your insights about this market going forward?
Thank you, Sammy. Welcome, everyone. Good morning. Great to see everyone. Let's jump into the very interesting topic of biofuels. First of all, what is the opportunity for biofuels? Well, if we look at it's mostly the transportation sector. 27% of all the world's energy is used for transportation, 90% of that comes from three liquid fossil fuels: diesel fuel, gasoline, and jet fuel. The numbers are somewhat staggering. 6.9 billion tons per year of diesel fuel, 4.1 billion tons per year of gasoline, and jet fuel smaller, 0.3 billion tons per year. In total, around 11 billion tons per year of fossil fuel used within the transportation sector. That's the opportunity. Even with those huge numbers, they keep growing.
We see around a 2% increase in diesel fuel, a 1.5% increase in gasoline, despite electrification of cars, and a 2.5% increase in jet fuel. It's a growing market, a big opportunity for renewable fuel. What are the practical renewable fuels available at scale today? There are four. The first is ethanol. Ethanol is basically a blend that you put into petroleum gasoline. It doesn't have the same thermal characteristics as gasoline, so it's used as a blend. Quite often, it'll be about a 10% blend referred to as E10. We see biodiesel. Biodiesel doesn't have the same cold flow properties as diesel fuel, so in cold weather, it can only be blended in a small portion. In warmer weather, it can be blended in a larger portion. We see practically 2%-40% blend.
If you have a 10% blend as an example, it's referred to in the industry as B10. We have hydrotreated vegetable oil, often abbreviated as HVO, or sometimes called renewable diesel. HVO is a complete drop-in fuel. That means it has thermal and cold flow properties very similar to diesel fuel. The great part of that is that you can use the same infrastructure, the same tanks, the same pipelines. HVO is very popular with the petroleum industry. They can maintain the same infrastructure and switch to a renewable fuel. The fourth is sustainable aircraft fuel. Sustainable aircraft fuel is also a drop-in fuel, so you can basically directly displace jet fuel with sustainable aircraft fuel. It can be used as well in all the same infrastructure.
The tanks at the airport, the pipelines to get the fuel to the airport, they can all still be used with SAF as they are today with jet fuel. If we look at where these biofuels come from, all from renewable sources. First of all, we start with ethanol. Ethanol comes from primarily corn, but not corn as a whole. Corn is divided into three parts: the starch, the protein, and the oil. Only the starch portion is converted to biofuel. That's about 60% of all ethanol is made from corn. About 25% is made from sugarcane, and the balance of the 15% is made from other starchy crops. If we look at biodiesel, HVO, and sustainable aircraft fuel, those are made from oils and fats. The most common source is excess edible oils.
What do I mean by excess edible oils? Well, we grow oil seeds such as soybeans and rapeseed, not for the oil. We grow them to produce the protein. In producing the protein required for the world, we have about 20% oil in excess. That excess oil is available for making biofuel. As well, we have animal fats. Basically, when we have meat scraps, they can be rendered into protein used in pet food, and also having animal fat that can be converted to HVO. The same is true for used cooking oil. Used to be the used cooking oil, you cooked in it, you took it out, and it was disposed, went to the landfill. Today, used cooking oil is being collected all over the world in order to convert it into HVO and SAF. Distiller's corn oil.
In that process of making ethanol, we have the starch, the protein, and the oil. That oil can also be used to make HVO and also SAF. These are the sources of which we come the different biofuels. What's really important about biofuels is what are their real benefits? There are three key benefits that I'll cover. The first of which is not so intuitive. Enabling farmers to maximize protein production. How does that fit with biofuels? First of all, about 20% of the world's population has malnutrition. They don't have the basics that they need, especially amino acids. Those amino acids come from protein primarily from meat. When we talk about meat, chicken, fish, pork, beef.
In order to maximize the production of that so that we can help bridge this protein gap, we need to maximize the vegetable protein that's fed to those animals. That vegetable protein is primarily coming from soybeans, corn, rapeseed. In order to get farmers to grow more of that, they have to be profitable. The role that biodiesel fills, biodiesel increases the value of the side products. When you're producing corn, the starch portion has a higher value now, thanks to the ethanol industry. When you're producing soybeans or rapeseed, the oil portion has a higher value now, thanks to biodiesel and HVO. These biofuels play a very important role in increasing the overall value of the crops. When the value of the crops is higher, that means the farmers are profitable.
They can then use all the latest technologies, the best planting seed, adequate fertilizer, and spend the CapEx needed for sophisticated planting and harvesting equipment. Just as an example, I grew up on a farm, and today that same land is growing two and a half times more soybeans than it was when I was young. That just goes to show, if you put the technology into farming, how much more we can get from the same space. This is the not so intuitive but very important benefit of biofuels. The second is much more intuitive: clean air. When we look at the different biofuels, ethanol is an oxygenator, so it helps gasoline burn cleaner. We have up to 25% reduction in CO2 when we produce ethanol compared to when we're running with pure gasoline.
Biodiesel and HVO reduce carbon monoxide by about 10% and particulate material. The black soot that you see on buildings that come from running diesel, it's dropped down because of burning biodiesel. If we look at sustainable aircraft fuel, that is the one that has the biggest potential impact, up to a 50% total reduction in greenhouse gas emissions. Especially when aircraft take off from an airport, there's an immediate big fuel burn, a lot of pollution. Around airports, the air quality is not very good. If we can move those jets over to sustainable aircraft fuel, we can dramatically reduce the amount of pollution around our major airports. This is the second benefit of biofuels in that it brings cleaner air. The third benefit is circularity.
When we look at the different feedstocks, used cooking oil, as I mentioned, it used to be discarded. Today, used cooking oil is worth $1,000 per ton, and it's being collected all over the world at a faster and faster pace. We're recycling that used cooking oil. Animal fat. When you render, when you have meat scraps at a production facility for meat, that can be captured, rendered, turned into animal fat and protein for pet food. That animal fat, again, now is recycled into biofuels. Lastly, the distiller's corn oil. We waste nothing in the ethanol-making process. We make ethanol, we make protein for animals, and we make another type of biofuel using the distiller's corn oil. A complete recycling capability. These are the three key reasons why biofuels are quite good. Three nice benefits.
With everything that's good, there comes an extra price. As Thomas mentioned, you have to pay a premium. What is that premium? Ethanol cost of production is about 1.5x what it costs for gasoline. When we look at biodiesel, it's about 2x what it is for gasoline. When we look at HVO, it's around 2.2x, and sustainable aircraft fuel is around 2.5x the production cost of diesel fuel or jet fuel in that case. We do have some cost challenges. You may ask why 2x more. It's pretty simple, because that used cooking oil I mentioned that cost $1,000 per ton to make those fuels compares to Brent Crude that's about $500 per ton.
When you look at the incoming cost, you basically are twice as high for those biofuels as you are for starting from fossil fuel. How do we bridge this gap? Well, we have to have government intervention because you have to level the playing field across the country in order to make this work. That government intervention comes in three types. The first is a blend mandate. This is very typical in biodiesel. The government can say it has to be 10% biodiesel mixed in with diesel fuel. When they do so, the petroleum companies are obliged to make that happen. They go out, and they seek the supply of that biofuel. That creates a market for creating the biofuel, and then you end up with a market price.
At the end of the day, the extra cost gets built into the price that the consumer pays. The second mechanism, common in ethanol, is a tax credit. If you blend 10% ethanol into gasoline, you get a credit on the taxes owed, and typically, the petroleum company gets to claim that as a tax credit. That way, they keep the ethanol price to the consumer similar to that of the gasoline. However, the government loses out on some of its income. The third type of government incentive is a subsidy. In that case, the government literally pays the producer or the blender the cost difference to make it viable. These are the three government interventions that are occurring today in the space. I must say we've had some very positive tailwinds in 2024 in the biofuels area.
First of all, in Indonesia, the government passed a law to increase the blend mandate from 35% up to 40% for biodiesel. In Brazil, we had an increase in the blend rate of biodiesel from 12% to 13% this year. They've got a scale that goes up to 30% in 2030. In the U.S., there's actually a bipartisan bill that's been put forth to extend the HVO tax credit until 2034. That's very important because if a petroleum company is gonna invest $500 million in a plant, they need to know there's a runway of time where they can secure that credit. Also India. India has another scheme where they basically give licenses to companies to make ethanol and to make biodiesel. They've really ramped up those licenses.
We see very positive support coming from various governments. How much of the decarbonization journey have we accomplished so far? What we see is in ethanol, we have now displaced 3.5% of the global gasoline consumption. With respect to biodiesel and HVO, 1%, and SAF, 0.1%. I will say ethanol's been around for 25 years, whereas biodiesel, HVO is more, 15 years, and then SAF is something quite recent. There is no silver bullet that renewable fuel coming from these sources is gonna completely displace. It's one important tool in the toolbox of getting there and, you know, having a reduction in the fossil fuels. If we look at the growth of biofuels, we see different segments having different growths.
Ethanol is a reasonably good-sized industry at 145 million tons, 2.7% growth rate. What does that mean? An extra 3.3 million tons of production capacity is going in every year. If we look at traditional biodiesel, it's a market of around 43 million tons with a 2.3% growth rate, which means there's an additional 1 million tons of production going into place every year. When looking at HVO, that one's growing quite fast at 9.2%. It's up to a 20 million ton market, and it's growing around 1.8 million tons per year. Sustainable aircraft fuel is the newest. It's only a 0.4 million ton market with almost a 36% growth rate, which is an additional 0.1 million tons per year.
When we add this all together, there's around 6 million tons of extra capacity that's going in year-over-year in the biofuel area. It's an important growing market for us to go out and capture. What role do we play in biofuels? If we look at ethanol, we've got heat exchangers used throughout the process. When we look at ethanol, we also have the decanters and the high-speed separators that separate the oil from the syrup in order to capture that oil from the corn. When we look at biodiesel, we have an A to Z scope. First of all, oil seed production facilities. We can start out with soybeans and rapeseed, for example. We have all the processes to remove the oil. We have the complete biodiesel production facility from the starting of crude oil up until biodiesel.
We make high-speed separators that are used in the separation and cleaning of the feedstock, as well as the purification of the biodiesel itself, and heat exchangers used throughout the process. When we look at HVO and SAF, we also have a quite complete array of products available there. We have some partial animal byproduct rendering capability. We have full oil seed production capability in order to create the feedstock. We make complete feedstock pretreatment systems. These feedstock pretreatment systems are not located at where the oil seed is processed. They're located at the petroleum companies. We also have heat exchangers used throughout this process and as well effluent water evaporation systems used to reduce the total effluent water from those facilities. A complete array of products for the biodiesel industry.
To wrap this up a little bit, there's a few key messages that I'd like you to think about when leaving today. First of all, there are three very important benefits of biofuel. Maximizing the world's protein. That's very important. The second is cleaner air. The third, enabling circularity. These are the three real benefits of biofuel. We are not using any of the protein in corn, in soybeans, in rapeseed to make biofuel. That protein needed to meet the world's hunger is retained. We're using the byproducts of the industry to make biofuel. Secondly, it's a nice growing market. 6 million tons per year of additional capacity is going in year-over-year, and we have the opportunity to capture that with a terrific array of technologies. Alfa Laval is well-equipped to address this biofuel industry.
Good morning to you all. It's a big pleasure to have you here in San Bonifacio, one of the very important Energy Division sites. I can't wait till you get out in the machine room and experience what has been developed here over the last few years. What we will do now is to make a deep dive on the Energy Division. Really go into the energy transition. More looking at where are we now and how do we see the future. What is the pace? What are the opportunities? What are the challenges? Always link this to what role Alfa Laval potentially can play in this, and what we're already doing. Before jumping into that, let's just have a quick look at the financial performance since the Energy Division was started.
If you look on the left side, that's where we have the top line illustrated. In 2017, we were just above SEK 10 billion division. There was growth for a couple of years, and then corona or COVID brought us back to more or less the starting point in 2017. Since then, we have had a very strong growth in the last three years. T hat growth comes really from all of our five industry segments. Some more than others. Clean tech, light industries like semiconductors and data centers has definitely driven this with the highest percentages.
Even HVAC, over a three-year period, even with the drop we have seen recently, still over the period, there has been growth also in the HVAC sector. Of course, there has also been, especially in 2022, inflation, which has driven up prices, which has also made some contribution here. Now you see we have more or less doubled up. We are SEK 20 billion division now. If we look at last 12 months, you can say the growth journey has taken a bit of a pause. We have a slight decline, and that is naturally linked to the heat pump collapse in Europe that we all are so familiar with.
But despite this heavy drop, we are actually quite pleased to see that we are almost on the same level as the peak in 2023, and this is due to mainly three reasons. We have the data center boom kicking in. Despite all the bad news we can read about, our clean tech business is doing very well. We have had a solid service growth as well. The service growth is the dark blue you have at the bottom. It's actually now on an LTM basis, our service share is 28%, where just a few years ago we had 26%.
The service has grown even faster than capital sale, which is of course, very good to see, from a customer experience perspective and a sustainability perspective. This growth has lifted the profitability. You see, we had the first four or five years since the division was created, we were more in the 15%, 16% return on sales level. That has now been lifted to, say 18%+ return on sales. The drop-through is coming through. Again, we have a drop in last 12 months compared to 2023. A gain, of course, with heat pump, we have underutilization in some manufacturing units.
I must say the Braze business unit has done a fantastic job in keeping the profitability despite the collapse of the heat pump business. Sustaining this new level in a difficult year, we are pleased to see that. Okay, that was the financials. Now, jumping into the energy transition. I think we all have our view on the energy transition, and there are probably as many opinions in this room as there are people. How fast is this going? What will happen in the next three years? What will happen over a 10-year period? There are so many scenarios flying around.
I think what we all can say is that the race to net or the speed we need, the pace we need to reach net zero in 2050, we are behind that pace. It's not like nothing is happening. I think there are two things everybody seems to agree upon. One is that the energy demand is rising. That is from a global perspective, it's from a regional perspective, and it's from a national perspective. The energy demand is going up with population growth, living standards, and the digitalization. Another thing is the phasing out of coal. This was the COP28 pledge that everybody signed up to, and there is a lot of activities in making this happen. Of course, India, China, Southeast Asia is majority of the coal.
If we look at coal, that is 26% of the energy production today. If we look at electricity production, it's more than one-third. Of course, phasing out coal brings a lot of dynamics into the energy market. That is the two things that I believe most can agree upon. If we take one step deeper, how to handle this situation. The energy demand going up, we can solve in three ways, and that's the three first pillars you have. We can reduce the energy demand by working on our energy efficiency. 50% or more of the energy produced is never being used.
That's really the first fuel, and that's also where we have the COP28 pledge, where we need to go from a 2% energy efficiency worldwide to a 4% by 2030. That will dampen the demand, but still, it cannot cover up for all the energy demand that we need. A way to create more energy can be done by fossil-free power generation. That's where we have wind, solar, hydro, but also nuclear is a fossil-free power generation. That can take some part of it. Phasing out coal, it will be more than difficult to compensate the energy demand and phasing out of coal without having other fossil fuels kicking in. Here we have a lower carbon fossil fuel, which is gas.
If you take the IEA Bloomberg outlook, gas is going to be a very important stepping stone in the phasing out of coal. If we replace all coal with gas, we still will reduce the global energy emissions with up to 20%. It is, of course, also helping in the decarbonization. There are other areas that we cannot electrify, where we need a clean molecule, and that is hydrogen for the hard-to-abate sector. There are also sectors where we cannot decarbonize. We need to defossilize, and I'll come back on this. Exactly how this plays out is, there's tons of opinions on, but these five will all play a role. That's what we believe. How does this look for Alfa Laval then? Well, for energy efficiency, and that's indicated by the pluses we have at the bottom.
For energy efficiency, that is 80% of what we do today. That is our core, and this is where we can contribute a lot. On the fossil-free power generation, that's where we don't directly have a lot in the solar PV or in the wind or on the hydro side. When the renewable goes up, we need to have energy storage, and that calls for a lot of thermal applications, and there we are very active. We, of course, have a very strong historical position in the nuclear business. When it comes into gas, that has a lower potential, I would say, compared to the other ones. Still, we are in drilling, we are in transportation of gas, we are in the usage of gas, and we are definitely having more business in gas than in coal.
The shift from coal to gas will also have a positive impact for us. Hydrogen and defossilization, for example, of the chemical industries with green chemicals, bioplastics, that's where it can really be a game changer for the Energy Division. We also know these are the most tricky things to get going over time. Exactly how this plays out is difficult to say, but we have a role to play in all five of them. This means that we have, from an Energy Division perspective, a growth journey ahead of us. Let's jump into some of these examples in some of these areas and our role. Data centers. This is one reason for why the energy demand is going up.
You see the data centers has gone from a 30 GW power consumption to now 80, and the projection is that it will further more than double until 2030. The data centers are really energy centers. If we look at this outlook, there are two main drivers. We have the traditional data centers, which is the dark blue. This is more people coming online continuously, more streaming services, et cetera. That is driving more data center demands. The big jump is the AI. Where you see in 2020, 10% of the energy for data centers went into AI applications. Now soon it will be 30%, and end of this decade, it will probably be more like 50-50.
That is changing this industry because for conventional data centers, you can remove the heat by air. In AI duties, they are much more energy-intense. You need to remove much more heat per area, and then you need to go into liquid cooling. That is illustrated what you have on the top, down right corner here, where you have servers in a rack. Each rack then have direct to chip cooling. You can also have these racks in submerged, but direct to chip seems to be the front-running technology at the moment. Then you have, for each of these rack, a cooling distribution unit. What makes that so beautiful is that there is a brazed heat exchanger in every single of these cooling distribution units.
If there are 500 servers, server racks in a data center, there will be 500 brazed units. That's a new application area for us, and that's the main reason for why our data center business has more or less doubled in the last six months. If we take an example, let's take a 100 MW data center. Focus on the upper right here. 100 MW, which is a large data centers, but it's not what we call a mega data center, but it's a significant one. Compared to previously, those 100 MW now has to be moved not by air, but liquid, and that's why we need All these 100 MW are turned into heat, we need to remove 100 MW in heat. That's a new potential for us.
That heat has to be moved out of the building and into another liquid loop, which is then another heat exchanger duty. What all these data centers are so being pushed on and also have ambitions on is that all that heat should not go up in the air. We have to reuse that heat. That is low-grade heat, it has to be boosted, and this is where industrial heat pump can be of help. That is our third opportunity. When it has hit the right temperature for the offtaker of the waste heat, you have the fourth heat transfer duty. On a 100 MW data center, we have a 400 or let's say 350 MW heat exchange or heat transfer opportunity.
With this outlook, this is, of course, a very exciting area for us, for a number of our heat exchangers, gaskets and brazed specifically. Speaking about energy efficiency, this is where we need to go from the 2%-4%. It's not going the right direction. This year it will be only 1%, most likely. We need to create more awareness around the energy efficiency. This is where we have all the technologies ready. We have created the Energy Efficiency Movement, which was launched as an association in the spring this year together with ABB. We have now more than 500 companies part of this movement, more than 40 countries, more than 20 industry verticals.
This is creating a very strong one industrial voice on the importance of energy efficiency and also how to do it and lifting the whole awareness, but also educational level around energy efficiency. The precision of the movement has all actually gone so fast that IEA have now asked the movement to host the 10th IEA energy conference in Brussels next year and hosting that together with the European Commission. I think this is one way of lifting the thought leadership around energy efficiency and bringing industries together with other associations, together with policy makers and getting things into action mode. Another area we work on in the energy efficiency is the Energy Hunters. Our sales force is becoming an Energy Hunter organization, and they can help customers making business cases.
The obvious ones are where you can reuse the heat on the same site, and a lot of things are happening there. The more difficult thing is when we need to do sector coupling. One company producing waste heat but can't use it all themself, and another one can take it, but there is a distance between these two. Then we need to get the sector coupling going, and that's much more tricky. We have good examples of this. One example is in Milan, here in Italy, where we have Eni gas-fired power plant. They have waste heat. We have one data center. They have waste heat.
Our sales force, sales people here in Italy then bring Eni together with the data center people, together with the utility company. Then miracles happen. Now we have 16,000 homes in apartments in Milano being heated by, via waste heat instead of fossil fuel energy. Now, three data centers are more coming up. These are really big data centers. Guess what? We are, of course, doing the same. It will be 500,000 apartments. Energy efficiency really is crucial in this energy transition. Here we believe we have a major role to play. Continuing a bit on energy efficiency, heat pumps. Why is heat pumps also energy efficiency? It's three times more efficient, at least, than the alternative of gas and oil boilers.
Here you have from the European Heat Pump Association, the development over the last 10 years. Heat pumps is covering different technologies. It's important when reading this graph to understand where is Alfa Laval relevant. We are relevant in the air-to-water. That is the blue that you have at the bottom. We have the ground source. So those are the two technology areas where we play a role. There you can see that there has been a steady growth over the years. In 2020, 2021, things start to move even faster. That is the European Green Deal, decarbonization, electrification of heating in homes as a decarbonization tool in Europe kicking in. Subsidies in place.
With the Russia invasion of Ukraine, there was a absolutely boom in the market because then it's also from an energy security, we don't want to be dependent on Russia gas anymore. How can we do? Gas prices also going through the roof. 2022 was a mega jump. You see in 2023, and this is number of installed heat pumps, then there was actually a decline. That is because subsidies suddenly started to be lowered or put on hold in a number of countries. It's also linked to gas prices coming down, and also gas being subsidized in Europe. There is a clear link between the penetration of heat pumps in the market and the gas electricity price ratio.
If it's below three, you have a case where the monthly cost will be lower. If it's above three, you need to do a high CapEx investment as a household, but you will also have a higher monthly bill to pay. When electricity prices are high, in U.K., Germany, the penetration is low, and other areas, Finland, Sweden, Norway, much higher penetration per 1,000 households when the ratio is in favor of the heat pumps. This doesn't illustrate how our business has been. 2023 was an absolute record year for us, much higher than 2022, and that is because the whole stock building in the whole supply chain happened.
Despite the installations going down, there was still full power on component supply, building heat pumps, putting heat pumps out to the installers. There was a continuous overheating of the market despite the numbers going down. What is happening then in 2024? There are no official numbers yet, but we are well below 1 million heat pumps being installed in Europe. There is also a stock build up from 2023, which means that we have absolutely rock bottom numbers on heat pumps this year. And that's a mega change, and that's why I say that the business unit being able to handle and still protect profit in such a situation is great to see. Will 2025 be as 2024? No, because now the stocks starts to be normalized.
Not yet, we believe in the spring, maybe early 2025, one or two companies will start to move again. Other companies will be more April, May, and the last one's probably around summer. Even though there are no heat pump growth, our business will come back to some level of business at least. We still believe in heat pumps going forward. It will take longer time, the electrification of heating in Europe is fundamental and will happen over time, and especially now when also new builds are coming back will also help the heat pump business. Okay. That was the energy efficiency part and a couple of the industry verticals where we are playing an important role.
We have talked about the energy demand going up, and we need to produce more energy, and fossil-free power generation is one way of doing this. That means a lot of intermittent. We need to have base load of power. That can be generated via energy storage, which we are very active in. Renewables together with energy storage is a nice cocktail. Another really nice couple is the renewables together with nuclear. Nuclear is giving the base load that the renewables can't. Combining them gives a very good system. What you have here on the graph is yearly either retirement or capacity additions of nuclear reactors, but clustered in a 10 years period.
What you can see is now that there is a absolutely shift for the nuclear for the next three decades compared to the previous three decades. Actually, the estimates are that 200-300 additional gigawatts of nuclear will kick in. To give you some indication, 1 GW is roughly EUR 3 million- EUR 5 million, EUR 6 million, depending on the scope opportunity for Alfa Laval, then you can do your math. Of course, it's over 25 years, it's not exploding our numbers in the next two years, but it's a very solid business for us where we have a very strong position, very good technologies.
What is also happening is that nuclear is coming into small modular reactors, and this is where it's more instead of 1 GW reactors, you come into smaller plants, 300-400 MW, which is off-grid solution, which can be perfect match with the data center needs, where they are really struggling to get the grid support or the grid development going fast enough. Our opportunity here is great because in the small modular reactors where we have utility heat exchangers on the conventional side, we have an opportunity to go inside the reactor, having heat exchangers inside the reactor to do the steam generation. You can multiply the previous potential I've set with at least a factor 10 for us. The small modular reactors is still emerging technology.
SMR, there will be demonstration plans coming and so on, but to really have them reliable, robust, the right generation of it, we are more talking about 2032, 2035 before this will be a serious business. It's still an area where we are early involved and will be making a big difference in making this system reliable and ready to scale. We have talked a lot about the energy efficiency, the energy demand. We come into the hard-to-abate sectors. This is where we need to get the cost down. Of course, things are too or very expensive first time you do it, and there will be a very high price to pay for the output of the first plants.
We need the first plants in order to bend the cost curve. We need the flagships to demonstrate new technologies, to get the efficiency going, the learning curve, and then deploy, standardize, and scale. Then, cost will come down to an acceptable premium because there will be a premium to pay. It's more expensive to produce in a sustainable way than where it just can pollute everything. It has to be an acceptable premium. If you take hydrogen as sample, a year ago, people said we are probably $5, $6 per kilogram hydrogen. In reality, I think, most can say we are probably $6, $8 when we start to see the bigger plants being in operations. That has to come down.
To really have hydrogen scaling is probably below $3 per kilogram. We can only get that going when we get the flagships going. This is where we need to have the entire value chain working together to take the pain in the beginning, first mover coalitions, but also have banks kicking in, governments to share the risk or give bank guarantees for the important flagships. As Emma mentioned, our engagement in, for example, fossil-free steel, where we pay very high price, but we also find customers that are part of the value chain that want to contribute, where we all take some pain, and then we actually get things moving. If we move into hydrogen, there's so much crap talking about hydrogen.
We can all read the articles of this is not happening, this is not happening, hydrogen will be needed. The pace is not what the pace was expected to be just a year ago, things are still happening. You see from 2023 to 2024, there is a tripling of hydrogen production. When I say hydrogen here, it's really green hydrogen. It's electrolyzer-produced hydrogen where you split the water molecule via electricity. If you look at the announcements, there are more announced projects, last 12 months, than has been taken out. There's still a growth in the announcements. The problem is that they don't get the FID quick enough. There is a difficulty in getting the cost curve down because we don't get enough flagships moving.
That is mainly due to two things. It's the hydrogen infrastructure, and it's the cost of hydrogen. The infrastructure will take time. What we believe in is that the hydrogen will happen with point source production. You produce hydrogen where you use it. That is fossil-free steel, it's e-fuels, et cetera. There are no infrastructure challenges. There, you just have to work with the very high premium to start with. Those things are moving forward. It's not all dark here. We believe in the hydrogen in the long term. This is where we created the new business unit.
If I was convinced about our role in that a year ago, I'm even more convinced about our role to get that cost curve down based on what we have seen during this year with the partner dialogues. If we go into hydrogen production, the picture we have on the left side, this is an alkaline module, 20 MW. In the heart of this, you have our new heat exchanger range, the T-range from business unit GPHE. That's because the electrolyzer is an exothermic reaction. The energy efficiency of the system is super critical in order to get the cost down. This is where we play an important role. This module here on the left side goes to NEOM, the big 2 GW project in Saudi.
Hundreds of those modules are delivered to that, or skids are delivered to that plant. On the right side, we can do the balance of the module, there we need new heat exchanger technologies. We can also come inside the stack, where we can contribute a lot with our thermal know-how, fluid dynamics, how to mass produce, really make designs that can be industrialized. This is where we have created the new business unit. I'll not go more into it now. It will be one of the stations where you can actually touch and feel some new, exciting, high tech. We leave it hanging till there. Another important stepping stone, natural gas is one. Another one is carbon capture.
There will be things still with fossil production, you have cement plants, et cetera, where carbon capture is the short-term solutions. This is an area where things are actually happening in certain regions, and it's happening in regions where there is a storage opportunity. If you look at three examples here on the left side, we have Habshan in Abu Dhabi. We are very pleased to be part of that flagship, 1.5 million tons CO2. This is where you have an amine process, so a solvent to take out CO2 from waste gases. Roughly we have say a handful of million euro for each million tons CO2 captured. That is our business in the larger scale.
On the direct air capture, that is where you just take the air around you, and you take the ppms of CO2 out, and you concentrate it, and then you store it. Those processes starts to be relevant where you have free heat available. Two examples, two flagships moving. One is Iceland in construction mode, the same in Texas, and we are part of both of those two flagships, securing energy efficiency from day one, and also being part of getting the cost down over time by working very close in these designs. I have talked about the defossilization. What is defossilization? Well, that is when you cannot electrify, and you cannot use the hydrogen atom. When is that? That is when you have polymers.
Polymers have a lot of carbon atoms, that has to come from somewhere else than fossil carbons. This is where we can, for example, use organic waste. Chemical plants, plastic production will have another source in the future and a completely different process. This is also where we play an important role. All the examples so far I've given is on heat transfer. This is actually where separation, High Speed Separators, is in the middle of this process to make giving the right performance, the right yield, and also being part of bringing renewable plastics down to a reasonable level. Here we don't have I would say there is more demand activation here. Consumers are more focused on this, we have some big plastic off-takers that have strong ambitions on having bioplastics and decarbonize their sourcing.
Here we have a number of demonstration plans ongoing, and I think we will see the first couple of full-scale plans already next year. Then we get that cost curve down because we get the first flagships going. Now I've talked about a number of the transition areas, application areas, but this is also driving demand for a lot of new minerals. Just the hydrogen in the electrolyzer, you need a lot of rare earth minerals. When we electrify things, we need so much more copper than we have ever used before. This picture is lithium. With the explosion of batteries, both for EVs, for energy storage, we need so much more lithium. Here in the lithium processing, our decanters is in the lithium processing step.
You can do the extraction of lithium in several ways, but one of them use separation technology. Of course, also when you have the tail, the mine tailings, you need to take care of that, and also there you need separation technologies. It's really in the whole energy transition plus the new feedstocks, where we can and are playing quite an important role in the early days to get flagships going, so that when things really start to scale, we are ready. Now I've talked about a lot of business development activities, but there are some other areas where we believe is crucial in order to take the thought leadership and the clear market leadership, position in the energy transition.
One of those is manufacturing capacity and capabilities. Tom will cover this more in his presentation. We have two other areas. When we sell equipment, it's a 30-year service commitment. The other one is innovation. More than half of the technologies needed in the energy transition still doesn't exist. Those are two key areas that we also need to handle in order to be successful during the coming years. If we start with service. This is where we have brought service to a new level. We have now had double-digit growth the last three years. It's not just coming for free. This is a lot of pulling up sleeves, making the groundwork, getting a lot of basics in place.
What you see here on the map is our service centers around the world. The red dots is where we have made bigger investments during the last three years. Those can either be greenfield plants or expansions of current capacities. Our service center capabilities has been lifted to a new level. This journey will continue. We have also traditionally a strong field service organization. It has been mainly a strong field service organization for separation technologies. What we have done now is we have built up much more field service technicians and resources on servicing heat exchangers on site. That is where we have tripled the number of field service engineers already now. This gives us much more, a broader service offering.
We can do more on-site, which is also growing our service center activities, so we get a much more complete chain on this. We are also expanding our parts capabilities, so we are investing in parts distribution centers. The picture here is from the 20,000 sq m building we have in Lund specifically for the heat exchanger spare parts. There are other distribution centers around the world that we are planning, and that is ongoing. A lot of investments going into service centers and field service and also our sales force on service that lays the foundation for continuing the service journey we have had the last couple of years. Another important one in, is innovation.
In the Energy Division, we have made the strategy that we want to double up on our innovation capabilities. We have already taken the first step this year with the new BU, but also having bigger R&D budgets in each business unit. Here are some examples of innovations that we are bringing to the market. We have a new heat pump range for the replacing the high global warming potential refrigerants with propane or CO2. That will be one of the stations you will also have today, so more touch and feel on that. In the middle, we have a semi-welded heat exchanger, a much bigger unit, bringing up the capacity.
This was launched last week in the China International Import Expo and got really high attention. It was brought on the main stage as a big news, and that is driving industrial heat pumps. It's driving energy storage, and it's fit for the hydrogen. We are coming also with a new gas heat exchanger range. A lot of the new energy transition is also asymmetric applications where you need different designs. This is where we are coming with a new range, big units that are also addressing the big industrial heat pumps, also energy storage, but also gas compression interstage coolers.
This is three examples of innovations, but there is a lot of things boiling that we will talk more about in coming years. That brings this to an end. We have four pillars that we are very focused on. Innovation, doubling up our activity level. Continue building on our market reach. We have a very strong position, but more on that. Service we have talked about, and the whole cleantech business development activity level. What goes across this is scalability and building up the whole manufacturing footprint.
The year 2024, seen from a Marine Division standpoint, is about exceptional volumes and a step change in our profitability. My team said, "Please smile when you say that." We are really not good at celebrating, you know, the really good years and the really being too sad about the really weak years when you're in a business like the Marine Division, which is a long cycle business. They will come. It's a part of the business. You just need to make sure you do the right things year after year, the results will come in the end indeed. My presentation today will cover three areas. I'll talk a little bit around the financials development we've had to date. This is the foundation we are going to build upon. I'm going to talk a little bit around the market conditions in the maritime.
You know, we are a single vertical player, one and a half, little bit with the offshore. These are the boundary conditions we work with. Last but not the least, I'm gonna talk about the work we are doing around the energy transition. It is by far the opportunity that we have in our business. With that, let's get straight to the financial development. If you look at our order intake in the new structure in the group since 2017, our development has been not too bad when you look at this graph here. Even if you discount the exceptional volume we have seen from Framo capital sales in 2024. You, especially taking into account that in the period 2018-2022 was characterized by a lot of volume coming from scrubbers and ballast water, that is not there anymore.
When you put it all together, the orders have developed rather well. Again, if you see how do you break it down, the M&A part, the inorganic development, is just about SEK 1 billion, SEK 1.5 billion plus. All of the rest is organic growth. In the last five years, our service business has grown at a CAGR of double digits. Our offshore business has grown with a CAGR of double digits. Our energy transition portfolio, and I'm gonna talk about it a bit later, starts to get meaningful volumes. The most important thing seen from my standpoint is that in all the product verticals in capital sales, we have held or improved our market position in almost all product verticals. This is actually hard work on the ground. Thomas, you mentioned the same, you know.
It's a lot of hard work on the ground every day doing the right things. If I look at our profitability, we've had a period of declining profitability when the market has been rather weak. You can see that a little bit later on the markets. It has recovered now to a more normalized level as our market has normalized. If you look a little bit deeper inside, of course, we have a better invoicing mix. We have a greater share of Framo in our delivery at this point in time. Our service business has grown significantly larger. This is a profitable part of our business. Our factories are better loaded. We are getting a lot of good drop-through coming from there.
If I look at our offshore business today, it is now accretive to the division profitability rather than being dilutive as it was five years ago. A number of things have happened to make the lines look as they do today. Effectively, we get a really good drop-through from our sales into the bottom line at this point in time. The one thing that we normally don't talk about so much, even in the quarterly calls that, Tom, you are having on a quarterly basis, is the fact that we have done a lot of work around pricing in the high inflation period. We have done a lot of work around costs inside the division, footprint, product, all of that on the S&A side in the period when we were in a low cycle.
A lot of the numbers that you see start to shine is simply because all the hard work we have done on price, on cost in the long periods when the markets were really rather weak actually and against us. That is the reason why you see the numbers as they look today. This is what we've achieved so far, and I think if we just take a step forward and say what lies ahead of us. The shipbuilding market accounts for about 50% of our volume in the Marine Division. If I look at the market, the conditions are fairly supportive looking forward, and this is based on two reasons. Number one, the supply-demand fundamentals in the market, and number two, unit economics of a new vessel versus a vessel that was 20 years old.
In the period 2003 to 2008, there were about 20,000 ships contracted. To give you a sense, typically depend on how you slice and dice and count, the marine market on a fleet basis is about 40,000 to 50,000 ships. Half, close to half the complete fleet was ordered in a period of six years. This fleet is going to come up for renewal. Typically, the lifetime of a vessel, economic life is between 20 to 25 years, and we have a massive replacement cycle standing up ahead. Compounding this effect is that a modern vessel today is 30% to 50% more efficient than a vessel that was built 20 years ago. The reason I'm trying to flag is the supply side story in the Marine Division is extremely strong going forward.
We know for sure the future will absolutely not look like this, but it's going to be fairly close. This is a really good, the best proxy we can make, assuming that sentiment will drive a little bit more volatility than you see here. On a longer-term basis, this is the best view that we have, and we feel good about this from a supply side. Seen from an Alfa Laval standpoint, mix is as important as the number of ships being contracted. We like tankers more than other ships. The opportunity per ship set for us is bigger for a tanker related to other vessels. Framo, for one, is applicable only on product and chemical tankers, so we like tankers a little bit more. We have had an exceptional tanker mix in 2024. That we don't expect it to be repeated.
If you look at the light blue bars below, the mix going forward is also fairly favorable for us. If you look at our service market, 30% of our volume comes from service. Our service volume is a function of our installed base for the most, which is a, in turn, a function of the world merchant fleet. If you can see on the graph on the top left, the world merchant fleet size is expected to grow moderately. It's not massive growth coming there. However, if you see the growth in the multi-fuel fleet, this is growing at a tremendous pace. Multi-fuel vessels are more complex. They require more service and we have a better market position on these vessels relative to plain vanilla fossil fuel vessels.
What is not included in the picture is there is also going to be a massive demand for retrofitting multi-fuel solutions on the existing fleet when market-based measures come into play. If you look at the world fleet, it's aging over time. Older vessels require more maintenance. If you just look outside the maritime market, if you look at the offshore business, our offshore installed base has also been growing in the last five years. The reason I flagged the offshore installed base is our offshore installed base is high-value installed base. You are looking at numbers 5x, 10x, 20x, depending on the kind of equipment that we talk about. Growth of the offshore installed base is super important, seen from a divisional standpoint.
When I look at just the market conditions looking forward, I would say they are fairly supportive, seen from what we have been witnessing in the past and compared to what we expect going forward. We've had Thomas talk about the energy transition today, the energy transition that hits other industries impacts shipping as well. As you can see from the picture, the share of multi-fuel vessels is increasing over time. In 2024, one in three vessels have been contracted multi-fuel. For those of you who are not familiar with it, a multi-fuel vessel is one where the primary fuel is either a low carbon fuel, could be LPG, could be LNG, or a zero carbon fuel, could be green methanol, could be green ammonia, backed up by a liquid fossil fuel. That is what you define a multi-fuel vessel.
What's driving this complete transition is regulation. Regulation from EU ETS, FuelEU, and IMO, which has got this carbon intensity indicator progressively tightening over time. That is what drives regulation, because increasingly so, ship owners have to pay a penalty or a tax on their greenhouse gas emissions if when you're trading into EU. What we expect going forward will be, this will be rolled out globally through IMO as well. If you put on a ship owner's hat here, and you see from an industry standpoint, green fuels at the moment are actually not available in any significant manner. There is no green fuel trading on the water today. No ammonia traded on the water, no green ammonia, no green methanol. If you need to bunker vessels in different ports, you need to have this trade going.
At the moment, it's zero. Ship owners, their strategy now is to say, "Okay, let me start with a fossil fuel vessel, dope it with HVO, maybe a biofuel, then eventually move to methanol." If you decide to go for LNG as a primary fuel where the infrastructure is in place, maybe you could dope it first with bioLNG, then go to e-LNG hopefully move to ammonia one day. Seen from a ship owner standpoint, the industry is moving to a structure where everyone is looking for fuel flexibility as one, then solutions around being able to deploy the clean fuels when they become available at scale one day.
The way we see this happening at this point in time is we have decided we will facilitate this transformation of towards the energy transition in three dimensions: energy efficiency, clean fuels, and operational practice. I think energy efficiency and clean fuels are rather similar to what is happening in the Energy Division as well. Operational practice is something probably is a bit more unique to what we are trying to achieve in the Marine Division. The reason to select these three dimensions is any fuel in the future, the one thing that is a given is going to be more expensive than the fuel we have today, as it would already be part of the mix, which means energy efficiency becomes paramount.
Clean fuels will come eventually. There is a need for the current solutions to be fuel-flexible and also a need for new solutions around deploying these new fuels. Finally, we know working smarter makes good sense every day, wherever you are, and we are driving this through our digital solutions that we have inside the Marine Division, primarily StormGeo. Let me give you a slightly deeper insight into what we are doing around each of these three areas. For one, we have started to extend our energy efficiency portfolio. I have given three examples. One is of a product enhancement, one is a new product, and one is a new technology platform. We have been delivering freshwater generators to the industry for decades.
Effectively, you take waste heat from an engine, and you use it to convert seawater into fresh water that you can use for portable duty on board a vessel. Our new generation freshwater generators, the AQUA Blue E2, uses 50% less energy for the same amount of water to be produced compared to our previous generation. This has been extremely well received by our customers. We have a very strong growing pipeline for this particular product. An example of a new product itself, we deliver cooling water on offshore platforms to FPSOs, to converter platforms for the topside cooling. These are Coming from Framo, and these are typically really large power consumers. This is just not a small pump.
A typical pump solution for something like this consumes 8-10 MW of power to be able to do the cooling duty required on an FPSO top side. On an FLNG, it's even bigger actually. The new product that we have developed is a submerged overboard turbine. When the water returns after cooling duty and goes back overboard over this big height, you recover the energy from the potential head in the water, and you are able to recover 20%-30% of this energy, and it goes back to the ship's grid. This product did not exist before we have produced it in Alfa Laval. It is becoming increasingly specified in new offshore assets being contracted today. We invested in the OceanGlide technology platform, 2023.
To those of you who are not familiar with it, effectively, this solution delivers a carpet of air or microbubbles between the hull and the water in order to reduce the frictional drag between the ship, so you reduce the amount of power needed to drive the vessel through the water. I must admit, this has been a bit of a learning journey for us as well, not just in terms of having the product to perform, because we have this sailing on 10 ships operational already. Even when we have been running this technology platform, there is no industry standard to measure how do you actually measure savings achieved by a shipowner when the technology is actually implemented.
Not only are we developing the next generation of product here, but we have been working with classification to develop an industrial standard of how to actually measure savings on a vessel at different speeds in different sea conditions and different heel trim, all the different ships, condition the ship has. There has been a lot of learning here, and we are releasing the next generation. We have actually already contracted two ships that will be where this will be deployed in 2025. In terms of the addressable market, all three solutions that you have in the, as an example here, can be deployed as a retrofit on the existing fleet and also on a new building vessel.
With a slightly more skew on a new building because the payback time on a new building when you don't have to retrofit is a little bit better on new buildings. In the clean fuels areas, we have a tradition of supplying fuel supply systems into ships. We have been doing for years in the past. Typically, it has been liquid fossil fuels. What it does is effectively it takes fossil fuel oil from the tank, brings it to the right pressure, right temperature, right viscosity, cleans it, and then make sure it's in the right quantity being sent into the engine for use in a ship's engine. We have enhanced this product in steps. First, we developed a system that could also do LPG. It went to LNG. We have then went on to methanol biofuels, and this year we have released the ammonia fuel supply system.
It's the first of its kind in the world. There is no other company who has delivered an ammonia fuel supply system into the world. It is going to be operational to one of the engine makers, WinGD, sometime in quarter four this year. We expect this will also be a good growth area for us going forward. Framo, as all of you know, deliver most of you think they only deliver cargo pumps, they do much more than that. They deliver pumps for ballast water. They deliver pumps for aquaculture. They deliver pumps for anti-heeling. They deliver a vast array of pumps. Using this technology platform, we have developed what we call liquefied gas pumps, the first version of which is an LNG fuel pump. It's a cryogenic fuel pump. The first unit has been delivered in 2024.
We expect it to be operational in 2025. This is sensitive technology, which means you really want to run, have proof of concept in operation, run it for three to six months before you really scale the platform up and deploy more of these towards your customers. The ambition here is the platform will be the same when we choose to go to CO2, and then we choose to go to ammonia. The very first product that we have out is the liquefied gas pump, and we are testing it at this point in time on board after we've had successful almost two years of testing and development in our own facilities in Bergen. We invested in the Oceanbird joint venture together with Wallenius in 2021.
In this product, what it does is it uses wind to be able to propel a vessel through the water. It's been a journey. We have been three and a half years into the product. We have gone from concept to design to prototype to detail engineering to building a supply chain. It takes time to build something like this. I always say that this is the first time ever that in the Marine Division of Alfa Laval we recruited an aerodynamic engineer into the company because we have actually not tried such a technology platform in the past years. It has been a good journey, and we expect that the first land prototype will be operational in Landskrona in the first quarter 2025, and the first onboard installation will be fully operational by the end of 2025.
Again, a very positive development in this area. Among all the different devices that we see in the market, this is probably the one which has almost the highest fraction. There are today close to 150 vessels who are already trying to use some form of wind assistance or wind propulsion. Again, the TAM, if I look for all these technology platforms, both retrofit and new building, but again, with a skew towards new building. If I look at operational practice, this is geared towards leveraging StormGeo, both standalone and together with the physical assets of Alfa Laval. It's about operational transparency. It's about better operational practice. Those are the two key elements here. If you look at StormGeo, they deliver their fleet performance management solutions. The team delivers about to 13,000 ships at this point in time.
We have developed a new software around emissions reporting and compliance planning. We have upsold, cross-sold these solutions to 3,500 vessels in the last two years, and these are all paid subscriptions based on the existing customer base of StormGeo. The simple reason for this is, this is mandated by IMO and EU. You have to report your emissions on an annual basis into the EU, the MRV or the DCS in IMO. Our Framo customer portal, it has been a real success. We launched this about two years ago, and we have 2,000 plus ships on the Framo customer portal within two years of deployment. Effectively, what it does is, it makes sure that you can monitor the health of your product on board. Is your equipment running well?
You're able to do service management, service manuals, you know, if you need, and with the ambition, maybe one day also to get to be able to order spare parts directly on the customer portal. We have rolled out or we have repeated this product for two more product verticals this year, our ballast water business and for our scrubber business. The reason we selected these two verticals was this is where our own data was of the highest possible quality. When you're rolling out something towards the customer, your data has to be 100%. There is no room for it to be 99%. It's like your bank account, you know. You need to know, when you click on your, on the, on the portal, is the number right? There is no 0.5.
Doesn't really work. It has to be 100%. At these two product verticals, our data quality is really, really high. Minimum viable products are now released in Q4 2024, and we expect that this will be rolled out into more product verticals down in the future. The reason I would like to highlight this particular initiative is the following. Increasingly so, irrespective of which physical product that you and I own, either in the private life or in the business vertical, our operating window to the physical asset has become the user interface, the digital platform. These interfaces tend to be really sticky. Once you get used to a user interface, you don't want to move.
The reason I want to flag this is, this is not just about monetization of the data and the health of the equipment on board. Actually, it's a tremendous barrier to entry, so that when the user gets used to your product, they just don't want to switch because they're really comfortable with the user interface. That is what we are trying to achieve here, and we believe this will translate into a better market position in capital sales and better prices in capital sales down the line. It's not about just monetizing our service business here. We decided to enter the bunker management space. About two years ago, we acquired the company BunkerMetric, 2022, and then we made a partnership with a company called NSI, who's a bunker broker.
The simple reason we decided to do so was we believe bunkering will get increasingly complex going forward. Today, it's about you pick up a fossil fuel either in Rotterdam or in Fujairah or in Singapore, and that's roughly it, give or take. In the future, you may have to decide, A, which fuel do you need? Are you going to bunker biofuel? Are you going to bunker methanol? Depending on the price in the market. This is going to be available at different points in the world. You have a ship's trading pattern. You need to make sure you make the best possible decision around the trading pattern of the vessel. You cannot leave that to someone who has been employed two years ago to make a decision like this. You need a system that is better than an individual.
We have rolled out this platform in 2024. Within the first year, we have more than 100 vessels trading 300,000 tons of bunkers on our platform, and we are on a path to go to four digit vessels here within one year, and we are very confident we are going to get there. When you look at the TAM for this particular area, it's actually the operating fleet. It's slightly different from the other two. The other two are built around new buildings that are retrofits. For this area, the TAM for this area is the operating fleet. 50 odd thousand vessels on which you can work with these particular solutions here in operating practice. If you want to see the financial impact of what we have achieved till date, it's not about the future, it's what we have done until today.
Five years ago, almost all our volumes around the sustainability portfolio came from two product verticals, scrubbers and ballast water. The retrofit is behind us, and we are still delivering the same volume based on what we have created around our multi-fuel solutions, our energy-saving devices. They have compensated for all the loss of volume we've had post the retrofit boom being behind us. If you take a slightly broader view of what we have developed, what we have invested in over the last four years, since 2021. When we were trying to put the picture together, my first thought was, because you don't see this every day, "My God, that's a lot," you know. That's what I had in my head.
You do this every day, you don't think what all has come into the picture, but when you put a picture together, my thought was, "Okay, we've done quite a bit in the last four years, actually." The red thread running through all of this is actually sustainability. It's either energy efficiency or a deployment of a clean fuel or operational practice. That's the red thread to all of this. If you look from an investment standpoint, it's a mix of organic growth, it's acquisitions and partnerships. The simple reason why we have selected these three pathways altogether is it's just not possible to take on all the opportunities that we have on the table by ourselves.
We simply don't have the capacity to do everything, and the opportunities are so many that we need to work both on the M&A side and through partnerships in order to get, capture the opportunities that is available for us now ahead of us. From a financial standpoint, we have meaningful volumes, but we don't have significant volumes as yet. There is a pathway to get to significant volumes. We need to execute on the plan, but we have definitely optionality and pathway to get to significant volumes in this particular area. Singularly, the most important thing seen from my eyes is how we have repositioned Alfa Laval as a brand seen in front of the customer. If you were to ask a customer five years ago, they would say, "Alfa Laval is a top-tier OEM," without exception. That's the fact.
Today, when you speak to a customer, they come to us when they think around how do I future-proof my asset? We have transitioned the complete brand into the company you go to to ask, "How do I plan my assets? How do I build my assets? What kind of fuel shall I use? How can Alfa Laval make sure that my asset, which has a lifetime of 20-25 years, on an LNG carrier, 35 years, is not stranded economically halfway down that pathway? I need to be future-proof. I need to be fuel flexible." They come to Alfa Laval for a decision like this. In summary, putting it all together, we see better market conditions. Looking ahead, we are very confident that energy transition is supportive to us.
Last but not least, we will continue to have a balanced approach where we work for the quarter, but at the same time, we still keep investing for the future, because in the end, the business needs to be get stronger over time. The well-balanced approach is really, really important.
I will give you a financial update, which is always a great thing to do right after lunch. I hope most of you will find it interesting enough to stay awake. We have named this financial update A Track Record of Profitable Growth. I think you will agree with me that by the time I finish this presentation, that that is the case. If you don't, we can have a chat afterwards. It is always a good idea to start with looking back a little bit at what we have done. We have been investing on a historic level for Alfa Laval. The numbers you see in front of you detail the investments we have made, not only on CapEx, but on OpEx as well, on R&D, and on sales and administration costs.
What's interesting with these numbers is that they represent a fantastic growth, they're in line with the guidance that we've given you in the past. CapEx over the last three years has, of course, to a very large extent been about capturing organic growth. We've invested heavily in capacity, that you have seen in the factory that you've walked through today. We have walked, we have invested in footprint. The building we're standing on or in is a representation of that is replicated in many parts of Alfa Laval, it's not unique to this site. We have also invested, of course, in upgrading our existing manufacturing assets. That keeps us competitive. We have also invested a lot in automation and optimization, that we will continue to do.
One of the divisions that stands out from a CapEx point of view is, of course, the Energy Division, where we've had a lot of organic or growth opportunities. We've actually increased our investment rates with 38% over a three year period. We haven't only invested in brick and mortar and machinery and equipment. We've also invested in our products. That we have done in the form of R&D. We have renewed our product portfolio. We are developing a lot of new products using proprietary technologies. This keeps us ahead of the competition. This is one of the key differentiators for Alfa Laval. It is that we develop the most advanced products within the fields that we operate in. It makes us the technology leaders.
SG&A growth that you see here for the three divisions is not only the addition of colleagues that we have done over the last three years in order to follow growth. It's also an investment in local presence. It's an investment in service capabilities and presence. It is an investment in digitalization, it is an investment in application expertise. It goes well beyond just, you know, feet on the street. This is what we've invested in the last three years. Has it yielded the growth that we would expect it to? The answer is actually yes. Over the period of 2017 to 2024, we have grown with 9% per year. You'll forgive that that is not capital sales, that is on a total level. We have had three distinct periods of growth.
One that came when we went into the new organization with a product, with a product-driven business units. That ushered in the first sort of phase of organic growth, and you see it very clearly between 2017 and 2020. That was really a renewal of the products that we had. It was a development of the products that we had, but it was a time when we went deeper into our product knowledge, which meant we started to have a different dialogue with our customers and the market, which led to get a lot more insight, which was going to generate the next wave of growth, we thought. COVID hit, and we had a contraction of volumes, but not everywhere. Food & Water continued to grow during the pandemic period, whereas Marine Division and Energy Division had a tougher time.
Came the second phase of organic growth that was ushered in really, around the beginning or end of 2021 with the culmination of a lot of the COVID lockdowns. What's interesting with that growth is that it was ushered in by three big trends that continue even today. It's energy efficiency, energy, sorry, the new energy landscape, decarbonization, and an increased demand for power. That stretches across all three of the divisions. The growth we have seen over the last three years, in other words, that is 13% per year on capital sales and 15% growth on service. I would say that the investments that we have made have paid off quite handsomely, at least when it comes to the turnover. How does it look in actual profitability then?
Well, the profitability curve tells two stories. It tells a story of a decline that started to happen somewhere around 2021, and that was based very much on the need of restructuring of two of our business units. One was the Welded Heat Exchanger Business Unit, and the other one was the Heat & Gas Systems. I will come back to the restructuring of one of them in a case story a little bit later. We have been successful with that restructuring. We also had to deal with a backlog that was a little bit out of phase with the inflation that we saw directly after the pandemic. We had to deal with that. We had imbalances in some of our product groups in relation to the utilization of our assets. We have come through that.
In fact, we have a really good utilization rate in most of our factories, save for a few investments related directly to heat pumps, and I will come back to those as well. We have a situation here that by the beginning of 2023, we took a directional shift upwards towards where we are today at 16.5 on an LTM basis. What that graph doesn't tell you is that the mix is not the same. It's still 30% service in the mix, which means that service has kept up with the growth of capital sales. The growth in capital sales has a much larger component of project business than it did in the periods before. That's something I think you should take with you when you do your analysis on Alfa Laval.
The 16.5% adjusted EBITDA margin yields a net income of SEK 10.2 billion on a last 12 months basis. That represents an earnings per share of SEK 16.67 or an increase of 9% for our shareholders. I think that's a pretty good development over the last 12 months, and that has been the development that we have seen in the last 24 months. We have also increased our dividend with 15.4% in the dividend payment that we did this year. We are returning money to our shareholders. We have a backlog that comes as a result of the healthy order intake that we've had so far this year. In fact, we have a record high order book at SEK 52 billion. The quality of that backlog is high.
In other words, it is in good sync with the material cost price, the material costs that we have today and the other inputs that we have into our manufacturing system. It's a backlog that is well in tune with the cost picture that we have today. SEK 15 billion of that is for invoicing this year. Some of it probably will slip into 2025 if experience is something to go on or history is something to go on. SEK 37 billion of that is going into 2025. About half of the SEK 52 billion that you see there is marine backlog.
Also important to bear with you, I would say that the SEK 37 billion 2025 puts us in a pretty good state when it comes to revenue, revenues next year and the in for out required to reach a similar level of revenue as this year. That profitability has also generated a fantastic cash flow development. I would say over the last five quarters, we've seen a real high yield or conversion from profit into cash flow. We have 10 quarters behind us of disrupted supply chains that came as supply chains were disrupted after the pandemic and after, of course, the explosive demand that happened thereafter that nobody anticipated.
That also meant that during that period of disruption, we allowed ourselves to build up a bigger inventory, and we allowed ourselves to have a larger, or should we say, more generous payment terms with many of our suppliers. That meant that the operating working capital balance to invoicing fell out of sync. We were above 25% in proportion or in relation during the period of those 10 quarters. Beginning of 2023, we said, now the situation is normalized. In other words, we need to put in initiatives to make sure that inventory falls back into a relationship with invoicing that makes sense. Of course, we started the initiatives to control and discipline our operating working capital.
I would say the yield that we see now during this year of SEK 8.1 billion in the first nine months of the year testify to the fact that we have established that operating working capital balance to invoicing again. When we departed Q3, it was at 14.9%, which is on the low side of the range that we have set ourselves. We've said that we want to operate in the range between 15%-20%. Return on capital employed is on a very good level, 22.8%. Of course, some of that has to do with the fact that we have finished the amortization of step-up values on many of our larger acquisitions that were made some 10 years ago.
If we look at the same figure, return on capital employed, excluding goodwill and excluding step-up values, then it's at 58%. If you look at it historically, it's been above that 50% line for quite some time. I would say that we are generating a good profitability on everything we invest and everything we put into our capital. This cash flow has also allowed us to finance completely from funds generated by the business when it comes to our OpEx investments and when it comes to our CapEx investments. We haven't, in the last 36 months, borrowed any money in order to finance any OpEx or any CapEx. The cash flow has been so positive that we have also taken the advantage to service our debt, and we have deleveraged with SEK 5 billion over the last 12 months.
That's a substantial strengthening of the balance sheet. You may be wondering, what are we going to do with this strengthened balance sheet? The first topic on that is, of course, how we grow inorganically or through acquisitions. A couple of words about acquisitions that we have done and the track history that we have about acquisitions before I continue into looking at in a forward-looking manner. That is we have a history of good acquisitions. In fact, we have not written off any goodwill related to acquisitions during the last five years. I think that's a strong track record. We continue to buy quality companies, and we will continue to be buy quality companies, keeping a discipline on the due diligence that we do.
We also want to pay reasonable multiples. Nonetheless, we have a pipeline of acquisition candidates that we're working with right now, and we hope that in the not too distant future, we will be announcing some of those acquisitions. There's three very distinct strategies for the three divisions when it comes to acquisitions. With the Marine Division, it's very much about expanding the product portfolios for existing customers and maybe a bolt-on acquisition for the digital services that we currently have and that we have expanded our software suite. Food & Water, it's more about a broader portfolio in relation and generation to food applications. Desmet is a pretty good example of how we go to market to expand our reach. A bolt-on product is, of course, also interesting here.
The Energy Division, it is an acquisition, a technology acquisition to further our opportunities in the new energy landscape. Of course, we also want opportunities around service capabilities and digital services. It's not only about inorganic growth. We're gonna continue to invest in our organic growth. We have a CapEx program that looks forward. If you look at the CapEx program that we've had so far, it's been very much, again, around capacity, footprint, and automation and restructuring. That is what we have spent the money on between 2022 and 2024. We expect to continue to invest in all our businesses over the period of 2025 and 2027.
The guidance that we have currently of CapEx in the range of SEK 2.5 billion-SEK 3 billion over a year is going to continue, going forward for the next three years. You can expect that that investment tranche is going to be a little bit different than the one we have done now. It's going to be less footprint, and of course, you see that in the percentage of machinery and equipment of each one of the CapEx categories. It's going to be also very much in line with making sure that we have scalability, that we have versatility or interchangeability, and that we have automatization and optimization of our processes.
I should also say that the third part of our capital allocation is, of course, a dividend, and the dividends will continue to be paid to our shareholders in line with the dividend policy that we have stated. Now, if you allow me four business cases, and four business cases to a little bit enlighten you on how we make our decisions, how we look at things, and how we, how we formulate a long-term vision. What's going to bind all of these four cases together is that there's a long-term view. There's some short-term actions, but it's very much about the long term. Framo, which is a company most of you are acquainted with, was an acquisition we did some 10 years ago. They're the undisputed world leader when it comes to pumping systems for tanker applications and offshore applications.
They have, by all means, a profitable business. Between 2018 and 2022, the contracting of tanker vessels and offshore platforms was on a record low. We had a period of quite large underutilization of our manufacturing assets in Bergen, and we had a lot of people that were, by all means, application experts and very talented engineers, but had somewhat little to do. We could have made the decision, of course, at that point in time to say we could rationalize footprint, reduce production capacity, and lose some of our colleagues. We would have lost them to a region that would have absorbed them directly into the oil industry, which means we would have never gotten those people back.
Instead of taking a rash decision, we did take a look at what does the market really tell us, and what does the market intelligence that we have today tell us? It tells us that tanker contracting and offshore has been underinvested for a really long period of time. Reasonably, within a reasonable timeframe, we should see a resurgence of that contracting. Rather than reduce that business, we said, "Let's put that business in an R&D mode for that time." We have developed new products. We have developed a more efficient pumping system. We have developed the energy efficiency lift recovery system that you saw Sammy present earlier today. We have also ventured into fisheries through our aquaculture initiatives. Of course, we have developed a cryogenic pump that you saw Sammy also do.
That has been done during that period. Now, 2022, at the end of 2022 up to date, we've seen a return of all of the activity around tanker contracting and offshore. That means that we have been in the perfect position to be able to capture all of the business that we have selected and that we have said, "This is the business that we want to have in Framo." Today, we have a full order book. We wouldn't have been able to do that if we had taken a short-term decision at that point in time.
Another case that I'd like to highlight, of course, Tim did us the favor of explaining Desmet in quite some detail today, so I won't go into the same detail, except to say that this is one of those decisions where we sat down and looked how do we increase our exposure in the Food & Water Division going outside of the areas where we traditionally work. Of course, it fell on biofuels. We want to have a larger exposure to biofuels, it fit perfectly well. I mean, it fits with the way we work. It fits with the way we engineer. They use our decanters. They use our separators. They use our heat exchangers and our boilers on board. There is a lot of synergy from a product point of view.
It also expanded our upstream exposure to animal feed and our downstream exposure to oleochemicals. That opens up a new avenue and a broader spectrum for us to develop further products on. That is really the rationale for it. In 2023, we had a fantastic development of Desmet on the top line and very much driven by the prices of edible oil and speculation of the developments into biodiesel. In 2024, we see a somewhat more normalized demand around biodiesel and biofuels.
We see that the case that we committed to when we did the acquisition is sound and validated, and we continue to be excited about the opportunities of developing new products and continuing to operate in these markets. Let's talk a little bit about where we are today, which is the third case that I'd like to bring up. Today, we are the product technology leader in this business unit. That wasn't always the case, and we have been on a strong growth trajectory since 2017 in this business unit.
We work here with 50 very large key accounts, which gives us an enormous access to the market and enormous access to the insight of what's going to be happening in that market, which also made us be able to anticipate and take a courageous decision to make the investment that we're sitting in today. It also means that we have a tight dialogue with our customers who expect us to invest with them. When the sort of the conspired variables that Thomas mentioned earlier, you know, with the delta between the gas and electric price, national security, the invasion of Ukraine, subsidies being generous led to a super boom in heat pumps. Our customers turned to us and said, "You're the supplier. You're the preferred supplier. You are the technology leader.
Will you invest with us?" Our decision was to invest with them, and you saw a lot of those investments today. We also knew that the product that we have here is a versatile product. It just does not only go into heat pumps. It goes into air conditioning systems. It goes into process chillers. It goes into data centers. It goes into oil cooling. We knew that should the heat pump opportunity not immediately materialize or materialize to the same in the same speed and magnitude that we have anticipated when we did the business case for the investment, we knew that there were other legs to stand on. We knew that there were other industries that would come to grow, that's exactly what's happening right now with data centers.
Product versatility here really plays a big role in what we do, and standing close to our customers plays a big role. We continue to invest here, and we continue to invest in the entrepreneurial spirit that also exists on the site. Today, we are the technology leaders, and we will remain the technology leaders here. The final case that I have for you today before I go to my closing remarks is really around the Heat & Gas Systems, where we have had a boom and bust cycle, I think it's fair to say. A lot of you should remember that in the not-so-distant past, between 2018 and 2021, or even 2017 to 2021, we really had a star here in this business unit. The scrubber volumes were on an all-time high. The ballast water volumes were on an all-time high.
It was all legislation-driven, and it was also driven in a retrofit window. We knew there was a retrofit window. We did everything we did to build up a lot of capacity in order to fit that retrofit window, knowing that four years later, we were going to have to contract down that capacity down to normal shipyard contracting patterns. That's a big ask. We were able to, of course, capture a lot of volume and a lot of profitability for us and, of course, for our shareholders. What also happened at the same time was that there was a competitive landscape shift. Being a Western-based manufacturing was no longer viable from a competitive point of view, and it was no longer seen as a competitive advantage either by our customers.
That's a fairly important input. We knew then that we needed to make a change, and we did make a change, and we have moved consequently most of the manufacturing, the engineering, and the logistics services around this business unit to our manufacturing unit in Qingdao, China. That is close to where 60%-70% of the shipyard capacity is today. It makes a lot of industrial sense as well. That was one part of it. The other part is the multi-fuel opportunity that arose then for boilers. That meant that we needed to develop a new boiler range, and it gave us an opportunity to, once again, through technology, differentiate ourselves from our competition. That has proven also one of the recovery momentums that we have in this business unit.
Again, taking a long-term view, understanding our customers, looking at the market, that's what really binds these four cases together and in many ways encapsulates how we think. I'm gonna close my remarks with giving you a sort of overview of what we have done in the last three years in relation to the financial targets that we have. I think it's safe to say that we have outpaced our growth targets by quite some margin. We have grown with 21.1% per year over the last three years. Of course, it has been an explosive growth, and you saw that in the order intake graph that I showed you from the beginning. Adjusted EBITDA over the last three years has averaged above our target at 16.3%.
Then we have dealt with the restructuring. We have dealt with a backlog that was out of sync. We have dealt with inflation, and we have dealt with a myriad of other elements. I would say that's a job well done. Then we have a return on capital employed at 19.3%. All in all, I think the status is that we are in good shape from a financial point of view, and we have a position that allows us to continue to grow both organically and inorganically, and we look forward to that journey. With that closing remark, I hand over to Tom.
Thank you for that wonderful music. It's been a long day and a lot of facts feeding. I just think we round this off the last half hour with, you know, a little bit lighter. I'm gonna be temporarily a real estate manager and show you a little bit, what did you as shareholders get for the money? Fredrik gave a number of SEK 6, 7 billion in invested capital over the last few years, some more to come. I figured I'd give you a little bit sort of a rundown on what you've seen and what you haven't seen. I just want to remind you that, you know, we are in San Bonifacio. We are in one of the four units, in one of the 15 business units, right?
That is what we're seeing today, and we are here because we had to pick some place. We could be in 15 other units somewhere around the world, and you would see something similar. We didn't take the worst unit that we have, right? I mean, I just, you know, it is not all that unique. It's different. It's built on different success factors. We think this is a good place to be, not only because it's a place we invested, but we wanted to show you a little bit the story of the energy transition, right? For that reason, it fit very well for us to be here.
What we're trying to showcase to you a little bit is I'm not gonna convince you of any targets. You know me well enough, that, you know. You make your own conclusion, on what you think. We think it's prudent that we try to share, you know, the market and the trends the way we see them. What we have in our co-cockpit when we make our decisions, whether it's capital allocations or whether it is in terms of how we do the business planning, going forward. That's kind of, what we are wrapping up now in that session. I will touch on these things a little bit from the point of view of scaling because we are, as you've seen on the financials, these numbers kind of, they don't happen.
You know, they are planned and executed and all of that. How we scale the businesses has perhaps been the most difficult issue for us over the last few years, and it remains the most difficult issue. As you've seen from some of the presentations today, you know, how fast hydrogen will happen, not happen, how fast biofuels will happen, not happen, how fast a number of the other verticals that we are in are gonna happen and not happen is difficult. I'll give you a sense for how we're doing that. You've seen the scaling here, and I think what you should bring with you from the factory visit is that what you saw was not a scaling on the existing manufacturing technology, right?
When we went up in mass volumes, we were looking for new ways to scale into a different process, to get the economies of scale and not just modularize another press, another furnace, another this. Unless you build, you know, structural competitive advantages over time, it's gonna be really easy to copy us down the road. I think, you know, if you think through everything, you see have a sense of how we think about competitive barriers in our businesses. You can see the difficulty of scaling here, you know, based on what you're seeing. We scaled too quickly in hindsight, right? Is it wasted money or is it You know, we put a few hundred million EUR onto this and the other units as well known. There are still equipment coming in.
Two years ago, we felt we were too late. This year, we think we were too early. I think 2025, 2026, we will moderate out, I think somewhere in between. We'll get back to growth, as you've seen. The service business we talked about, you've seen some pictures of that already. Service needs scaling as well. The most structural scaling we do is that today our service centers are being industrialized in a way we didn't do before. Digital condition monitoring systems and other tools is making our service work more efficient. The training programs for our service technicians is getting professionalized. The industrialization of the service business is very, very important.
T he most physical expression of that is the fact that you need warehouses. And here you see two warehouses. None of them exist. Lund is almost existing, at least in terms of roofs and wall. Operation is starting beginning next year. We are consolidating, it's a major facility. In fact, those who were on the tool workshop today, heard that there was a discussion on the new tool factory in Lund. It is, I totally agree, one of almost strategic assets. Right here, you will potentially one day, see the world's by far largest, best, most sophisticated tool manufacturing unit in pressing technology. We're happy about that. This other one is Indianapolis, and it's not entirely a warehouse.
It's larger warehouse, but it will also allow us to move manufacturing for fluid handling pumps and valves and build that structurally stronger in the U.S. Eventually we will see how far we go in terms of the space for warehousing. This is a warehouse for small SKUs. This will follow the implementation of automated warehousing systems that we use in other parts of the world. We're getting the service technology, the distribution of spares, and small SKUs into a very good structure in North America. We're spending a lot of money on these two examples on the warehouse. It's not the only one, and there's more to come in the future. Service business. Technology development is ongoing. We are a 140-year-old company, and we started with separators.
We are still doing separators. Emma told you the stories of some of the separator technology that is rolled out right now. Sometimes you can't help looking at the development engineer and say, "You know, why did it take us 140 years to figure this one out?" In reality, Well, it took Sammy, right? Give you some credit. In reality, things get better. Our only competitive advantage is not in what we have today, it's what we're gonna have tomorrow. This continues. What you see here is then a needed change for our facility in Tumba, which has been the high-speed separation center for years and years, and was just not right anymore. The big part that was not right is actually this dark part.
That is an 8,000 sq m lab, pretty advanced and heavy lab with security zones and whatnot. That's tough to move a lab into a city. We are. We found a great place. We're coming closer to the city center. Obviously, we're not in the middle of the city, we are in a very central point south of Stockholm still. The rest of what you see is about office space and customer space for about 700, 750 employees, mainly HSS, High Speed, partly also the Marine organization in Stockholm. It's a great transformation. What happens on the technology lab, I'm sure we're gonna have a capital markets day there eventually.
We obviously This is our heritage, so it's a big thing for us. We're doing lots of things in development still. There will come new generations. One of the things that is happening connected to this is related to the digitalization, and, you know, beyond AI. There is a number of things going on inside the separators. Today we have sensor technologies for, you know, the traditional vibrations and temperatures controls, but we can also read what's happening in the process. Today, remote diagnostics, remote control is driving a lot. What can you do with the data? You can do a lot with the data when it comes to AI. Today there are troubleshooting service programs being developed in that direction. There are product configurators being developed in that direction.
Across the company, we are probably working with some 20 use cases between us and customers in order to validate where will this take us and how will our customer interface and our customer service in terms of where do we need to engage personally versus where can we automate part of that. I am personally not a big fan of paying Microsoft billions of dollars in order to have my people doing slides or executive summaries with AI. I think doing the work yourself is a way of learning. I believe design engineering is a way of learning. You know, so I don't like the cheating part of it, but the automation part in terms of the customer is something that I like.
I envision that we will have limited amount of licenses and not Copilot licenses for $10 million every year for every workstation we have in the company. I think we will see where the hack goes. When it's time to pay, I think a couple of people will choke, including myself. All right. That was one for, you know. With that said, we are building the data center, so we're really happy about everybody who wants to have Copilots. I think it's a wonderful tool for everybody else. We're gonna need to travel on that one. On the geographical side, let me reflect on two.
This is our unit in Qingdao, China, and it has over time gravitated to become, you know, the big marine center for us, not only in base manufacturing of boilers, but, you know, in a broader way, and I think we will continue to build on that. We have continued to invest in China. We don't believe geopolitics will kill shipbuilding. As Fredrik said, when two-thirds of the world's ships are being built in China, you know, that's not gonna change tomorrow. Japan is decreasing. Korea is not going particularly anywhere. The, you know, new yards around the world are few. There's a couple of cruise yards in Europe. China has to build the ships, or we won't have any.
We believe this is, you know, more than half at the moment of our Chinese exposure. We're big in China, but this part of the business is Western companies specifying our equipment to be assembled and monitored in China. We believe that business model will hold. We are all in. We are not de-risking, you know, this is the way to market for us in the marine industry. If you think that everything is Alfa Laval, then maybe you're a little bit worried and say we went overboard. You know, coincidentally, all the blue roofs are not ours. The rest is. It's still our, worldwide our biggest unit. The China buildup structurally, and we are large in three locations in China. This is one of them.
The structural buildup with China as a growth market and China as a manufacturing hub, that structural buildup is over. We are doing some adjustments and additions and whatnot, but, you know, it will not be a magnet for our CapEx in the future. The big question we have in Asia, if you think about us, we are 45% Asian in terms of our end customers today. It's a matter of time when until Asia will cross the 50%. We are extremely exposed and engaged in the Asian continent. Of course, the question is what's gonna happen after China? We've been in India as a manufacturing company since the 1960s. We have a pretty good presence in certain technologies there since decades back.
We really started India in order to serve the local market. We have been waiting for India to leave, you know, the development country type of mentality with import tariffs and bureaucracy and open up in free trade agreements, so that we could develop India the same way we did in China 20 years ago as a manufacturing hub and an export hub for at least for the rest of Southeast Asia. We are not there yet. The only FTA that exists of any importance is between India and Malaysia, and that's not good enough for us. We, we are a little bit holding our horses, but with that said, here you see, the one unit.
The building wasn't so. It's not new, and it didn't look so impressive, we had to put the, you know, the equipment inside because that is actually what matters. You may recognize this sort of press technology from what you've seen here. It's a much larger press, we are building our manufacturing, continue to build our manufacturing cautiously in India. We're not all in yet, if India doesn't resolve itself in the next few years, we may be forced to find a different footprint solution for Southeast Asia for the next 10 years. That's kind of where we are on the scaling in India. There is a lot of new technology happening. You've seen some of that then. In those areas, more often than not, we need specialized production technology. We spoke about metallic bonding here today.
There are other bonding applications. What you see here is a printed circuit heat exchanger used in other things, among other things, for fuel station for hydrogen, which we thought were gonna be huge in France a couple of years ago, it didn't quite happen. You know, we're selling a lot of these already. We had the technology in a very small scale in Korea, we've been taking it to France. This is one of the two furnaces put in there. It's super expensive furnaces. It's a very advanced thermal program to get this right. They are hard to make, but we have figured out a good way. We are expanding the technology here on one of our site in France.
There is a lot of You know, this would remind you of the story you've seen here. You know, the type of problems we are trying to fix, the type of issues we are facing from a technology point of view. That's sort of where the SEK 6 billion plus has gone, and as you saw a couple of billion SEK will be spent in the years to come. The single most important investment decision in terms of size that we have ahead of us in the next 12 months or so, is how to deal with Framo.
I think you heard the story from a couple of perspectives during the day, this is a shot of the old Framo, one of three Framo sites in Bergen, with a head office, a wonderful swimming pool that was built by the previous owner. Not an executive swimming pool. A swimming pool that people can use as swimming, actually. Overlook the fjord. It's a beautiful thing. Here is the service workshop, the manufacturing units are in two different locations. When we bought this in 2013, we bought what we felt was, you know, not a structurally growing business, a very healthy, profitable unit with a very dedicated market segment. You know, at running at a turnover at around SEK 4 billion, right? That's what we bought.
If we look at it now, we have a service business covering a whole range of product, including offshore, including products from Baker Hughes and Sperry and a whole bunch of equipment and suppliers into the offshore industry that does not have local service capabilities. If you come into that workshop, you can pretty much pick every brand that you want in offshore, and you will find it there. That business, including our own installed base, as Samir was alluding to, is significantly bigger now. This service workshop is not enough. On the offshore, we bought an offshore business of about, Samir, I don't know. Where is Samir? Yeah, about, I think, SEK 1.5 billion or something like that, right? At low profitability.
Today, we are running it at above group average in terms of margin. It will go volatile, but I think structurally it's doubled easily. Then we have the cargo pumping, apart from the aquaculture and apart from the, you know. You can see, you know, we now have a company which probably is about twice the size. It's not just a matter of contracting for product tankers is high. In terms of invoicing over the next five years, you know, we don't expect this cyclicality. We think we have doubled the company. Structurally. Of course, this whole thing then, not specifically the head office or, you know, but, you know, the infrastructure in those three units are simply subscale.
Well, it depends, Mr. Chairman, if the board decides that we should go forward. I'm really trying to sell this. We have some future decisions. There are a few others, but this is the single one most important strategic for us to take and do in the right way. Is scaling all about bricks and mortar and equipment? No, it's not. If you think about us, you know, going after acquisitions, after broader product portfolio, after, you know, numerous brands, numerous operating models, suddenly Desmet comes with a different model and a different governance. You know, we Fredrik is proud about our avoidance of impairment, and so am I.
What has been the secret for avoiding impairments other than being reasonable in terms of acquiring companies? We have put the acquired company's focus and development ahead of synergies, right? We have not overly I think, Tim, you would subscribe to that. We have not overly interfered in telling you how to run your business. That gives a very nice, you know, feel for joining the family. We always say, you know, "Well, you know, look at us, and there is a menu of options. If you want to use them, use them." You know, our operations development team that has been working here, you met some of them, they are available to the rest of the company as well. You know, we don't throw them on them unless they are asked for.
It's a really nice model, but eventually you gotta ask yourself, "Is this scalable? Does it come a point in the growth of a company where the complexity start to get a little bit too high?" We decided for various reasons that this was a good time to think through. If I would catch it in one word, I would say the operating model. That is, you know, how do we function, you know, from the market, from the customer, you know, to our brands, to our sales organization, to the financial reporting.
I don't think we're gonna end up in, you know, dramatically reshuffling the whole company a year from now, but I think we will develop a sense of a road plan for, you know, how do we need to keep this complexity side under some level of control in order to not end up in just being, you know, outgrown in all dimensions. You know, you see a number of headlines here, the operating model is the key.
One of the reasons that we thought the time to deal with this was now is that Nish Patel, who is somewhere there, as you met many times running the Food & Water division. This is a difficult process, and it needs to start with the customer, and it needs to build the confidence internally that we're doing a good business decision on this. Nish accepted to lead this process over the next year and a half, and I'm very happy to that. You will not hear a lot about it. We always feel that, you know, the laundry is cleaned behind the stage, and we talk about the business and, and the customer. You should know that we are working through this a little bit. We are addressing this question in order to continue the growth.
How does the growth look like going forward? I'm going to give you all the detailed sales numbers for the next five years. Okay. Do you remember in Copenhagen two years ago? A lot of you were a little bit sort of concerned how do we, you know, read all these projects and the Oceanbird and the beer concentrates and You know. We were all over the place. From a divisional point of view, it was a little bit hard. We tried to create a, you know, a bit of a model to describe our growth in a different way. We did the three buckets of growth. Most people kind of liked it, thought it was an interesting way to look. You know, You know, it's not our financial reporting system.
I said, you know, "You will hear every year how we're doing on this." We keep sticking to that promise. This is a little update. For those of you who were not been part of this, the logic goes like this. On the evolve side, we said we are pretty comfortable with our traditional business in Alfa Laval. Take the service business, you know. We like it. We continue to do with it. It is the same business it's always been. It's our core, as is fluid handling and a number of other things that we've done for years and decades. Nothing's changed. It's just, you know, good business practice. Let's drive the evolve in a good way. We like it. It's the foundation of the company.
We have certain parts of our portfolio of existing technology that is applicable into the energy transition. The heat pump side is such a thing, right? We don't need to reinvent. There's an acceleration thing that comes from the discussions we've been having around biofuels and we've been having around a number of the trends that we've been looking at. We can argue about what is the underlying structural growth in those. In our mind, what we were trying to tell you is that if those things develop in a way, it may potentially, possibly, everything else being equal and with a little bit of luck, we might have a slightly higher growth rate in this bucket, right? That was the argument. No promises, only a way to make it a little bit easier.
Then we had a whole bunch of new initiatives in new areas, in new technologies. We have never done wind propulsion for ships before. We didn't know that market. We didn't know if we could get the system to work. We don't know how many is gonna make it. We didn't know the engineering drawings for it. We didn't know how to manufacture. We decided that from where we were and the customers that we had and the solutions they were asking for, we thought we were in a unique position to try to test a few things here. This is, you know. You tested personally the beer concentrate two years ago to just get a flavor. I think we might sell the first system beginning of next year, I hope.
It's, you know, I mean, this doesn't make any difference on the top line as such, but this was the logic behind the things, right? Let's take them one by one, where we were and where we are. What you will see is the numbers in 2022 when we first launched this, and I was a bit nervous because what's gonna happen, you know, years later, somebody's gonna hold me accountable for this whole thing. How is this gonna work, right? You will see the 2022 number and the 2024 number. It's not a CAGR number, it's a two years. Okay? Are you ready? All right. Do you think we grew in evolve?
Yes.
You think, yeah. Somewhat, right? Okay, somewhat. Here is the evolve. It's 25% over the two years. I think for the slow-growing laggard business of old traditional engineering industry, that's not too bad. Not too shabby, as Fredrik's predecessor would have said. We were at SEK 40 billion at the time. In 2024, LTM, we are at SEK 50 billion. Anybody who can guess what this product is will get a beer if you're not employed by ABB. You get a beer. It's the top part there. Okay, very good. Yeah, you might get a second chance on something more complicated. This is what we saw on the evolve. On the expand, you know, fortunately, I'm happy to say that we grew a little bit faster.
The expand part, despite the fact that there are some ups and downs and difficulties to read the pace and difficulties to deal with the scaling on each individual thing, we're actually 50%+ . A different shift in pace in this bucket, and we've gone from 15 to 22. I'm not gonna ask you what product this is. You don't get a beer for it. When I saw that number, it was like, yeah, okay. The question is, what happened to the explore bucket? You know, it was not very big, 2022. It's still not very big.
Remember the comment at the time, we said, the reason we started it, I think about 2021 or so, we said, you know, we think there is about a SEK 10 billion revenue opportunity by 2030. That's why we were doing it, right? We're not doing it to generate SEK 1 billion or something like that. Here's where we are. It was 1 at the time. It's still not, you know, changing the world, but it's two. The nice thing with a small revenue number is it's easier to double it than when you have a big revenue number. It's actually moving. The digital side is moving. The single-use separator, which we developed just around that and put to the market, is growing nicely.
The Oceanbird is developing as a technology project nicely. The hydrogen applications you've seen downstairs earlier today, in terms of the customer interaction and what we think we potentially can solve for, we still feel good about. Energy storage, more complicated than we thought. Out, you know, the Revos beer concentrate, it's still a cool idea. A lot of breweries like it. You know, some time has passed, and we haven't sold it. You know, next year, we will sell one. You know, what we said was everything will not succeed. We are placing our bets in things that we think make sense for us and our customers, and we will allow ourselves to fail a few and cut a few off.
Our, our read is that we are still on the path towards the 10. I remind you that if big part of the 10 is in wind propulsion, you will not see it in our accounts because it's a 50/50 joint venture, so it will be a minor You know, it will be handled differently in terms of consolidation, I think. Nevertheless, we will take the benefit of including that in the We might get to 10 anyway, who knows? Okay, that is the explore side. The question is, you know, are we betting the firm, right? Are we a riskier investment now than before? Are we in an aggressive way exposing us and our shareholders to excessive risk in new technology?
The answer is, yeah, we increase the risk, but I don't think we're betting the company, or rather, we're not. I think the best way to look at it is on a CapEx side, right? This is a CapEx distribution between the three buckets. As I think you've seen and heard, we continue to drive our business and evolve. It's our foundation. It keeps our margins, it keeps our, you know, our growth. We are super happy on that. We are a little bit heavier on the expense side with a 50% growth. That sort of goes without saying that, you know, it requires a certain capital investment, and the explore side is five, right? At an annual budget of CapEx of SEK 3 billion, that would put a number of about 150, I think.
I did the calculate, yeah. If all of that doesn't come through, so be it. We think that is a, you know, manage risk exposure into some new opportunities that 10 years from now may prove very, very important for us as a company. That's kind of where it is. Where is this all taking us? Some people already back in Copenhagen two years ago ran the calculation, came to SEK 100 billion. I'm not giving anything else than a conclusion when we look at where we are in the structural growth phases, in how we see our opportunities in the explore bucket.
If we add the fact that our firing power on the balance sheet for some additional M&As in the years to come, I would be somewhat disappointed if we don't get to SEK 100 by 2030. That's the path we're on. Are we immune against geopolitics? No. Are we immune against an increased war situation in Europe? No. Are we immune against tariffs in U.S.? Probably not immune. You know, we can all, you know, you have to make your assessment about what you see, but our business planning is not based on the world falling apart. Our business planning is based, you know, under reasonable conditions, under a reasonable development.
We are, you know, the reason we are scaling and spending another SEK 6 billion in the coming years is that we are in a scaling process, and we're gonna stick to that business plan until the market tells us otherwise. Not so hard. Is that all then? I think there's been some reflections during this day on the importance of the organizational model that we went into has been fundamental to achieve what we're doing. The way we dealt with the people issues in many ways, including what Fredrik referred to in terms of when do we pull the plug? When do we put next quarter ahead of next year?
You know, I've said it to you a number of times that, you know, any monkey could bring our margins up in Alfa Laval with a percentage point or two. That's not the problem for next year. Our question is, you know, how to get to the 100 under a solid profitability development. That's, you know, that's the maneuvering that we think is needed for shareholder who has a 10-year perspective. For a hedge fund with a quarter perspective, it's a different story, but that's not my customer.
This is, you know, we think a lot about, you know, the application side, how we drive the R&D long term, you know, how our organization is fit for the scaling that we need, and without the commitment of the people, including the ones you met on the shop floor, including the ones that today is living in the hardest financial conditions in this unit, right? After EUR 100 million and the customers sort of slack just as we were ramping. It's a hard situation, you can still see the energy and drive in getting this business to work. They've done it fantastically over a difficult period. We're gonna get into the better quarters in the near future, also in this area. You know, we'll keep it together. Growth doesn't happen.
You know, you generate your growth. It's not a matter of just a growing population and everything else is being solved. It's the dedication, it's capital, it's driving the organization, it's the people, the way we look at it. That's the zone we are in. All right. Sorry. We have managed carefully on the product portfolio. There will not be another beer. I can see. You know, at the end of the day, we have no future without the right product portfolio. We know that, you know, today we are different than 10 years ago. 10, 20 years from now, it's not the current product portfolio that's gonna cut it. It still exists, but we need to evolve. That's why we are working hard with the product portfolio.
We haven't talked about it for a long time, but when we created the possibility to move to here, the first decision that we had to take was to sell the air heat exchangers. We decided to exit that business, got it away. It liberated the whole way we could think about the focus in the business and the way we could build up the manufacturing unit on high quality and high value add versus an assembly business that had completely different characteristics. The move that we did in 2021 was also a portfolio move.
We've done a number of those, and we have some divestment candidates also for the future, not because they are low performers, but, you know, there are some businesses where we have a nice business of SEK 300 million and 15% margin, and we are not world leaders. We are not developing the way we're developing here. There may be a better parent, or we have to change our growth strategy into building it for real. There's a whole host of portfolio issues that we're going to deal with in both an acquisitive organic growth, but potentially also some divestment cases down the road. This picture will look slightly different 10 years from now. Are you all thinking about what it is? No, you're not. You know, here is the High Speed Separator.
This is also a high-speed rate separator, the disks. This is tank cleaning equipment. I think it is Scanjet, right? Scanjet that we acquired. Here we are a couple of valves that is in the fluid handling business. Membrane solution. The plates you start to recognize, the distribution patterns and the decanter with the hard metal cutting on the top to handle the solid friction. Well, it's a whole host of things. Never mind. I thought you wanted to know. All right. You know, one of the things and the reason we gathered here today was to give you our picture of the energy transition. Everybody, including the investment community, was super hyped two years ago on hydrogen and whatnot.
We all get into doom and gloom, and we think it's not happening. I think we have a balanced view on the energy transition. The reality of it is that our pipeline on clean energy projects and the project pipeline in a number of verticals is on an all-time high from a low level. It's not on the level to get to certain climate targets, but it is still substantiating the next step in the journey. We see it happening pretty much across the board at a slower pace than we would like, and a slower pace that the policymakers would like. You know, we also wanted to be clear that we are not betting the firm on any given vertical.
We are exposing ourselves to take the opportunity where us we think is the prudent thing to do, the right thing to do for the long term. But there are limits as to how far we commit into capital and resources before we know that there's curve and penetration curve is going to happen for real. We also know that whatever happens in this area, increased energy consumption and energy efficiency will form a basis of what needs to happen. There we have no hesitations. It's all in. You've partly seen it here. You will see it in other areas as well. So we are taking a modest positive view on the development or let's say this expand part of our business over the next five years. That's how to summarize. You make your own cut on that.
If I would just as a last picture and a brief summary on an eight-year journey, there's a way to summarize that to a pretty lazy agenda. I think we made four fundamental decisions. You know, one every second year, if you like. I think these are the four that matters, when I summarize it. One is the fact that we've done massive investments into our core technology to ensure technology and market leadership. You've seen it here. You could see it in five other places around the world. We dramatically changed how we looked at CapEx and competitive barriers. 2016, we had a policy of CapEx equal to depreciation, which left us with SEK 600 million per year. That's less than we invest in warehouses this year. We are, as you know, five times that level.
You know, it was a change we decided to go for. We took the bet. It works. We have placed our bets on future technologies. You know, we'll see how well we place those bets, but we felt we had to make those decisions. They were not simple decisions. They were, you know, of a world of opportunities. We needed to nail down and define, you know, how do we play the cards in this. You've seen it in Marine, you've seen it in Food & Water, and you've seen it in Energy Division. You see it beyond the explore bucket, if you like. Those bets were important for us to make early, and we monitor them. We changed our M&A strategy. I think before M&A was mainly a way to secure growth.
Today and the acquisitions you've seen, including the Desmet, including StormGeo, including a whole host of things, it's not uniquely to secure growth. We have enough growth anyway, we are not overpaying to get additional growth on top of what we have. What we are paying for is capabilities that we think are useful. You will see a strategically aligned to the degree we succeed to convince sellers that we are the right buyer and they will sell at the right price. You will see, I think strategically a rather disciplined M&A flow in the future. Lastly, the service side, and I discussed that dinner yesterday.
I don't know if something has happened structurally other than the long-term change that many customers don't have the same plant engineering resources and you know, anymore, so they outsource more of how to run the plant today than before. I think we have strategically changed our position in service, in mindset, in leadership, in training, in recruiting, in digital tools, in multi-brand access to competitive products that are installed on the same site, and the list goes on. I think we have we believe that typically service should be just somewhat higher growth rate than capital sales because installed base is growing. The level that we are at now, we are a little bit sort of, we are a bit surprised that it's running as fast as it can.
The question is, how will it run in the future? We don't see a temporary post-COVID or, you know, that type of thing. That's not what we see. We see a structural growth on the service. Will it hold on this level? Possibly not. We still believe that it should probably grow faster than capital sales over the next couple of cycles on an average. The service side and the service strategy has been fundamental to us. With that, thank you very much. We have five minutes for a possible question. You're only allowed you can't do like in the earnings call and ask three question, but you can do one. You were first. Okay.
First of all, you have very good capital markets, and you presented very well how you grow and what the strategy is. You've done your homework on the plant efficiency. There are amazing opportunities in data center and nuclear and marine and food. At the same time, you still run a target of 15% margin, and I wonder, you know, you probably speak to the Board of Directors and you sit together and say. They say, "Well, you now have 17%," and you say, "No, we should only guide for 15%." What's the dynamic there? I don't fully understand it. You clearly have the setup to go higher. What is holding you back? Are you just super conservative, and you have no drive in pushing the market with higher targets?
The first thing I would say is we could never have done what we've done over the last year without a really strong alignment with the board. We have a board that is as long-term as us, if not more. So we are not typically, you know, pushed into, you know, another 0.5%. You know, as I, you know, it's clear to the board, it's clear to me, it's clear to you, we could manage, you know, we could decide to manage on the profitability as our primary objective, and we're not. We are running the company as if it was our own money. I never make a decision, I think the board is sort of in the same mindset.
We don't make decision that are right for somebody else, but not for us if it was our company. you know, the What it takes, this is what's important for this team, when you are given the opportunity but also the responsibility to manage the business for the long term, you cannot fall into the trap of being lazy in the short term because you don't have to change. That's why a lot of the, you know, restructuring actions and margin actions on areas that are not performing, I think we are razor sharp in attacking it in order for us to take, you know, the real strategic costs for investments, R&D projects, factory, OpEx things on how we operate that we believe will pay off in the future.
Looking at our, you know, there are very few people who talk about the return on equity. The return on equity on our organic business of over 50% is telling you something around how we generate returns on the capital. That to us, you know, to go to 17% just as a target means that, you know, you're gonna ask me why we're at 16.5%. I'm gonna tell you because we think hydrogen is important, and we're not making any money. I'm not gonna be forced into that position. It doesn't mean that we, you know. We always said 15%, we don't consider it the target that we should achieve.
We consider it the floor to give us the strategic flexibility to run the business long term in a good way. That's how the dialogue go. I cannot enough express how, because our chairman is here, but again, you know, it, we have been given a lot of trust. It wouldn't work for us if, you know, our employees wasn't the way they are and with the board isn't the way they are. We're quite pleased. Okay. Number two.
Could you give us a little bit more color on why you think service growth will outpace capital sales?
Why it outpaced?
Yeah. I think it was one of your final comments.
No, I can. Well, there is one possible explanation, is that we were not good enough in the past. We were not penetrating our install base enough in the past. We were not putting enough priority on the leadership of the service team in the past. We were not, you know, serving multiple products outside our own product range in the past. We did not have an aging fleet in the past with any, you know, increase in store base on the ships. We did not have 50 companies selling PureBallast and scrubber systems without any marine experience and without any global service system. Suddenly ship owners need a little bit of help from Samir and the team to figure.
There are a lot of things, coming together here, and we're not the only company in the world, in the industry who's growing the service reasonably high at the moment. This is without acquisition. I think there is something structurally that we have done that is bringing us back to where we should be of actually owning our install base and serving it well.
Thank you.
We take that, then one more, and then we Yeah.
Can you reach the SEK 100 billion by 2030 without M&A? Why have you not aligned the 5% growth target with this ambition?
Well, make your spreadsheet and put in 5% and see where you end up from 72 this year. I don't think it's an alignment question of having to change the annual. You know, I look at it like the reason we feel, you know, we need to be clear why we are spending SEK billions of money, right? Because we have invested a lot, and we are fit for purpose on the level we are. We should be done, right? We are not. We think we need to give some confidence in terms of where we're heading in order to Because that's where we base our investment decisions at the end of the day.
The way we feel about it is that the exploration bucket has some real opportunities in it, we don't know. You know, you can put it at 10, you can put it at two, and that it is. You know, it's a span. If you look at our firing power in the balance sheet, you get at least easily over, you know, from today and including a couple of years forward, you easily get EUR 2, 3 billion or something like that. Well, you know, you can run on sales multiples what we need in order to buy high-quality companies. You know, you get to a number that could be very small or up to SEK 10 billion maybe in terms of revenue.
You have the ongoing growth rates on the existing businesses, and you have the potential issue of what's gonna happen in the renewables and in the energy transition in the expand side. You know, will it drive harder and faster than, you know, a normal annual growth rate? You play with those things, everything is not gonna work. Everything. Well, if it will, we will go higher. That's clear. We felt that this was in all traditional Alfa Laval modesty, that was a reasonable thing to be transparent about.