Repsol, S.A. (REP) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us today at the technology lab center of Repsol. I am Ramón Ãlvarez-Pedrosa, Head of Investor Relations. I would like to take this opportunity to formally welcome you all to Repsol's Low Carbon Day. During this event, we will provide an update of the different business platforms that supports our decarbonization pathway, a core aspect of our 2025 strategic plan. As a starting point, allow me to give you some instructions about the format of this event. Conscious of the pandemic situation, we have decided to carry out this event in virtual format through a live webcast to give everyone the opportunity to participate. Through the virtual platform, you will be able to follow the event and download all documentation available. Also, you will be able to follow the presentation through the on-demand recording option that will be available in our website 24 hours after the celebration of the event. In case of technical issues with the platform during the broadcast, we will contact you via e-mail to send you a new link. Let me now introduce you the different elements of this event. The session will be opened by our CEO, Josu Jon Imaz, who will make an overview of Repsol low carbon strategy, progress and new ambitions. After that, we will be covering the following topics. Berta Cabello, Juan Carlos RamÃrez, Rafael Jiménez and Tomás Malango will give us an insight on the progress toward the decarbonization of our industrial sites, specifically addressing our refining, chemical and renewable hydrogen business, respectively. José Barreiro and Siridia Berenguer will explain the transformation of the customer-centric business, its contribution to the global decarbonization of Repsol and the new ways of energy offers and services. After the intervention, João Costeira will take us through Repsol fast growth on low carbon generation business, the targets delivered and the company's global vision and new goals. The last block will be conducted by Mikel Erquiaga, who will lead us through Repsol exploration capabilities in the energy transition context with a focus on our carbon capture and storage plans. Finally, Luis Cabra, Executive Managing Director and Deputy CEO in charge of energy transition, sustainability and technology, will explain the progress of Repsol through our decarbonization path, its metrics and new targets and ambitions. Before giving the word to our CEO, I encourage you to review the disclaimer included at the beginning of our presentation. Thank you. Now I'm pleased to hand the word to Josu Jon.

Thank you, Ramón, and good afternoon to everyone joining us remotely. Today, we have the purpose of providing a bit more color on the initiatives and projects that we are boosting in Repsol to boost the transition of energy into a less carbon-intensive business model. I feel, and let me underline this point, particularly happy to host this event here at Repsol Technology Lab in Mostoles, Madrid, which is a real example for innovative private research and development centers in Spain. This is a space of open innovation where more than 250 experts from 17 nationalities work to deliver sustainable solutions that promote efficient and competitive lower-carbon businesses. The speakers after me will show our low carbon platforms in action so I'll use my turn to recapitulate our strategy to energy transition and our progress since the release of our strategic plan. I'll close these opening remarks with a review of our updated ambition and targets. And after the business presentation, Luis Cabra will explain the impact of our enhanced ambitions in our pathway to net zero. At the end of the presentation, we will be available, of course, for you for a Q&A with the sell side. Let's start with our strategic vision. Back in November, we presented a new strategic plan that outlined a road map for the transformation of Repsol to the end of this decade. We released it after a difficult and a very challenging 2020 in which, despite all difficulties, we delivered a resilient financial performance while moving ahead in our long-term objectives. If I had to summarize, our 2021 to 2025 strategic plan in one single phrase, I'd say that it's a story of the transformation of Repsol based on decarbonization, a journey that looks to 2030 as its destination and defines important milestones for the first half of the decade. I want to underline that this plan, this journey, although encouraged by regulation, is not a response to regulatory pressure but is built on our own competitive advantages. The first element of this transformation is the decarbonization of Repsol's portfolio in a profitable way. As a multi-energy provider, we want to fulfill the demands of all our stakeholders, being profitable in oil and gas and also in the low carbon. To achieve that, our strategy promotes the long-term sustainability of our operations, increasing profitability and delivering free cash flow growth in all our business platform. The second element is the new operating model implemented for the transformation to succeed, which leverages on our business integration and provides better value transparency. We have organized Repsol businesses in 4 divisions, supported by a leaner corporate center. And we have strengthened the role of technology, digitalization and people as the key enablers of our transition. There is a great task ahead of us, and there will be, for sure, uncertainties that we'll have to tackle at the appropriate time. But we are convinced that Repsol has an advantaged position to succeed in the energy transition. Thanks to a combination of the right ambition, the right company size and the right business platform, we are going to be able to do it. Our transformation story is distinctive and differentiated to peers. The energy transition constitutes a business opportunity for us, driven by a credible and feasible ambition and enabled at the foremost by the cash generation of our legacy businesses. Let me emphasize, let me underline that we have the right size of ambition but also our scale and company footprint are a perfect fit into the transition. Repsol is large enough to become a leading player in the businesses involved, but at the same time, we are small enough to decarbonize in a feasible way by targeting only the most profitable and achievable opportunities. And we have set our ambition on the right play because our capabilities and portfolio are uniquely set to build new carbon businesses. Repsol's top-tier industrial sites, along with our differential brand leadership and access to premium renewable resources in Iberia, provide Repsol outstanding competitive advantages. The recently announced a Fit for 55 package under the European Green Deal confirms and reinforces Repsol's hybrid solution and strategy as the best alternative to make Europe the first climate-neutral continent by 2050, boosting the competitiveness of our industry and ensuring a just transition. The new European regulatory proposal asked for more ambitious objectives for the incorporation of advanced biofuels and requests specific objectives for renewable hydrogen and renewable fuels of nonbiological origin. Our vision is that a combination of low-carbon products and electrification is the best and most cost-effective solution for the decarbonization of the economy as electrification alone will struggle in cost and efficiency for certain uses. Repsol is present in the entire decarbonization value chain as a multi-energy provider. On the one hand, we have a best-in-class industrial platform to build new decarbonized businesses around hydrogen or sustainable fuels. On the other hand, our competitive and material customer-centric business provides significant opportunities to transform the energy offering to our clients. So how have we delivered on this ambitious journey? Sustainability is part of Repsol DNA, and our transformation has indeed started a few years ago. We were, remember, the first oil and gas company to commit to net zero emissions by 2050, aligned with the objectives of the Paris Agreement. At the time of that announcement, Repsol was already a company that had the energy transition at the very heart of the company, let me say, but also at the center of its strategy, supported by legacy businesses capable of delivering resilient free cash in any scenario. So when we released our new plan, we started from a strong position. And in our minds, it was also clear that Repsol would not pursue the transition for places it was not present or areas where we are not good at. As of today, Repsol has put together a relevant low-carbon portfolio that has continued moving forward in 2021. In industrial transformation, work has started in the new C43 advanced biofuels unit in Cartagena, projected to be operational in 2023. We have also assembled the team that will deliver our renewable hydrogen ambition and took the FID for our first electrolyzer. In chemical circularity, we have joined forces to build in Tarragona the first waste-to-chemicals plant in the Iberian Peninsula. In renewables, we put our 2 first solar farms on stream, structured the construction of new projects in Spain and Chile and signed our first PPAs. Moreover, the acquisition of a stake in Hecate has marked our entry in the U.S., one of the most attractive and fastest growing renewables market in the world. On customer-centric, we have grown our retail power and gas customer base by 12% in the first half of the year, and we have launched new energy services in distributed generation. And on carbon sinks, we started the engineering phase of our first upstream CCS project in Sakakemang in Indonesia. The progress achieved so far is reflected on our updated CapEx guidance for the year. As we build on our commitments to net zero, we have increased our CapEx in renewables by EUR 300 million. This will bring the investment in low-carbon platforms in 2021 above 30% of the total group CapEx, aligned with our objective -- or our strategic objective, better said. Let me now move on the first of our 4 decarbonization platforms. We are transforming our legacy industrial sites into decarbonized hubs that are capable of delivering the low-carbon products that our society will demand in the near future. In renewable hydrogen, our updated road map has allowed us to grow the objective defined in our plan by 40% to 2025. In addition, our ambition to 2030 has been increased by 60% as the support of the Fit for 55 package enhances our competitive advantages being the first producer and consumer of hydrogen in Spain. In refining, we have already taken steps to transform our model, setting the foundations for the refinery of the future. We ambition to reach 1.3 million tons per year of production of low-carbon fuels by 2025 and 2 million tons by 2030. For Repsol, advanced HVO is the best short-term route to comply with the legislation on growing biofuels. In chemicals, we ambition to recycle the equivalent to 10% of our polyolefins production by 2025 and the equivalent of 20% by 2030. Today, we will elaborate on our strategy for this business and our levers to deliver profitable growth in circularity. Repsol has the ambition to be a leader in circular economy in Iberia, Spain and Portugal with a multi-technology and multi-feedstock approach, becoming an advantaged producer of sustainable biofuels and recycled plastics. Our legacy industrial sites have begun the transformation, let me use the term, into energy parks that fit into a more sustainable future, maximizing value through partnerships. And thanks to these new processes, by 2030, around 3 million tons per year of waste will be avoided and 7 million tons of CO2 per year will be mitigated. In renewable generation, we are now in the face of assembling and putting in operation the pipeline we have built in the 3 years since we entered in this business. The acquisition of Hecate provides us optionality and access to a pipeline of more than 40 gigawatts of projects at an advanced stage of development, increasing our visibility towards the delivery of the objectives defined in our strategic plan. The recent final investment decision for the development of the Jicarilla solar farm is a good example of the potential of this pipeline. With that in mind, we have accelerated our renewable generation capacity ambition by 15% in 2025 to 6 gigawatts of pure renewable and by 60% in 2030 to 20 gigawatts. We are building a technology balanced portfolio of solar, wind and hydro capacity that is geographically diversified with a selective investing process to capture the full deal of every project phase. We only choose to develop projects that create value, bringing a best-in-class equity return above 10%, thanks to our top operational capacities, optimal financing and asset rotation. Moving on to the retail side. The customer-centric business is building on its strength to deliver a 40% EBITDA increase to 2025 compared to our 2019 baseline, driven by the contribution of new businesses and the increase of mobility and non-oil margins. Our differentiated multi-energy customer-centric view puts Repsol in a unique position to serve the full energy needs of our customers while simplifying their journey to net zero, either for mobility or at home. Repsol is rapidly advancing into our 8 million digital clients target, growing by 50% our Waylet users in 2021 for a total of 3 million. We are growing along the energy value chain, capturing all the opportunities that the energy transition offer us, including the entry to new markets like e-mobility and advanced energy services. We are capitalizing on our brand, our 24 million customer base and an advantaged position in the Iberian market to grow in low-carbon businesses through the launch of initiatives like Vivit, Energy Origin or our transversal loyalty program. Moreover, we will reinforce our offering in e-mobility in Iberia with installation of more than 1,000 public points of recharge by 2022 with quick chargers every 50 kilometers. In Spain, our ultrafast charging terminals in premium locations will be, of course, one of the main targets of this e-mobility business. In addition, Repsol shows a strong position in new energy services with more than 180 active solar communities in 2021, a very innovative business and social initiative. Our fourth decarbonization platform comes through our progress in carbon sinks initiatives, which support our pathway to net zero. The pioneering CCS project in Sakakemang will be one of the largest projects of its kind worldwide, abating an estimated 2 million tonnes of CO2 per annum since its start-up in 2027 to 2040. This geological carbon storage project will benefit from Repsol's green exploration capabilities, taking advantage of the expertise we have in our E&P division to develop new low-carbon opportunities. Lastly, we will be exploring the use of natural climate solutions, of which our Green Engine program is an excellent example. Developed through the Repsol Foundation, it will reforest 70,000 hectares in 5 years, planting more than 60 million trees with a focus on job creation in rural areas, too. Let me now review our updated targets and how they impact the capital allocation and emissions reduction targets defined in our strategic plan. To recap, very briefly, the new opportunities generated this year, the support of favorable climate policies and a better environment have encouraged us to increase our ambition for several of our low-carbon platforms. In renewable hydrogen, we have increased our generation targets both to 2025 and 2030. This will lead us to a green hydrogen capacity of 1.9 gigawatts equivalent by 2030 and 0.55 gigawatts by 2025. We are revisiting our ambition in renewable power generation. Back in July, we increased our objective to 2025 from 5.2 to 6 gigawatts of pure renewables. And today, we are increasing our 2030 target to 20 gigawatts of capacity by the beginning of the next decade. In the customer-centric business, we have strengthened our customer orientation and set up ambitious targets for e-mobility, as I said before. We will grow our recharge network in Iberia and deploy either a fast or ultrafast charger every 50 kilometers in Spain. Boosting our ambition and accelerating our transformation will increase our 2021 to 2025 CapEx by EUR 1 billion for a total investment of EUR 19.3 billion in the 5 years of the plan. The bulk of this increase corresponds to the building of our hydrogen business and the faster pace in renewables. The share of low carbon CapEx until 2025 increases from 30% to 35%, and our transformation will increase the weight of low carbon in our capital employed that is now expected to reach a figure around 45% by 2030, above the 40% we announced in the original plan last November. So we are going to maximize the value of our current portfolio, allocating CapEx to legacy profitable projects. And I want to underline this point, capital discipline will remain with us as it will continue to be the most important restriction to succeed in the energy transition. Let me finalize by reviewing our reinforced decarbonization path towards 2050. A favorable regulatory environment and technological breakthrough allow us to increase our intermediate decarbonization targets less than 12 months since they were updated at the strategic plan. Our new ambition accelerates the path to net zero in scopes 1, 2 and 3. The carbon intensity indicator reduction targets increase from 12% in 2025 to 15% that year, from 25% to 28% in 2030 and from 50% to 55% in 2040. Around 36% of our institutional shareholder base is managed under ESG criteria. Our reviewed net zero pledge, supported by our updated ambitions, align us with demands of our ESG stakeholders. Repsol will continue to lead the energy transition in line with the Paris Agreement to limit -- and that is a very ambitious but important target for human kind, to limit global temperature increase to well below 2 degrees Celsius. To conclude, the transformation story embedded in our strategic plan is moving ahead with a reinforced commitment to accelerate the decarbonization of our portfolio. Less than 1 year after releasing our strategy, we have seen new profitable opportunities coming to light for the energy transition and not only in renewables. The new regulatory packages support Repsol's view that the energy transition cannot be just electrification. Europe needs to endorse different low-carbon initiatives that allow us companies to preserve our leadership and avoid outsourcing elsewhere the development of new energy solutions. Advanced biofuels, synthetic fuels and renewable hydrogen are all competitive technological alternatives to overcome the challenges where electrification is currently not viable. We have, and let me say, I have the conviction that all technological solutions for decarbonization are valid and complementary, and incentivizing them all together will accelerate the transition. That is very important to cope with the problem of climate change. The challenge ahead will be committing to those that contribute in the most cost-effective way to achieve our goals. With that, I'll now give the floor to Berta and Juan Carlos who will take us through the transformation of our refining into a low-carbon business, interesting challenge. Thank you very much.

Good afternoon, everyone. Let me introduce, firstly, my colleague, Berta Cabello, Head of Refining Transformation; and myself, Juan Carlos RamÃrez, Head of Planning, Logistics and Refining Sales. We will -- today, we will update you on the refining business plan to reduce the carbon footprint of our products. We will start with a brief review of the framework in which low-carbon fuels business is developed today and then detail the short-term and long-term initiatives that we have in our portfolio. All the actions and project that we have in our portfolio are aimed at reducing the carbon footprint of both the operation of our refineries and the products we manufacture. For this, we have been evolving for a long time our refineries toward a more efficient operation from the energy point of view and the use of new raw materials different to the conventional crude oil to produce a broad portfolio of low-carbon fuels. The new business model is based on several levers, the first one being the legislation. The needs of the society related to decarbonization is set out in European and national regulation. We have to be aware of this legislation to meet our obligation and to deploy the appropriate processes in our assets to obtain all the value and create value off them. We have in our hands commercial technology that have a long life and fully integrated in our assets. But for -- to reach this target in the coming years, we need, for sure, technology development. We have to introduce in our refineries new processes, and the appropriate location will be a key factor to take all the value from them. At the same time, we are going to use new raw materials and to produce a broad portfolio of new products to reduce the carbon footprint, in general, of our products. To supply all the system with these new raw materials, we have to create a new network of relationships with these new raw material suppliers. The needs of the society for this low-carbon fuels introduction into the automotive fuels is set out in European and Spanish legislation. We show in this slide the main directives and laws that are in force or proposed for the coming years. So last summer, the European Commission released a new proposal to amend the renewable energy directive #2. This new proposal is called Fit for 55 million that increase the target of renewable energy in the year 2030. This increase of the target will boost the plan of Repsol to introduce low-carbon fuels in our conventional fuels. So a new target of 13% reduction in CO2 emissions in the transport is included in this new proposal, which is more or less double of the value that we have today in the RED #2. Also with this proposal, a new target for the use of renewable hydrogen is included as well the use of renewable fuels from nonbiological origin. At the same time and as novel, we have new targets for the aviation and maritime sectors. The good news is that we have many options to meet the targets in the year 2030. We have commercial technologies fully implemented in our refineries like lipid hydrogenation route, esterification, etherification, fermentation and so on. But for sure, we will need to develop other processes like the production of fuels using CO2 as raw materials or gasification and pyrolysis. So these new processes have been implemented in the appropriate refinery to obtain all the value from them. At the same time that we are developing these processes and using new raw materials, we will open and we will increase our portfolio of products. We have been producing biofuels, low-carbon fuels since the year 1998 using bioethanol to produce ETBE, which stands for ethyl tertiary butyl ether, which is a component of gasoline. And some years after, Repsol was one of the first companies in Europe to process vegetable oils to produce HVO, which stands for hydrogenated vegetable oils, which is also called sustainable or renewable diesel. We have increased the use of new raw materials, in general, waste and residues, like used cooking oil and other residues to manufacture HVO and biojet and advanced biojet where we use residues. And with the development of these new processes, we will open and increase our portfolio of products, producing pure advanced biojet and advanced HVO, e-fuels using CO2 as raw material and for example, advanced bioethanol using municipal and industrial wastes. Just speaking on the short term, I would like to emphasize, firstly, that Repsol is leader in Iberia in producing HVO and ETBE, and we are the first marketer of low-carbon fuels in the Spanish market. We have been as well the first producer in Spain of biojet with 3 batches produced in 3 of our refineries, in Puertollano, Tarragona and Bilbao, this last one being an advanced biojet because we use a residue as raw material. And we are testing more than 40 wastes in combination with different technologies to increase our portfolio of advanced biofuels and circular plastics. And finally, the latest news is that we are, once again, the first company in Europe producing renewable hydrogen using biomethane from [ biogas ] of landfill in our steam reforming in Cartagena refinery just last weekend, some days ago. Well, speaking on the short-term initiatives, we think that the best way to grow in low-carbon fuels, creating value and meeting the target that we have in the coming years is the lipid hydrogenation route to produce HVO and biojet, also called sustainable aviation fuel. So the demand for these 2 products is higher than the demand for gasoline, and there is no limitation in the blending of these products with mineral fuels. So the expected demand for these products in the coming year is increasing considerably in Europe, far exceeding the expected capacity with this lipid hydrogenation route. So this is the reason why we are researching new processes, using new raw materials with high availability to manufacture these 2 products, HVO and SAF. In our refineries, we have already more than 20 initiatives to increase our capacity production of HVO and SAF, which we will increase our capacity in 300,000 tonnes a year in the year 2025 and almost the same figure again to the year 2030. So the products, we have a broad, a wide range of margins, depending on the products and depending on the market, but for sure, very healthy compared with mineral fuels. Estimates from different consultants even predict higher margin for years to come. Our main project in this lipid hydrogenation route is our C43 project in our Cartagena refinery, which consists of a new plant with a capacity of treatment of 300,000 tons a year of raw materials, which are waste and residues to produce 250 kilotons a year of HVO and SAF. The plant will be starting up in the first quarter of 2023, and the investment estimated is EUR 188 million. So placing these products on the market will prevent the emission of almost 1 million tons of CO2 a year. The supply of this project and the rest of the projects in this hydrogenation route will be a key factor to obtain all the value from them. For this reason, numerous actions are being developed to guarantee the supply of raw materials with appropriate quantity, quality and price. And at the same time, with these short-term initiatives, we are researching, we are developing new technologies that open up new opportunities for other raw materials. Berta will tell us about them right now. Thank you. Berta, please?

Thank you, Juan Carlos, and good afternoon to everyone watching us. It's a pleasure for me to be here to show you some details about our pathway to 2030. Starting talking about raw materials. As Juan Carlos was saying, there is a promising potential in other new raw materials like municipal solid waste, industrial solid waste, residues from the agriculture and livestock sector and also forestry waste. The good news is that there is enough organic waste of any kind in Europe for obtaining the forecasted advanced biofuel demand in 2050. What is true is that we need to develop technologies to process these raw materials, including also CO2 and other waste that give us additional potential. And also, we need to develop the value chain, and that's what we are doing. Talking about the whole value chain, our current assets, our refineries are in the middle, in the heart. As you know, we are progressively introducing more renewable raw materials into the refineries to obtain low-carbon fuels and low-carbon products for other industries. And what we are doing, what we are developing and we plan to invest is in upstream units that will allow us to process especially solid waste and CO2 into materials that will be processed in the refineries, synthetic oils and syngas, for example. The locations of these units will depend on the waste location, on the distribution and logistics cost and also on the technology needs in terms of infrastructure and utilities. So we have the competitive advantage of having the current assets that will reduce our CapEx needs and also our operating costs and will ensure the product's quality. That is not so easy. And we have added value by investing in the upstream value chain and giving us flexibility to process a wide variety of raw materials. So we have -- in order to achieve our 2030 objective of 2 million tons per year of low-carbon fuels, we have a wide portfolio of projects, 60 -- more than 60 initiatives right now. You see that dynamic portfolio. So other initiatives are coming in. And it's accounting right now 3.5 -- more than 3.5 million tons per year of low-carbon fuels capacity production. The concept is multi-technology raw material flexibility in order to choose the more competitive projects to go ahead and to execute. So that way, we can adapt to regulation that is still changing and we can adapt to raw materials availability and also to technology development. And we talked about the competitive advantage of having current assets. But for me, the really, really good competitive advantage is our team, organization. We have extensive know-how and extensive knowledge. We have a dedicated and motivated team that I'm sure, thanks to them, we will achieve this objective. So let me go through some of the technologies that we are analyzing. First of all, we have the production of synthetic oils and pyrolisis oils from gasification and pyrolisis of municipal solid waste, agriculture and forestry residues. With this, we can produce products for transport and also for other industries, and we are scaling up these technologies to be ready at the end of this decade. The next one is similar. It has synergies with the last one. That's the beauty of this. But instead of using waste, we are going to use CO2 and renewable hydrogen, and we will produce similar products to the last one. In those -- in these 2 routes, we can integrate with the refineries, and we can then minimize CapEx and operating costs. Here, and Tomás will explain in his presentation about renewable hydrogen, OpEx is a challenge, but we think we can be competitive also. And also, in liquid part, we will produce advanced ethanol from fermentation of organic municipal solid waste and agriculture residues. This technology, we are scaling up with the technology provider. And it's a demo plant that is very little -- low risk, low CapEx, flexible, and we think it's a nice technology to go ahead. Ethanol is used as a blending component in gasoline, also to produce ETBE. And in the future, it could be used to produce renewable hydrogen and also to produce biojet. Moving now to the renewable gases technologies. We have biomethane. That is a technology -- commercial technology. We will produce from organic municipal solid waste and also agriculture and livestock residues that has a high potential, especially in Spain. We'll produce this product that could be used directly in transport, especially road and marine, but also to produce hydrogen in our refineries and also for other sectors. This route has very nice integration with the last one, with advanced ethanol one. And last but not least, our renewable hydrogen route. As you know, we will produce this product from different technologies, from electrolysis and also from biofeedstocks in our own steam reforming units and also photoelectrocatalysis. And Tomás will explain more details in his presentation about this route. So let me give you key success factors for deploying this strategy. We think that one of them is developing strategic partnerships. So we, right now, have more than 45 active partnerships in the whole value chain, from raw material sourcing and pretreatment, important actors in Spain with management and pretreatment companies, biomass sourcing and also agriculture and livestock producers; and also, in the technology and operation part because, as we were telling before, these technologies are, some of them, under development. So we are partnering with technology licensors, technology centers and also biomass and waste plant operators that know how to deal with these materials. And finally, final use of our products, airlines, shippers, fleet operators, OEMs because we need to know if we are going to produce the products that they need in their fleets. And also, we are going to speed up the process, speed up the technology development and minimize risk by investing in demo plants like the decarbonization hub that we are planning in Petronor refinery in Bilbao. And also, as Juan Carlos was saying, we are also doing industrial test to test these new technologies into industrial conditions. And also, we are applying for public funding. We, in fact, are really, really happy because, last summer, we got 2 grants for 2 decarbonization projects from the European Commission, one of them for a CCU project to obtain eco-aggregates from CO2 and waste in Petronor refinery and in order to produce hydrogen from a new proprietary technology that is the photoelectrocatalysis. So as a summary, let me say that, well, Repsol is the leading HVO and bio-ETBE producer in Iberia and first biofuels marketer in Spain. We are not new in this business. We have been incorporating and producing biofuels in our products since 1998. We have our homework done to 2025 with our flagship project, the Cartagena advanced biofuels plant that will be ready in 2023. And in our pathway to 2030, we have a multi-technology approach, flexible in raw materials and with strategic partners as key success factor. But also, I would like to finish saying that we are not forgetting what we know about the traditional business. We are applying the strength and know-how that we have because, right now, we have one of the most competitive refining systems in Europe. And what we are going to do is to build the most competitive low-carbon business in Europe, too. Thank you.

Hello, good afternoon. My name is Rafael Jiménez. I'm in charge of the polyolefin business of Repsol in the Chemicals business. I'm going to give you some ideas of our business, Chemicals; some other ideas about our strategy for the next 5 years; more precisely, some examples of circularity projects we are going to develop in the next years. First, I would like to give you some key figures of our business. We have 3 main highly integrated sites and flexible sites: 2 of them in Spain, Puertollano and Tarragona and a third one in Portugal in . We have an average EBITDA in the last 6 years of EUR 550 million with a very special result this year of EUR 900 million due to the high margins of our products. We produce and sell 2.8 million of tons of products, selling to more than 1,000 customers, 85 countries. We have 2,000 people in our company. And I would say that we have certainly highly complex value chain in production and logistics due to the number of grades and plants that help optimize all this chemical value chain. For some products, like EVA, polyols, propylene oxide, we are in the top 15 in the world. Besides that, we have a JV called Dynasol with the Mexican group Kuo of 50%. We have assets in America, Europe and Asia, and we produce synthetic rubber, and this business contributes with around $100 million per year to EBITDA. We have a diversified portfolio of products. Chemical products materials in general are products that contribute to the energy transition due to its key role as materials for the low-carbon technologies that we are developing today. Starting from the crackers, which are the most important plant we have. We have 3 crackers, one in each site, in Tarragona, Puertollano and Sines. We feed naphtha and LPGs to the crackers, and we obtain some basic products, ethylene, propylene, butadiene, benzene. We later integrate downwards these products into other final products. And for instance, the ethylene is integrated with different kinds of polyethylene, low-density, high-density, metallocene. The propylene is integrated with polypropylene, polyols and glycols. And from the butadiene and benzene, we obtain styrene and synthetic rubber. All these products are finally used in multiple applications like packaging, pipes, auto, pharma, foams, appliance and so on. Well, let me, in a couple of slides, give you an idea of our strategy for the next 5 years. In Chemicals, we want to grow. We think we have opportunity to grow. And for this growth, we are going to use 3 levers: integrate, expand and transform. Integrate both horizontal and vertical, taking advantage of our very good integration today with the refining system and petrochemical system in our sites. Expand international growth with added value with optionality approach, looking for some niches, some opportunities to grow for a special segment that can help the Chemical business to its decarbonization. And transform to be a more sustainable and competitive company in the future based on 4 pillars: decarbonization and efficiency, differentiation in products, digitalization and circularity, all of them based on the excellence in the operations and with highest standards of safety and environment. Our intention is to grow in this strategic plan. We are aiming to double our EBITDA in a stable medium-low margin scenario, passing from the current EUR 350 million to EUR 750 million in 5 years. To do that, we have to invest. We have to invest almost EUR 1.5 billion in many projects. I would like to highlight in this moment the [ Alba ] project. [ Alba ] project has been recently approved by the Board of Repsol, and it consists of building 2 new polymer plants in our Sines site, one polyethylene and another polypropylene plant, with world-class technologies and to produce very differentiated grades and products for auto industry, food and pharma applications. With these new plants in Sines, we are going to integrate 100% of the site. Sines site is going to be one of the most competitive site -- petrochemical site in Europe. We are going to invest there almost EUR 650 million. And we expect to start up the new plant in mid-'25. This project has been considered as a national interest for the Portuguese government, and they are going to grant with some incentives our project. Also to point out that under the transform pillar, there are dozens of initiatives that are going to lead our business to be more competitive and more resilient in the future, boosting our business value. Regarding circularity, it's clear that perhaps 5, 7 years ago, circularity was not in the agenda of our business, but things have changed. Society is asking for changes in the consuming patterns, and also legislators are promoting circularity through many initiatives. Therefore, we see circularity as a way to improve our license to operate in Europe, in our geographical impact area. But also, it's true that this new market about circularity and about recycled waste is going to give us new business opportunities. We will see later how the volumes are going to increase in a significant way for the next year. Taking these 2 ideas in mind, we have developed a clear and I would say a challenging target of recycling the equivalent to the 20% of our polyolefins production in 2030. To do that, we are -- as we are particularly starting from scratch, we recycled last year 6 kilotons. We have to reach a significant figure of 360 kilotons in 10 years. And we are going to use all the technologies that today, some of them are already running and others are going to be developed in the next years. It's important to say that doing that, recycling 360 kilotons in 10 years, we are going to reduce the global footprint -- carbon footprint of our business because we are avoiding that these volumes go to incineration or to the landfill. Here, you can see how the different demand markets of polyolefins are going to grow in Europe over the next decade. Virgin polyolefins are going to grow at 1% but they are going to grow. But what is going to grow significantly are growing all related with recycling, either mechanical, either chemical. Today already sees a mechanical recycle demand, but it's going to grow by 2 million in 10 years. But regarding chemical recycling, polyolefins waste is going to grow until 3.5 million ton. This is a great opportunity for us to go into these businesses. Also important to note that the chemical recycling is not substituting virgin demand because it's going to be fed into our crackers and then substitute to other basic products. We have designed our road map to reach these targets. We started 6 years ago processing pyrolysis oil in our refineries. We were one of the first European players to do that, and we were able to do it due to our competitive advantage of being integrated in our sites with refining. Pyrolysis oil is the product that you obtain when you process plastic waste into a pyrolysis plant. Last year, we certified our complexes with the ISCC PLUS certification in Puertollano, Tarragona and Sines that permit us to apply mass balance approach to all our processes. That means that if we recycle 1 ton of plastic waste in a pyrolysis plant and we feed this pyrolysis oil in our system, we can say that the new polyolefin done with this product comes from those -- that plastic waste and is circular. That's the sense of the mass balance approach. And as you can see, we will see later more in detail we have projects for mechanical recycling, polyurethane recycling, pyrolysis and gasification. We have to invest a certain volume of money to do that, almost EUR 1.4 billion. But as some of these projects are going to be carried out with other companies, the equity of Repsol, in this case, would be around EUR 660 million. Here, you can see our 4 main projects of circularity in the Chemical business. There is a kind of a hierarchy in plastic waste in such a way that the highest, the best quality plastic waste can be used for mechanical recycling. And as long -- as this quality decrease, you have to use other technologies to recycle the plastic waste. In this way, we start with the Reciclex mechanical; Reciclex circular; Ecoplanta classification; and a special case, the RECPUR project using a special chemical process, acidolysis, for recycling foams and waste from mattresses. Also important to note that last year, we launched a new brand to the market, Repsol Reciclex. And under this brand, we are going to market all the products -- all the circular products and all the products containing Reciclex. That's important commercial step also, the Reciclex trademark. Just some key ideas of each 1 of the 4 projects. The first one, Repsol Reciclex mechanical recycling. This is a physical mixture of plastic waste -- recovered high-quality plastic waste from the market and to mix them with virgin grades. We have a clear target to recycle 100 kilotons per year in 10 years with an average content of recyclates around 50%. Today, we have already developed more than 20 different grades with different recyclate content, between 10% to 70%. They can be used in many applications except in food applications. The resulting grades are very similar to the virgin ones but not necessarily the same. They are 100% recyclable, and the new grades has a very low carbon footprint, up to 40% of saving of carbon emissions. For this project, we collaborate with a recycling company called Acteco. It's a Spanish company located in Alicante. They have the knowledge of the sources of the recyclates. They have the competencies. And together, we are developing all this value chain. We will have to invest in new compounding facilities in Tarragona, Puertollano, Sines and Monzón. And we are collaborating with some of our customers to give them the solution they are asking for. The second project, Repsol Reciclex circular. In this case, we are talking about pyrolysis, a way -- a type of chemical recycling. We want to recycle, in this case, 225 kilotons of plastic waste into this technology. The product we obtain with this chemical recycling are exactly the same properties as the virgin ones. That's very important, and they can be used for food applications. They are also 100% recyclable with a very low carbon footprint. In this case, we have designed 3 phases for this project. The first phase is to reach offtake agreements with companies that today in Iberia are already running these pyrolysis plants. We are taking this pyrolysis oil and feeding into our systems. As this pyrolysis oil has a low quality and some impurities, we need to invest to develop a new process. We are collaborating in this case with Axens, a technology company, to develop a process to purify this pyrolysis oil in order to prepare it to be fed directly into our crackers. In the third phase, we are already negotiating and dealing with companies, our customers, brand owners especially in food packaging applications to assure the volumes they need for their markets. The third project is what we have called RECPUR. It's polyurethane recycling. In this case, we collaborate with a German technology company, RAMPF. And the idea is next year to build the first plant in Puertollano for recycling these foams coming from post-industrial use from our customers but also from post-consumer phase. We are going to recycle these foams. We are going to obtain polyols in the same way as the Reciclex mechanical. We're going to mix recycled polyols with virgin polyol, and we are going to supply Reciclex polyols to our customers. We aim to have 15% of our polyol sales in 10 years with this recycled polyol. We are going to have the first plant in Puertollano next year, and we plan to build another one in Tarragona and in the future, a third one in Germany. And the fourth project, perhaps the most important in terms of CapEx and volume, is the Ecoplanta. Ecoplanta is a JV between Repsol; a technology company, Canadian one, Enerkem; and a waste management company, Agbar, belonging to Suez group. The idea is to build the first Ecoplanta in Tarragona within our facilities with a lot of synergies involved. In this case, the gasification process is going to avoid more than 200 kilotons of CO2 emissions per year. The raw material for this Ecoplanta is municipal mixed waste, and what we obtain after the process is methanol in this case. As this mixed municipal waste has fraction of organic waste but also plastic waste, applying mass balance approach, we can obtain some methanol for circular polyolefins market and the other, coming from the organic, for advanced biofuels. This plant we -- uses also hydrogen, and then we have -- there are some upsides about that. The idea is to build another Ecoplanta in our sites of Puertollano and Sines in the future. Well, we have reached the end of this presentation. I would like to give you some takeaways. The first is that circularity today is already a must for the chemical industry. The European chemical products contribute to reduce the emissions. The demand, either virgin, either recycled products, is going to increase much more than recycled market. And therefore, there will be new opportunities in circularity. We are very well positioned for recycling due to the integration we have in our sites. In fact, we have been one of the first chemical producers feeding pyrolysis oil into our system and marketing circular polyolefins. We have a clear target of recycling -- 20% of our polyolefins production by 2030 recycled. And to do that, we have a map to invest a certain quantity of money and also to continue collaborating with technology companies and recycling companies to look for new projects. Thank you very much.

Good afternoon, everyone. It's my pleasure to stay here and share some deep dives regarding our hydrogen strategy. And particularly, I'm delighted to do this in the Repsol Technology Lab, which is a center where some of my colleagues working here daily have been a significant part of the creation of this value proposition I'm going to share with you today. This topic today, we will go through the hydrogen market and how we see the hydrogen value chain and how we can create a market opportunity. After that, we will move to the position of Repsol and advantages that we have to develop this market. Taking this in mind, we will go to the ambition. And finally, we will have an overview of the road map of the business and the projects we're going to launch. Let's start with the market vision. It has been said today and it's very clear that the normal electrification is not enough for decarbon -- to meet the climate change and decarbonization goals that we want to meet. We need renewable molecules. And at this point, hydrogen will be relevant in achieving all these goals. How we're going to do this is very based on the European market opportunities. We have an expectation of 7x growth of the market in Europe. That means we are talking about a market of EUR 60 billion by 2040. And we have a significant support from the European Union, from the Spanish government and from the public and private foundation. And finally, we have a regulation which is the Fit for 55 package that already my colleague, Juan Carlos, has explained very well. I'm not going to go again on that, on the targets. But it's important to point out that that's prevailing an opportunity to create a new market. Therefore, even though we need some more regulation to clarify the final opportunities and to define all the opportunities there, this is clear that hydrogen is going to play a role and it is needed and required to achieve the goals. Looking into opportunities in the industry of the hydrogen. It seems clear that the consumption in industries will be the driver of the creation of this market. There is an opportunity, especially for the refining business, regarding the targets that we have shown before of renewable fuels of nonbiological origin and also other industries that have the target of 50% of hydrogen. And finally, we have the transport sector where we're going to include a lot of this hydrogen through the refineries. There are some other opportunities regarding the grid blending and maybe also the energy storage opportunities. But they are more far away at the time, but we will take into account of them. But it's important to point out that the industry is going to be the pillar of the growth of the hydrogen market in Europe. And talking about -- more specifically about the refining business. We think that the refining business is capable to achieve the competitiveness earlier than the rest of the business, as we show in the previous figure. Regardless that there are still funding -- a cost gap between the incumbent, we know that the regulation support and that the opportunities created here can bring competitiveness in the short term. We need some development to be done in technology point of view, and we still need some help coming from the regulators to define the market. Taking this into account, these are the figures that we have and the time line. It's clear that if we're talking about low-carbon hydrogen, the competitiveness should be around 2030. If we're talking about renewable hydrogen, it will go to 2035 if we don't do anything. And it's clear that and had been shown before that with the support from the regulation, all this can be achieved in the next -- in the upcoming years. With this, let's talk about what is the advantage of Repsol to play at this game and what's our right to win. We think that, first of all, we have the capacity to enable the market. We are the main producers and consumers of hydrogen in the Iberian Peninsula, and that's our main advantage in order to create this market. As has been explained before, it's very clear we have top-tier assets and top-tier people executing our operations so we have the capability to produce, transform and commercialize the hydrogen during the -- in the entire Iberian market. Also, we need some renewables to produce the green hydrogen, and this is also a capability that we have at home. And finally, we are located in the Iberian Peninsula, which is the best resources for renewables in the European market. Therefore, it's very clear that we have the capability to create a differentiated value proposition which nobody else can do here in the Iberian Peninsula in order to satisfy the demand of renewable energy and also create a value proposition based on our ability to partner with the right people and to create an equity story on that. Why we are doing this, for sure, it's clear that climate change is there and we need to meet the goals and it's mandatory for us and for all the stakeholders and the society to meet it, but also because there is a clear business opportunity there. We're talking about a market of EUR 8.5 billion in Europe at this moment. As I told you, we project this -- for 2040, we're talking about EUR 60 billion. We're talking about EUR 0.8 billion market in Spain, which is around EUR 6 billion market size by 2040. Therefore, there is opportunity for business. As you can see there, the refining is the main consumer of hydrogen in Spain, more than in the rest of Europe. We are around 80%. And Repsol, 60% of the consumption in Spain. That means that we have a right to win in this business because it will be based, first of all, in our activities and at the end, because we have the market share enough to create this value. And as -- summarizing everything. As I was explaining before, we are present in all the value chain, from the renewable production, energy storage, hydrogen storage, hydrogen production, hydrogen transformation and commercialization of hydrogen and hydrogen carries. Hydrogen will be consumed, clearly, directly in some applications, especially in industry but also through different products that will be carrying the hydrogen, like the conventional fuels, e-fuels, advanced biofuels and everything else coming up in the upcoming years. So we have the opportunity to take advantage of this integration and create this value for the society. Keeping that in mind, we're going to share with you our ambition because now it's time to put figures on this and try to say how we're going to do it. Our CEO explained it clearly. We have increased our ambition. We're going to deploy 552 megawatts of hydrogen by 2025. That will be done essentially through 2 different technologies. One is electrolyzers. We're going to launch 3 different mega projects of electrolyzers in 3 of our sites, in Cartagena, in Tarragona and Petronor in Bilbao. But on the other hand, we're going to also launch projects of biomethane in our refineries without the conventional process. And this is not only promising, but this is our reality. Yesterday, we launched our press release regarding the first [ tranche ] of green hydrogen from biomethane done in Spain. And 2 weeks ago, we made the FID for the first electrolyzer for industrial scale that's going to be launched in the northern of Spain, and we are working very hard on this to bring the hydrogen to the stream in the next year. Out of that, also, we're going to -- we also want to explain -- we also want to explore the possibility to produce hydrogen and make business in third-party assets. We are not going to limit the business to our assets. For sure, we're going to leverage our capabilities based on that, but it's not going to be the only focus. We are also going to look for alternatives with other industries like steel or like fertilizers or any other industry that need hydrogen. We're going to explore that and to complete our goals. Moving forward, because this is a long-term initiative, looking to 2030, we are increasing significantly also the ambition. We were talking about 1.2 gigawatts 9 months ago. Now we're going to talk about 1.9 gigawatts. That's now our new target, very based again on our self-consumption, more or less 1 gigawatt there. Third-party assets, we think that there are opportunities on that side, as I mentioned before, other industries, maybe some grid blending, some other activities there regarding heat and power sector. And finally, a promising activity regarding the e-fuels. As Berta has explained, we are creating a demo plant, and I will give some more details on that in the upcoming slides. And we hope that we can create some business on this in the future, and we are creating so much space on our goals in order to meet this. It's challenging. We still have some developments -- some technology developments to be done. But we think that it's important to be ambitious and to get some statement around this. Keeping that in mind, let's go -- let's talk about the business because, at the end of the day, as I mentioned before, it's important to combine the transition and the climate change initiatives and targets with the creation of our business. We are expecting to take advantage of this situation of the company and spend some CapEx on the hydrogen, more or less EUR 1 billion in this strategic plan. And also, in the next step by 2026 and 2030, more or less EUR 1.6 billion is expected to be part of our investment. Our expectation is that by 2026, we start getting some positive EBITDA regarding this business. So it will be the lineup of the creation of a real business. Let's say this first step is investment, very focused on investment, very focused on creating of the opportunity. And then the second period of this decade should be the launch up and the pop up of the business. Coming down and breaking down a little bit into the projects just to clarify a little bit we'll go and -- how we're going to achieve this 552 megawatts. As I mentioned to you before, we have 232 megawatts coming from electrolyzers, the first one recently approved by our Board for the Bilbao refinery. We also got -- we have 200 megawatts coming from biogas. We really trust on that. We think that using our asset capabilities and our strengths will be the better way to get a good result in the shorter term. Climate change is not only about target but it's also about time, and I think -- we think that biomethane provides us the possibility to get this result in a shorter time. Finally, we have some piloting in third-party assets that we are working on this and partnerships with different potential users. And probably in the upcoming sessions, we'll have the opportunity to deploy this in a more clear way. And we have some small figures there but they are very important for the future regarding the technology development. We're going to do some demonstrations in photoelectrocatalysis and about [indiscernible], and I'm going to detail this before. But it's important for us to show that in the -- our road map is sustainable because we have actions for the industry in the short term but also we are looking for the technology development in the long term. E-fuels production, I think you have heard about the synthetic fuels during the entire session from the opening remarks of our CEO, also from the conversation from Berta and Juan Carlos. We believe that there is an opportunity there. We are investing a significant amount of money. I think including demo plants is a way to handle the technology risk that we have in these activities. And it has been very, very challenging for us moving down to these kind of activities. Now we are creating an investment in Bilbao for EUR 74 million, together with some of our partners, Enagás and Saudi Aramco and the local government in order to demonstrate the possibility to produce and put on the market e-fuels. We think that combination of hydrogen, advanced biofuels and e-fuels can provide the solution of the renewable molecules that I told you at the beginning of the presentation that we need to solve the decarbonization of industries and transport sector. Secondly, we also think that technology development regarding hydrogen production is not end up. Electrolyzers are there. Are we going to use them? We need to scale up the industry, and this also is very challenging. It's not only a matter of technology development but also creation of a new industry. If we're talking about the production of hydrogen, we still have low efficiencies, and we need to improve in order to decrease the amount of energy required to produce this hydrogen. We are talking about, more or less, if we're talking about electrolyzers, 3 gigawatts installed of renewable energy by 1 gigawatt of hydrogen, which is a huge amount of energy if we want to move to a relevant market of hydrogen. Therefore, we are developing a proprietary technology, as Berta has mentioned, based on photoelectrocatalysis, which is called SUNRGYZE where we take the solar energy and we convert it directly into hydrogen without going through electricity. That means we increase significantly the efficiency of the process, and therefore, we decrease the cost of the hydrogen production. The main challenge of the hydrogen production -- renewable hydrogen production is the cost of the energy, which is 75% of the cost -- or the total cost of production. Therefore, eliminating this is significantly -- makes a difference. This has been recognized by the European Union. Indeed, this project has been founded by the innovation funds, and now we're going to scale up our facility here in the technology lab. We have a pilot plant running since the beginning of the year. And now we're going to create a demo plant in our Puertollano site and by 2024, hopefully, in order to scale up before the end of this decade to an industrial facility if everything goes as is planned. And finally, we cannot do this alone. This is a major challenge. This is a sector challenge. This is, I would say, a society challenge. Decarbonization of the entire activities is a huge challenge. And we are creating SHYNE, which is the Spanish hydrogen network. It's a project in which we are bringing onboard all our partners to create the value chain and make possible the deployment of this hydrogen market in the Iberian Peninsula. As I mentioned, we are very focused on 3 hydrogen valleys, where we're going to create this mega project, world scale, more than 100 megawatts electrolyzers. But not only we are going to focus on the production of hydrogen and the technology development, as I mentioned to you before, but also, we are going to be focused on how we can deliver to the society added value on this especially. We're talking about digitalization, how we can operate this differently, more -- in a more safe way and how we can create knowledge to transfer to the society. Hydrogen economy is going to bring new needs. These new needs need new people with new capabilities, and this capability will rise up in the execution of these projects. We need to make sure that we can share this knowledge with our people, first of all, and also with entire society because we will need a lot of people in different sectors to create this hydrogen valley. Just not to forget because we are also very involved on that, the traction of the small and middle-sized enterprises that are collaborating a lot [ of those tasks ]. They are underlying -- they're [indiscernible] of this energy transition requirements, and some of them have industrial capabilities coming from other sectors that are very useful for us in this creation of the hydrogen new value chain. To summarize, climate change is a main challenge, and we need renewable molecules to achieve the goals in addition to renewable electrification. That means that these platforms of molecules, some of them had been explained by my colleagues before, but hydrogen will play a key role to enable all of them. Even circularity, also the biofuels, the hydrogen itself and the derivates like e-fuels or some other products will be key to achieve this goal. Spain has the opportunity due to this renewable viability to play a role -- a significant role in European hydrogen market, and Repsol has the aim to be the backbone of the Spanish market and leader of the Iberian Peninsula with our production, consumption and delivery of the hydrogen to the society. If we have the right regulation, we are ready to push this market and to create the value for the society. Thank you very much.

So good afternoon, everybody. For the following minutes, Siridia and myself will be talking about the customer-centric business strategy, which I will summarize -- start summarizing by saying that big challenges but also big opportunities. Let me start first with a couple of ideas. First one, we are an energy leader in Iberia. We have more than 24 million customers. We have over 4,000 service stations, 95% of them being in Iberia, with more than 1,000 service stations managed by us, which give us a direct insight about customers' feeling and customers' needs. We are also a very large supplier of all the products, whether it's the fuels, LPG, lubes or whatever. And we have also leading market shares in Spain, where we are #1 in fuels, #1 in LPG, #1 in lubes and #5 in power and gas; and also in Portugal, where we have a relevant position. This is the first idea. Second idea, this is not only about what we are but also about what we can do. And in this sense, we have a very successful track record of transformation. Our transforming-while-performing program allowed us to increase our EBITDA, multiplying it by 1.4 from 2015 to 2019. But as you know, we are facing a very relevant moment for all the commercial business, led by the necessary energy transition. We have many and continuous regulatory changes. We have very demanding decarbonization targets. We have an increase in renewable sources and electrification. We have fast technology evolution and also the eruption of alternative and nonexclusive technologies for mobility. But there is also a less commented topic, which is also very relevant that I would like to mention right now, which is the big changes that are occurring in consumption trends. Our customers are, of course, much more aware about environmental and about safety matters, yes. But at the same time, consumers or customers are much more informed. They know what they want. They are more digitalized. They want it now, and they want it in a personalized way. And at the same time, they are requiring a global vision of all their needs, and the COVID situation has reinforced all these trends. So for this reason, we believe really that the future is going to be multi-energy, low-carbon and customer-oriented. And this is a time of changes, and times of changes are times for opportunities. And in Repsol, we think that we are in the best position to seize them. Why? For 2 main reasons. First, we have key and very solid foundations. I mentioned it before. We are a long-standing Iberian energy leader with 24 million customers. Second, we are a mobility leader in continuous transformation, especially in mobility but also in other businesses. And we have also a high-growth power customer business. In fact, since our entry in 2019 November in this business, we have the fastest growth ever in the Spanish market. But besides these key foundations, we have also a very clear and very solid strategy based on 3 basic pillars. One is multi-energy; second, world-class digital or digitalization; and third, customer centricity. If we talk about multi-energy, we say we want to supply our customers all the energies they require for all the needs, whether it is at home or on mobility, whenever, however they need it. It means supplying traditional premium fuels; alternative fuels like LPG or natural gas; of course, EV charging; but also biofuels or e-fuels; but also new mobility services like WiBLE, the JV car sharing company that we have with Kia. But at the same time, we want to supply LPG or fuels or power and gas at home but also new energy services like distributed generation as we will see afterwards. But being multi-energy oriented is also about enhancing cross-selling and bundled offers with our different products and services. And in this sense, we have an opportunity not only to capture value, but at the same time, to gaining fidelity, to gaining loyalty of our customers. So on this multi-energy approach, we really believe we can build a competitive advantage which is difficult to replicate. Second, digitalization. Digitalization, of course, is about having world-class digital tools that make easy any contact that our customers may have with us in order to gain their fidelity, in order to gain their loyalty, in order to gain their engagement. But at the same time, when we talk about digitalization, we are talking about data, data that are coming from customers, how to obtain this data and how to extract value out of these data. And for example, we have an experience with more than 100 million personalized offers that we make to our customers in the retail business every year. And when we talk about data, we are talking about scale. We need scale to obtain data, 24 million customers. But at the same time, we need scale for the investments that are needed to obtain value out of the data. And also on this, we think we may build a competitive advantage, which is very difficult to replicate it by others. And third, we have customer centricity. We want to accompany our customers with this multi-energy approach in their own energy transition. Because this will be a transition. So we need to satisfy our customers with any needs, with any solution, with any requirements they may need because we want to be their end-to-end energy supplier. And at the same time, being customer-centric means that any contact that customer may have with Repsol must be not only homogeneous, but at the same time top, at the same time, superior. It doesn't matter if it is a service station. It doesn't matter if it's consuming power at home. It doesn't matter if it's on the online world or the offline world. This customer experience must be absolutely superior, absolutely top and absolutely homogeneous. And if we do that, our customers will continue to be with us. But at the same time, they will recommend us and bring in new customers to our business, bring in new customers to Repsol. So finally, there is the opportunity. We have very key and solid foundations. We have very clear and determined strategy to make a unique value proposition that cannot be replicated by others. What is our challenge? Our challenge is how to do so. Our challenge is how to orchestrate this customer-centric, multi-energy approach across our customer base in order to engage our customers, in order to make more cross-selling, more multi-energy cross-selling. And the answer is by having very world-class digital tools, and at the same time, having more and more digital customers. There are about 35 million energy customers in Iberia. 70% of these customers, 24 million, are Repsol customers. 10 million of them are registered customers, but only 2 million of them were at the end of 2020 digital customers. Our challenge is to make -- an objective is to arrive in 2025 to have 8 million digital customers, 8 million fully engaged customers, 8 million customers with across multi-energy personalized offer. So that is the path that we want to do together with our customers. This is an advanced path already. And now, Siridia will tell us how we are proceeding in this path to obtain these 8 million customers.

Thank you, José, and good afternoon. As José just mentioned, the goal in our strategic plan is clear, and achieving 8 million multi-energy digital customers may seem ambitious. It is ambitious. It is challenging. But at the same time, it's achievable. And you'll agree with me once you see the solid path we are building in this direction. This event is a perfect opportunity for us to show you some of the products and services we have already available for our customers or about to come in the coming months with this multi-energy digital and customer-centric view José was just mentioning, both regarding energy, regarding mobility, at home, outside. Let's go for it. Our products and services portfolio has enabled us to be in the past to be right now and to have the confidence of being the energy I referenced in Spain for years to come, being able to deliver the energy our customers need whenever they require it. If we go with our first pillar, the multi-energy pillar. Repsol is fully prepared to deliver a differentiation and a multi-energy holistic offering to the clients. And this is because our product, our services, as I said before, makes the perfect environment to satisfy all our client needs. We will see, just as an example, our electric mobility business launched 10 years ago. And with Repsol right now being able to deliver a comprehensive and complete solution to EV drivers with private points of recharge at home, at the office with the most -- or one of the most significant charging networks in Spain with public chargers nationwide, with value-added services related to this new mobility and for sure, with electricity, 100% renewable electricity for your car or for your house. Our goal is to build a widespread, convenient and smart public infrastructure nationwide with fast and ultrafast chargers every 50 kilometers in main transport corridors nationwide. And that will mean that by 2022, we'll have more than 1,000 public chargers available for EV drivers looking for premium locations, convenience, quality, reliability and a perfect experience also when driving their electric cars. In that sense, it's very important to have in mind that Repsol positioning is quite unique in Spain. Because while utilities lag from this premium public network, infrastructure players cannot deliver this holistic solution at home, leaving Repsol we sell exclusive and unique positioning in order to satisfy our client needs. And third that it's important to note that e-mobility offers and opens for Repsol significant market opportunities, not only because it's a natural hedge to the traditional mobility, but because it unlocks very attractive margins. Just for you to note, and compared to our service station business nowadays, e-mobility allows us to deliver twice the margin we can get from a current loyal service station customer. And it's important to note, I said loyal customer because the difference could be even higher when talking about an average customer. In that sense, the margin comes from the possibility of bundling different perks, that said, satisfying different needs for a single customer. Our e-mobility service is already available to our Waylet application. From Waylet, we can not only manage our private chargers at home or at work, but also can access to a wide public network in the country, being able to locate, book, recharge and pay and more features to come in the coming months and years, quite an ambitious road map ahead for Waylet. A fully satisfactory experience -- customer experience had to be guaranteed also for our e-mobility customers and Waylet is a great and a big tool for that. But we talked later -- we talked before the change of habits and the different approach we have with energy nowadays. And it's a fact more and more, we want to take a step forward and be part -- an active part of the energy we need and we consume. And for that, Repsol offers its clients with different distributed energy models, trying to give comfort to those clients looking for renewable, local and self-produced energy. And in that line, let me show you Solify, our solar self-consumption product, Solmatch enabled the possibility for the first time in Spain of solar communities; and Ekiluz, building solar cooperatives wherever the side of the country. And just let me take a deep look into Solmatch, just in case you don't know this model. Solmatch brings the possibility of bringing together renewable and lower -- and local energy producers and consumers. So no problem if you don't have the possibility of having your own solar panels at home because you can access to local and 100% renewable electricity coming from the -- your children's rooftop 2 blocks from your house, from your nearest service station or from the chargers in your neighborhood. That's a reality. That's Solmatch. Solmatch was launched March last year, and it has been already awarded by different institutions in line with green generation, innovation and customer experience. By the end of this year, we'll have more than 300 solar installations in our service stations, more than 180 active solar communities, and we'll have 50 solar cooperatives under negotiation. Multi-energy, our first pillar. Let's move to the second one, digital because this new multi-energy world is fully digital. And we must provide a unique and integrated digital experience to our customers in order to facilitate the relationship with energy because our customers are becoming more and more digital themselves as well. And I'd like to go through our 3 main digital products: Waylet, Vivit and our new repsol.es site. As you may all know, Waylet is our loyalty and payment platform with more than 3 million users expected by the end of this year, 1.6 (sic) [ 1.6 million ] transactions per month and ranking top 1 as transport services applications in Spain. Repsol is really proud of Waylet because it's the clear example of bonding and strengthening the link with our clients, improving our hit rate, reducing the churn; increasing the customers' consumption volumes and boosting the result of our campaigns. It's a fact. And the numbers are the evidence of Waylet users' confidence as a useful, convenient and with an enormous potential platform. Because Waylet is not a regular payment application. It gives you the possibility to pay at the pump. No need to go into the store to pay for your fuels. It allows you to offset the CO2 emissions coming from your fuel consumptions when you acquire them, gives you the possibility to pay off-street park in different cities in Spain or to preorder at convenience stores, and then ask for a pickup or delivery service. It also gives you the possibility to pay and the access to customize and personalize discounts in different strategic partners such as El Corte Inglés. What about home? How do we help our customers to manage their energy at home? To answer this question, some months ago, we launched our Vivit platform -- Vivit application with the purpose not only to help our customers to achieve a much more efficient energy consumption with disaggregated information or recommendations according to our consumption patterns. But Vivit allows you to decide and to choose the source of energy coming to your house. And it's so easy. Just with different 100% renewable energy sources available and with real-time information about them, you can decide the one coming to your house. As simple as that. And with that real-time information, even adapting your consumption patterns accordingly. And in this fascinating digital road, let me proudly talk about our new repsol.es site that will come into reality in the coming months. And that has this multi-energy customer centricity orientation. It's full time how to be much more efficient, but much more sustainable. When you want to buy an electric car, this will be repsol.es. We talked about multi-energy. We talked about digital experience, and last, but by far the most important pillar, is our client, our customer. Our customer-centric approach. And in this sense, all our strategy revolves around the client and the satisfaction of his needs. And I'd like to give 2 small examples about things we are already doing in this line. First, multi-energy customized solutions for our clients. That means we are building solutions that combine different products and services, both digital and physical, from our portfolio in order to help -- to give a complete and integral solution to our clients, no matter their needs and no matter their necessities. We are even building customized bundled solutions for different sectors. Sectoral solutions, such as the one for the food service business. We are the companying the sector in its energy transition, adapting to its needs. And for instance, in this case, even creating a sustainability certification, tailor-made for restaurants, together with AENOR, the Spanish Association for Standardization and Certification. And I didn't want to finish without mentioning and without fully presenting what Repsol's new transversal loyalty program will be in the coming months, and that will become the first energy community in Spain. The bond with our clients will be complete and will have a real 360 degrees view and with -- and total integration for all our products and services in Repsol. Digital, multi-energy and customer-centric, that's not our strategy for the future. That's our understanding for today. Because as we feel it, Repsol's products and services create a perfect jigsaw that will make us able to achieve this ambitious goal, engaging our clients by 2025 and beyond. And this global solution is the one that makes a big company -- the real value of a big company with a global offering in order basically to satisfy any need for our clients in the most agile and easiest way. And now if you let me, I'll give the floor to José to go for the final remarks. Thank you very much.

So just to conclude, we have really a unique opportunity to create value in the energy transition because we are a leading energy customer business with sustainable competitive position, as we have seen, because we have an advantage and committed play on energy transition, because we have a multi-energy, a customer-centric approach that is very difficult to replicate and also because we have -- as we have seen, a strong track record of customer management, especially of digital capabilities. For this reason, we really believe we will be able to obtain our objective by 2025, which is to multiply the EBITDA by 1.4x when compared to 2019 baseline. Thank you very much.

Hello, good afternoon. Now we're going to talk a little bit about low-carbon generation and especially what we've been doing in renewable energy. My idea today was to briefly go through what we have already done, what's our strategy. And to give you one example where we believe that this all comes together and that is a real proof that we mean what we say and that we deliver on our promises. So starting on what we've been up to. Basically, what we have stated before, launching organic growth, building and operation -- and putting into operation the pipeline that we have assembled, creating international platforms and developing internal capabilities. How does this translate into numbers and into reality? By year-end, we'll have 1.7 gigawatts operating, only 0.7 of which come from an acquisition, 4.7 will be either under construction or will have a high visibility to be delivered before 2025. And besides that, we have an additional 20 gigawatts of pipeline, which could bring -- brought together with this 6.3 and be delivered before 2025. For this, we are now a team of 250 people under management, which has more than -- each one of us, more than 20 years of experience in the energy business and most of us more than 15 years in the renewable business. Among ourselves, we have developed, built and operated more than 5 gigawatts -- 15 gigawatts, sorry. Five would be easy. And we would also like to take the opportunity to give you a little bit more of color on the American deal that we have just done. We think this is important because on one side, it is relatively recent, and on the other side, it is fundamental to derisk the ambition that we have stated. First of all, the U.S. Why the U.S.? The U.S. is no matter how you look at it, and no matter who looks at it, one of the best, if not the best renewable energy market in the world by size, by its regulatory support, by its strong legal regulatory framework. The second reason why we believe this is an important acquisition is that besides giving access to this kind of market, which, by the way, will grow more than the combined European Union altogether, it's a disciplined acquisition. You buy -- we buy 40% of a company, we have the possibility to acquire 100% of that company in 3 years. But in the meantime, you benefit from a very experienced management team, you have access to one of the biggest independently-owned solar portfolios in the United States, which has, besides a 16.8 gigawatt pipeline of solar projects, 4.3 additional gigawatts of storage capacity projects. We know how important storage is supposed to be. It's starting to be. In the U.S. it already is. So not only it will get us exposure to that technology in that market, it will always also help -- will help us to learn to bring that knowledge to other markets. And finally, because it allows us to have a fixed and interesting price access to the portfolio that we then can build upon. What we're doing as we speak is to build an OpCo that will take those projects that we find the more interesting within the Hecate pipeline to construction and operation, and finally, possibly to a partial divestment. So what we have been doing is fully consistent with our strategy, and -- which we call a fast-growth sustainable business model. Of course, it's sustainable because it's renewables. More than that, what is important is to see that we can replicate whatever we're doing, right? And there are 4 main aspects to this strategy that will come together. And I hope to give clarity on that in this presentation. First of all, we need to integrate the key capabilities. It is impossible under such a competitive market to do this without a set of people and team and the capabilities which are not among the best. So you need to have them and you need to have them now. And we assembled that team, okay? The second thing is that we need to look at markets in a different way than we did in the past. It's not so much where there's the best support scheme, because right now, there are several roads to market, most of which should not rely on subsidies or other kinds of market-distorting mechanisms, but on the market fundamentals, on its need for energy, on the affordability of renewable energy, on the solidity of the regulation underpinning it. And that's the way to look into that. That's the way to see what markets we should be in and with what kind of pipeline. It's no longer about just producing. It's not about the first to pass the ball. It's about having the energy mix and then in the energy projects that will serve the customers of tomorrow. We cannot expect the system to take forever whatever energy we produce. We should be able to deliver the energy that the customers and the system needs. Another relevant aspect is we choose where to be. You need to be in places where risk is manageable and where your assets have a value that can be crystallized and can be recognized. And for that, we have chosen to start in OECD countries and to have sizable positions in all of them. It's not about going around the world, putting small flags. It's about creating efficiently run operational basis. For that, you need size. You need the size of the country and you need the size of your presence in the country. And finally, we need to capture the yield compression between the risk of the project when it starts and once the project is operational. And the reason for that is that this allows us to have the CapEx dedicated in the best way possible. That means that we have to have more CapEx once we are creating value. But once the value is created, we should take that CapEx elsewhere while keeping the operation but starting the cycle all over again to maximize value and the value of that CapEx and equity that goes with it. And this is so because this is a very, very front-loaded value-generation business. In the first few years of the project, the project has either become a huge success or a failure. It's -- although the rest of the life of the project is important, and we will be among the best doing that, most of the value is created upfront. So once you have the project permitted, you have the project built, you have the project finance in place and you have a PPA in place, then the creation of value is absolutely asymptotic. So that's probably the moment where we should partially cash out and start the cycle all over again. To do that, you have to have a strong pipeline, but as I mentioned, a pipeline that is in markets where there is a clear visibility on how you can keep on doing this. Otherwise, it's not sustainable. And that's what we've been doing. I mentioned a little bit the size of our pipeline and given you a little bit of more color of detail. By year-end, 1.7 gigawatts will be operating, with 0.6 more which are underway because they are under construction and fully secured; 4.1 gigawatts which have right now, high visibility, and this means that they have interconnection -- most of the environmental permits have already been obtained or are on the way, and they have PPAs being negotiated or have already been shortlisted. And besides that, we, of course, then have advanced development projects, which could compensate and add to this 6.3. But besides that and beyond 2025, we already have an early-stage pipeline that will eventually come to more maturity and that will give us visibility beyond the 2025 scenario. And that is the reason why, and as our CEO already presented today, we are upgrading our targets to 6 gigawatts in 2025 and 20 gigawatts by 2030. And we'll be doing that in different jurisdictions. In the first moment, of course, Spain will still be very important. But by 2030, the U.S. should already be more important than Spain. Chile will keep its important share. And the rest of the world, namely Italy, will start to show on the map because we believe that this is -- there are also other countries, namely Italy, that have the same characteristics as the ones that we are already in. And that will allow us to replicate our business model. To be able to do this and make money, because it's not simply about having gigawatts. Theoretically, everybody can do it. If your bank account is big enough, you just go and shop. The thing is, are you creating any money by doing that? And we like to believe and we believe and we'll demonstrate to you that we are creating value. But by that, we must do everything right. You must be in the business early enough to capture the value of -- the viability of the project. When you establish that the project is viable and worth investing in, that's clearly the early phases of development. Then you have to, and all through the life of the project, manage its risks and its energy, not just by signing PPAs, but also by maximizing the value of the merchant exposure, by representing ourselves in the market, by minimizing deviations, all of that, we must do. And for all of that, we have a team. At the engineering procurement and construction, you have to optimize every aspect of it. You should not go when we are not going for turnkeys. We're not leaving that money on the table. We were able to do that. We were able to procure our own turbines, our own solar panels. We were able to procure [ RVOP, RVOS ], and we are able to do that with the team that has been doing that for years in the renewable space. And by doing that, you also make life easier for colleagues in engineering and construction because they will be getting the best and most recent solutions for the solar and wind farms that we need to build. And we also have a different kind of ability of inter-relationship, a different way of dealing with the key stakeholders of this industry, like turbine manufacturers, solar panel manufacturers, inverter manufacturers, transformer manufacturers. So it will be easier for them to get the best material, the best prices, the best deals. And this is about -- it is because this is becoming shorter and shorter. The investment cycles, we want them -- make it to be shorter. So for them to be shorter, we also need to be very present at this part of the value chain. That's something that in the house we have in the sense that Repsol has been managing huge CapEx projects for quite a long time. So what we just need to do is to bring renewable-specific knowledge to this part of our business. This is also true for us in other parts of structuring and finance. Repsol is one of the main companies in Spain, a big company in Europe, a big company, no matter how you look at it. The relationship that we have with the banks are -- our sophistication when it comes to dealing with finance, our ability to have access to the most innovative products is very different from most of the companies in the renewable space right now, and that's something that we're leveraging on. This is also true when I was talking about Energy Management. Our solidity gives us a tremendous edge when negotiating PPAs. It's not the same thing to build -- to sign a PPA for 12, 15 years with a company that you know will be around and that has a huge balance sheet than signing it with -- we don't know which company, we don't know where they came from, we don't know exactly where it will be tomorrow, probably sold to somebody that we don't know yet who is going to be. Finally, on the operations side. We are an industrial company. We'll keep on being an industrial company. And for that, we have to manage the full life cycle of the project. We have to manage the full life cycle of the assets. We are investing in a state-of-the-art control center and state-of-the-art analytics to make sure that we get the best out of our projects. It's not just about availability. Availability is fine, but there's performance. There's power curves. There's a lot of things. There's overpowering. There's a lot of things that you can do to manage the full life cycle of the assets and to squeeze out the superior in profitability. And that's what we are already doing. That's something that we will keep on working for the decades to come. It's not about 1 year or 5 years or it's not even up to 2030. It goes well beyond it because these assets last more than 30 years. So if you bring this all together, that's why we say that we can deliver a double-digit IRR. If we were speaking to the left-hand side or we were just buying it when it comes to operation, no way we're going to get there. But if you do this all, yes, you do. And this graphic may not be very easy at first, but what it tends to show it's the -- why there's such a strong rationale for an asset rotation and to divest partially? If you see the risk and the value are not linear. They don't -- their progression is not linear at all. It's a asymptotic, as you would expect, so risk will be varied over the 25 more years of the project, whereas value will increase very little. So it is rather obvious that you need to invest and you need to manage, especially during the moment where the risk has already gone down slightly, but the cost has not gone up substantially -- or the value has not gone up substantially. And that's exactly what we've been doing, be it in Spain when we purchased the Delta portfolios, Kappa projects, the Sigma projects, all of that. That's what we've done in the U.S. by investing in a company that does pure greenfield in solar. And that's what we've done when we associated ourselves with Grupo Ibereólica in Chile. So it's investing at the moment where the projects are still creating a lot of value and considering a divestment once most of the value has been created. Now an example of all of this. To see that -- well, this sounds nice. Probably, everybody is telling pretty much the same story, but we are delivering on that story, okay? Delta 1, it's our first project that we built, okay? 335 megawatts into clusters. A wind farm, which is now fully operational, which has been delivering an above-average availability from day 1 and cash flows, which are secured through a PPA with good conditions, but market conditions signed with Repsol itself. And you might say, who? Who is Repsol, okay. That's probably a one-trick pony. It's not a one-trick pony. We'll have other ones like this. And by the way, only a few minutes ago, Tomás Malango was telling us that they will need more renewable energy. So this is just the confirmation of a business model that our CEO has presented a few years back where he said that we wanted to be integrated in energy in Iberia, and that this is an advantage for Repsol. This comes to show it. And we've done this and moving forward by applying the highest standards of all safety and environment in the business, not just the ones that are common to the industry, but the ones that we brought from the oil and gas industry that is known for its, let's say, top-class health and safety policies and applied it here. We not only complied with conditions that were set to us by the environmental entities. We've gone further than that and established protocols that will enable, not just to preserve wildlife, but to increase that wildlife in the areas that we are present. The project themselves, they're relatively straightforward. They have one characteristic, though, that I would like to highlight is that they have almost 3,000 hours of wind, which is more than 40% above the market average. And that's the place you want to be. No matter what happens from a regulatory perspective, no matter what happens from a market perspective, it's always better to have 3,000 hours than 2,000. And especially when it will come to the end of this, we'll probably won't be around. But in 35 years' time, when this project, the life of these assets will come to an end, the wind will still be there. And here, we bring everything together. We took a project. We improved its development by changing the layout of the project using our own internal energy assessment team. We did an internal PPA -- or could have done an external, the things wouldn't have been done to -- have been too different. Josu Jon mentioned that we have -- besides the internal PPAs, we already signed PPAs in Microsoft -- and we, the AES in Chile. We are negotiating PPAs with other major, major companies, both in Spain and in the United States. So this is an internal PPA because we need EV energy, okay? We did hold EPC ourselves. We broke down the contracts in several pieces. We are leading the operations. And that got us, depending, of course, a little bit on the energy scenario, to an IRR -- a project IRR of around 9%. Now we are considering structured financing, and we are very advanced in settling down a minority stake in these projects. I can guarantee you that this is clearly double digit. And it's not done. Thank you very much.

Good morning or good afternoon to all the attendees. I'm Mikel Erquiaga. And today, I'm representing the exploration business. And I'm going to be talking about which our contribution from exploration is going to be to the energy transition, in particular, different low-carbon initiatives that we are going to be deploying from the exploration site to actually fulfill our ambitions in this energy transition. And then I'm going to go more into detail in carbon capture and storage as one of the initiatives. And finally, I'm going to be talking about a specific project. It's going to be our Sakakemang CCS project in South Sumatra in Indonesia. Well, basically, as I mentioned before, our CEO announced back in December 2019 our ambitions is to become the first, actually, net-zero company worldwide. Following those ambitions, we have been working traditionally in the oil and gas business from the exploration side. And as less and less capital is going to be currently actually deployed in conventional exploration projects, and also additional to that, this capital is going to be dedicated to specific exploration opportunities in specific geographical areas, then the requirement of the geological -- well, of the exploration personnel is going to be less and less in time to be dedicated to traditional oil and gas exploration project. So hence, we are right now in the middle of a transformation process of all our staff, leveraging on our subsurface skills, and we are -- during this transformation, what we are targeting to do is deploy all these subsurface abilities and skills of our personnel into low carbon-intensive initiatives. So first of all, this, all I mentioned, and I forgot that I had to go ahead with my picture. But -- so basically, what are the initiatives or the 3 main pillars that we are following in -- from exploration to support this energy transition within Repsol? So basically, we are dedicating all our efforts into 3 different goals. The first one being carbon capture and storage. And basically, this activity is going to be related to trying to abate all CO2 emissions coming from our activities. Next one would be the exploration for geothermal resources to boost like energy generation with low carbon intensity, basically zero CO2. And finally, we are also, as the company is -- as Tomás mentioned before, as the company is doing a big effort in hydrogen generation, we are also trying to adapt our skills into buffering whenever we have an excess of hydrogen. Because we have good conditions, we are trying to buffer this excess amount of hydrogen and store it in the subsurface to be delivered in moments of -- when it is necessary and we don't have the conditions to create it. And we believe that this expertise that today we have in the subsurface, specifically in -- well, geology and geophysics, everything related to the rock in the subsurface, all this staff that we have in exploration is going to be the source of enormous competitive advantage into this ambitious target that we have. And well, as I mentioned before, we are going to be talking about carbon capture and storage and -- but more specifically, I'm going to be talking about one project that is going to be a reality in a few years. And this is the Sakakemang project in South Sumatra in Indonesia. So I'm going to start saying when this gas discovery was done. So this is a project where we are participating with PETRONAS and MOECO from Japan. And this discovery was done with -- through the Kaliberau 2X well back in February 2019. So back then, it was cataloged as one of the largest discovery -- or the largest discovery in Indonesia in the last decade. And we are talking about the gas discovery of 2 TCF, which stand -- TCF stands for 2 trillion cubic feet of gas. But basically, this gas is not clean. And the problem with this gas is that it's got like high CO2 content. We are talking about 26%. And obviously, one of the mandates -- well, not the mandates. All the commitments that we have is to be net-zero, fundamentally. So any new greenfield project that start from 0 should be net-zero by definition. And obviously, this is what we are trying to do in Sakakemang. So after the discovery, we are right now in the middle of the appraisal campaign. An appraisal campaign is a confirmation of this discovery. We did a second appraisal well after the Kaliberau 2. That is the Kaliberau 3 well. It was drilled in 2020, 2021, and it was completed. And now the next step in this appraisal campaign is the long-duration test. What we are trying to do by executing this long-duration test? We are going to be producing gas in Kaliberau 2 well and we are going to have the Kaliberau 3 as a monitoring well. So what we are trying to evaluate by this long-duration test is the extent of the size of this gas discovery. So we are basically trying to confirm that this is going to be 2 trillion cubic feet of gas. Because depending on the amount of gas in the reservoir, we are also going to have a certain amount of CO2 that we need to store. So basically, at the end of this process, what we are going to have is the final volume of gas that is going to be sales gas, and then we are going to have a certain amount of CO2 that we are committed to storing in the subsurface. And so you have an image there of the Sakakemang PSE and the Kaliberau structure with the first well in the lower end, KBD-2X. And the second well we drilled that is the KBD-3X. But what I'm going to be talking specifically today is not about the development of the gas in the reservoir that is also important in terms of economics. But I'm going to be talking about how we are going to get rid of the CO2 in the subsurface. And the concept in Sakakemang is that we are going to be producing the gas in the subsurface -- from the subsurface and simultaneously, we are going to be capturing or separating this CO2 from the gas and storing it in the subsurface. This is going to be the first CCS project deployed by Repsol and also it's going to be the first in Indonesia because the only thing before Sakakemang is -- are a couple of projects. One is at the FID stage and the other one is at the pilot stage. So CCS by itself is going to be the first project. And today, if we compare this Sakakemang to other projects operating today in different parts of the world that are not too many, at only 6 or 7, Sakakemang ranks among the largest projects. We are talking about things between 0 and 4 million tonnes per year. Sakakemang would be in between those numbers. The storage, if nothing wrong happens, that I hope so, we'll commence in 2027 and will be done into depleted gas fields in the subsurface. As a consequence of the development of the Corridor PSC contract, 2 of the fields have reached the end of their life. And these 2 fields that were initially full of gas are going to be the storage site for the CO2 coming from the Sakakemang project. And obviously, this is not an easy road, no. There are going to be things that are -- we are going to have to deal with in the path. One of them is the regulatory framework in Indonesia. It's not yet developed, but there are signs that is going to be ready or deployed by the end of this year. And the financials of such a project. The cost today is going to be carried by partners in the project, but obviously, we are going to be storing this amount of CO2 without any benefit. And we could be trading those CO2 units elsewhere in the world in terms of offsetting those 2 units that we are storing. In the upper right-hand side, you have like a map of the entire like corridor, PSC and the Sakakemang PSC. The largest of the fields highlighted in red is the Sakakemang field with the 2 wells drilling them. And the other 2 structures you see, one Northeast and the other one Southwest of the discovery are the 2 sites that we have selected for storing the CO2. And if we put this project into numbers, down below, you can see today's Repsol E&P emissions and their forecast, we are starting in 2020 and forecasting after 2040. So you've seen -- in that orange tranche, you see the current and the future emissions. You can see in the upper blue tranche, you can see what Sakakemang could represent in case not doing CCS. So you can see the amount of CO2 tonnes that we are going to be avoiding to be emitted to the atmosphere. We are talking about 2 million tonnes per year, which, in total, along the life of the project, are going to be around 30 million tonnes. Now it's about 15 years of project. And obviously, when we divert this conversation into cost because, obviously, cost is important, especially in CCS. Well, carbon pricing is a parameter that we need to take into consideration seriously. And because the whole CCS chain is composed of 3 main elements, I would say, being the first one the capture that is normally not in charge of companies like us. Unless it is in assets that are ours. And then we have the -- what is the transport -- well, compression, dehydration that is another important change -- chain -- an important element in the chain. Then we have the transportation. And finally, we have the storage in the subsurface. If we turn these 4 elements in the chain into cost, well, basically, capture could account for 70% of the cost. The completion and dehydration is a very low cost. The process is only about 5%. Transportation can be expensive, can be in the range of the 10%. And finally, the CO2 storage is about 15%. In those dots that you can see comparing to the ranges of the cost for the different process as you can see are our preliminary calculations of how much this is going to cost in the case of Sakakemang. Obviously, we are not including the capture because we are not going to capture. We are going to just separate the gas from the CO2. So there is no capture process implicit by itself. So basically, these are the numbers. The breakeven at the 10% could be $31 per ton, again, not including the capture, okay? And this is the first company project. It's an important milestone in Repsol, and we cannot escape comparing our project to other projects worldwide. In this chart that you have here, you can see all the -- instead of CCS, I can say CCUS projects worldwide. Look to be a lot, but they are not those many. The ones that are highlighted in red color are the true CCS projects: carbon, capture and storage. The other ones are projects that are utilizing the CO2 in order to produce more hydrocarbon from reservoirs. So are related to enhanced oil recovery, enhanced gas recovery, EOR or EGR. And I would say at this point that among these projects, the largest one is Gorgon in Australia that failed to store the promised amount of 4 million tonnes per year. They had some technical problems while storing and they didn't even reach the half of the month, so 2 million. And the other 4 projects that you can see on that chart with their respective plaques according to the countries, we have Sleipner. That is the longest life project, is operating in Norway since 1996. Then we have the Snohvit. That is the other one that you can see upper in the scale. And then we have the Quest project in Canada, small one, 1 million tonnes -- 1 million, 1.2 million tonnes per year. And finally, we have the Illinois Industrial in the U.S. that is basically capturing the CO2 from a fermentation plant based on corn and storing it in the subsurface. In the right-hand side, you can see according to the year of deployment, you can see how Sakakemang is comparing with all these projects. Now we are talking about the project of 2 million tonnes, which today, if no other project would be developed would be among the biggest ones. In blue color, you can see the projects that -- well, I could say the future promises. So are projects that are under visualization or development today that have not entered into an operational stage, but are promises that are going to be material in the near future. And one thing that I would like to mention at this point is that today, the install capacity in the world is including -- not only for CCS, it's CCUS. So all the red and pink circles that you can see on that graph is about 40 million tonnes per year. And if we consider the whole range of all the circles that you can see, reds and blues, this means that we are going to get into 110 million tonnes per year by 2027. And again, today, the only 2 CCS projects are 6 that we can see with respective flags on that chart. And finally, I would also like to mention that in order to reach to this point of being ready to deploy or to start storing the first CO2 molecule, we have gone through a complete process of technical assessment of first of the entire Sumatra basin. Then we have analyzed the depleted gas fields, saline aquifers. Then we did a lot of technical characterization of the sites. So we are right now at the very end of the visualization phase entering conceptualization by the end of 2021 and eventually executing the entire project by 2027, as I said before. And well, basically, this is all about my speech. I would like to make a few comments in the very end. That is one of them -- this is the first milestone for Repsol. It's the first project that we're going to be developing. It doesn't mean that -- it's not the only one. So I really hope that we can come out with creative solutions in the future to help our assets to decarbonize. And obviously, the ambition of all this is to turn these CCS activity into a business. Today, it's not the business by itself because it requires a lot of subsidies. But I can guarantee that in the future, this is going to be a business and a very important business. And the last notice that here in Repsol, we have all the skills necessary to develop this type of projects, starting from Sakakemang and continuing elsewhere in the globe. Thank you very much. Good afternoon.

After having seen so many examples of our strategy in action, let us now look at how we are going to shape our strategy in terms of metrics and objectives. And we are very carefully listening to our ESG stakeholders and taking note of what they are further expecting from us. So every time I start speaking about this, I'd like to begin by reminding that where we are today is the result of many years of work of many people from Repsol, what we call the Repsol DNA, that after -- or during 20 years, we've been trying to build our leadership position in climate matters in the oil and gas sector. So we can mention starting at the early 21st century, being the first oil or gas that supported the Kyoto protocol, then supporting very early in 2015 the Paris agreement, together with some other European companies, then moving to be the first oil and gas that launched a green bond based on CO2 emission reduction being the first oil and gas in the world in December '19 announcing and committing to be a company in 2050. So along these years, we've been accompanying this effort with strategies with emission reduction plans. We are now undergoing the fourth one for the period '21 to '25 and with engagement with the stakeholders and with our peers, for instance, joining back in 2015 ODCI. So we'll be building this position, and let me now outline where we are today. Well, we have built a position based on ESG attributes. And for the time being, it seems to be working. We are well recognized in all the ESG rankings as topping the sector of oil and gas companies in ESG matters. And we are glad to be one of the companies with the highest percentage of ESG investors in our institutional shareholders. 36% now as compared with an average of the sector of 16. We dedicate a lot of time and effort to have quality reporting and quality disclosing of information. And well, we have a very clear road map, a road map with specific actions, some milestones every year in order to comply first with all legal requirements. That's by itself necessary. But believe me that this is getting every year more complicated. We have a lot of requirement in the Spanish law. We have requirements at European level, the latest one coming from the EU tax -- on sustainable finance. And we are also helping and supporting the finance institutions to comply with their own requirements by following the regulatory technical standards. On top of that, we are engaging and committing to comply with the best recognized reporting frameworks. And we have mentioned GRI, and we are fully in compliance with that since 2020. but we are also joining the effort on complying with SASB, which is more coming from the U.S. world. And in 2018, we committed to comply with TCFD, which is the reference reporting framework on climate. And we will be completed 100% compliance in 2021 with specific milestones in 2021 and 2022. We are also now engaging with the latest reporting standard from the World Economic Forum. So what we have now and where we are now, we have what we call a package of KPIs that represent our position on climate and our commitment and our objectives on this matter. So we like to speak a lot of package, and I will elaborate a package of KPIs, and I will elaborate later. The key indicator is what we call the carbon intensity indicator. We have been engaging with all the stakeholders on this. And we have one that we firmly believe, which is rational, science-based and it's fit for purpose to mobilize our organization towards our objectives, which is net zero 2050. We base this indicator including Scope 3 emissions based on the products that we produce coming from our primary energy. We use an in-house method for the so-called substitution impact of renewables, displacing or shifting emissions from the electricity mix, we believe our procedure is more fair because it's just taking this credit in the country and in the year that still there is a real and actual shift of emissions. It's not a theoretical calculation. So when you are in a country in a year where everything is renewable, your credit has disappeared. And of course, we have interim targets for 2020. I believe we were the single company having such a short-term objective on reduction of emissions 2020 and of course, 2025, '30, '40 towards our net zero ambition. But the package is more than that, because the carbon intensity index is some of the parts. There are many parts contributing to the indicator. So for every business segment, we allocate specific targets that builds into that carbon intensity indicator. That's why we speak of CO2 per barrel for E&P. We speak about the volumes of hydrogen and bio -- advanced biofuels for the industrial sites and we speak about renewable electricity production. You've been hearing about all these objectives for 2025 and 2030. So basically, we firmly believe that the climate matters are complicated enough not to think that a single KPI fit for all and you are able to compare with a single metric everyone on the road. So we need more than what -- you will need, in fact, more than one KPI and you will need judgment of experts in order to assess all these bunch of KPIs and then decide which strategy better suits the needs of the society and the needs of the net zero ambition in 2050. Of course, we fully understand, and I believe that we are consistent on that, that there is a need of standardization of metrics and targets. We shouldn't do everything very different one to others. So what we are offering is being very transparent, being very communicative with our stakeholders, with all the initiatives that are now undergoing standardization efforts like the science-based target initiative or the oil and gas net zero standard from Climate Action 100+. So we offer that transparency, and we offer full engagement in order to be compared under any KPI that a certain benchmark would like to use. Okay. So this is where we are, but we fully understand that our ESG stakeholders, especially our investors, they are asking for more and we listen, we take note and we take decisions on that. So we understand that our investors are pushing us for, I would say, profitable decarbonization, push decarbonization to the limits of profitability. In terms of metrics and targets, specifically, we have been requested to report and to commit on absolute emissions, not just on carbon intensity. We are being asked to provide more detailed long-term scenario analysis. And I will tell you something about that in a while. And well, we are again asked about why we use one other methodology on Scope 3, why we use or we shouldn't use avoided emissions, and we are engaging in all these fronts. There is also an interest on our ESG investors on capital allocation, how we promote capital allocation to low carbon and also whether we should continue reinforcing the climate governance at all levels in our company. So what you can expect from us today and in the near future, first, metrics and targets. First of all, of course, Josu Jon, our CEO, has just announced our new ambition, new decarbonization pathway with carbon intensity reduction more stringent than we had in the past, built on specific business initiatives like renewable hydrogen or further renewable power generation objectives. We are announcing today also new absolute emission targets for 2030, and we are announcing a new target for methane emission intensity. And of course, we are going to commit on more scenario analysis details on continued delivering on our reporting road map, the milestones that I've just described and proactively participating in all standardization initiatives. So let me go into some detail on 3 of these topics for today. The scenario analysis. We are making a thorough work on developing long-term scenarios that for -- that better describe our decarbonization reduction towards 2050. We call it central scenarios. I will explain a little bit about this. in the short to medium term, this decade. Everything is very deterministic. What you've been seeing about the business objectives is directly translated into carbon intensity reduction. I will go into some details later. For the longer term, 2030 to 2050, then we need to run a number of scenarios because we run on the uncertainty of the long term. But now we are being more focused and we are being more clear. And we are right now quantifying all these scenarios. And for the -- let's look at the different business segments for these long-term scenarios. On one side, the industrial, refining and petrochemicals, we are going to be relatively deterministic on that. Now we have the European Green deal. We have certain picture that is really the most stringent in the world for, let's say, oil and gas products. So we are going to decarbonize Europe. The ambition of Europe, of course, it's been net and the transport sector, which is very key for our Industrial business, they need to be 90% carbonized in 2050. So this scenario is going to be fully compatible with that have net zero ambition for 2050 for all of our industrial sites. For exploration and production, we are running on 2 scenarios, and we see and will comply with both of them, a sustainable development scenario and net zero emission scenario of the International Energy Agency. What that means is that we are factoring into our own production of hydrocarbons. We are factoring the decline of oil and gas that these 2 scenarios of the agency is projecting for the whole world. So we are going to commit to net 0 under either of the 2 scenarios. For the low carbon generation, it's going to be the same but it's more regionalized. The agency in this sustainable development scenario on net zero, they project an increase in renewable capacity in the world by region. So we are factoring that when we are with 20 gigawatts in 2030, the evolution will follow the path of these 2 scenarios of the agency for our company, the same than for the regions in which we are located. So you see that probably this is going to be a quite from our point of view, a quite, let's say, a reasonable way of committing that our scenarios are aligned with Paris and are aligned with net zero 2050. Then you see on the right part of the slide that we are running some alternate scenario, we call them technology-biased scenarios. From the central scenario that at the end of the day, we will have 2 sustainable development and net zero, then you will imagine what happens if one of the levers of the carbonization works more than the others. Electrification with renewables, hydrogen or low carbon liquid fuels, and we'll run all this and see which is the impact of that on our business. At the end of the day, in any of this scenario, our commitment to net zero is intact. I mean we will not rely just on net zero if we select one of the other scenarios. Something or some color about carbon intensity indicator. I will not repeat the new pathway that Josu Jon has just announced. But I would like to stop in 2030, and I said we are going to be very deterministic just to give a color on the 28% reduction of our carbon intensity indicator. You see that in the graph on the right part of the slide, how we are reaching the 28% reduction in blue in the graph. And there is, I believe, a nice message over there. because Josu Jon was mentioning about we believe that all technologies are necessary in order to reach our ambition, low carbon fuels, renewable electricity generation and, of course, working on our legacy operations and reducing Scope 1 and 2 emissions in that assets while we are progressively substituting the energy mix. And you see that the 2 first verticals are related to legacy operations. We call it efficiency, our emission reduction plans, and we call it legacy portfolio transformation. It's basically to say it's simple, the reduction in hydrocarbon production along this decade is going to be relatively flat for a while and, later at the end of the decade, is going to start decreasing and also the reduction and adjustment of the refining activity processing of oil and gas according to the European Green Deal. So the second -- and you see that we are getting -- you do not see very well the numbers, but around 8 points reduction due to these operational legacy activity. Then the second is low carbon fuels and circularity, basically renewable hydrogen and advanced biofuels, another 8 points of reduction. And you see more than 9 points of reduction because of our low carbon of our renewable electricity generation. Interesting enough, you see there carbon capture use and storage. So little contribution during this decade, 1.4%, and this is exactly the Sakakemang project that Miguel was commenting. After 2030, we are factoring more of carbon capture use and storage. And definitely, we are going to be very attentive to the work of our [ dean ] exploration team because they may be advancing some of the projects even including in this decade, but we want to be very deterministic and very clear and so you can identify every driver of reduction of carbon intensity tying that to specific projects. Okay. I believe this is what I believe is a significant announcement for today. We are committing to reduce 55% our operated emissions Scope 1 and 2 by 2030, absolute emissions. And we believe this is an ambitious target. And again, it's a contribution of many factors that you will see in a while. We are also asked about the numerator of the carbon intensity index. Normally, the stakeholders when they hear or when you hear about carbon intensity, you say, okay, carbon intensity may be reducing. But if you are producing much more energy and this energy comes from carbon-intensive operations, you may be increasing your absolute emissions. That's why we are announcing also a new target of Scope 1, 2 and 3 net emissions in equity basis. The numerator of our carbon intensity index is going to be reduced by 30% in 2030. So this compares with the 28% of the carbon intensity index reduction. So we are not playing with the numerator and hiding any increase of absolute emissions. On the other side, methane is getting more attention. It's a very powerful greenhouse gas and is getting every year more attention. Now we have what is probably becoming a referring standard of a high-quality operation of gas assets, which is 0.2% of methane per volume of gas you are producing. And we are taking this high standard, that is going to be probably the referenced one in Europe and in the States in a while, and we are committing to get there in 2025. So that implies moving the old objective of 25% reduction to 85% reduction. This is a dramatic change. I will not hide that this has a consideration about the Malaysia disposal there. After Malaysia, we can be at around 0.3%. But believe me that moving from 0.3% to 0.2% requires a lot of effort, and there is a very thorough plan in our E&P operations to be there as soon as in 2025. Okay. Some words to end about climate governance and capital allocation. We are glad to say that we had a number of meetings and our CEO, Josu Jon, had a last meeting with Climate Action 100+. And well, at the request, we -- our Board has agreed to submit the climate strategy and targets for our -- to an advisory vote in the 2022 general assembly of the company that will happen probably by March-April next year. So we have also updated our association evaluation report, lobby associations and so on, how their lobby activity and advocacy activities if they are aligned with Paris and with our own strategy, and it's in our website since July 2021. Capital allocation, we need to promote capital allocation to low carbon. So we have already in place an in-house method to be sure that when the ExCom of the company and the board of the company approved any new investments, they know which is the impact, either positive or negative on the carbon intensity indicator and whether this is in alignment with our carbon intensity reduction pathway. Again, this is an instrument for the top management of the company. But at the same time, because we want to promote positively the investments in low carbon, we are announcing today also, that we are increasing the internal carbon price that we use in every new investment, again, to incentivize the low carbon. We will have, from now on, a baseline of $60 per ton coming from 40 some days ago -- till some days ago. And for the -- specifically for the European Union, we will use $70 in 2025 and $100 per ton in 2030. We believe that this will be a big push to our decarbonization efforts and will further promote low-carbon investments. Just reminding that we are coming from $40 in 2025 and $70 in 2014. So just to finish a summary of our announcements today. Josu Jon said about the carbon intensity reduction, 15% in 2025, '18 -- 28% in 2030, 55% in 2040 and 100 in 2050. That means being net zero. Just to clarify, and you see some dotted lines over there, and I believe this is also very relevant, when we started putting our first carbon intensity reduction pathway, we said, as of today, and with the evolution of technologies that we can imagine or we can project, we will be 70% with the technologies that we think we will have without big disruptions. Now we are 90. So we are now much better sure that hydrogen technologies, renewable electricity, storage and so on will likely make us think that we can reach 90% decarbonization just with energy technologies. So we say, okay, the closing gap, this 10% will be done either with more technology, if there is -- if it is available or with natural climate solutions, and we are there today. Absolute emission reduction, minus 54% in 2030, Scope 1 and 2 operated and minus 30% Scope 1, 2 and 3 net, which is the numerator of our carbon intensity indicator. Methane intensity, a new target of 0.2% methane intensity as soon as in 2025. I've also highlighted that we would like to share that with our stakeholders about the more detailed scenario analysis. We believe this will be ready by the end of the year and ready for discussion with all interested parties. And we will have a significant part of it incorporated into the integrated management report that will be presented in the next general assembly of the company. We are proposing this advisory vote for the general assembly to and higher internal carbon prices that we like to think that will promote new low-carbon investments. So we believe this package is comprehensive. We believe it's an important milestones in our decarbonization strategy. And definitely, we are committed to continue pushing our decarbonization strategy to the limits of technology and to the limits of profitability. Thank you very much.

Thank you very much, Luis. With that, we finish the presentation this afternoon. Now it's time to share some video materials we have prepared, one video summary -- all the announcements we have done today. And secondly, another video material, which highlights testimonies from some of other partners, which are accompanying us in this decarbonization pathway. Afterwards, we will have a Q&A session that -- with the questions we received from the sell side. And for that, we will have together with Josu Jon and Luis Cabra, we'll have Maria Zingoni, Executive Managing Director of Client and low carbon generation. We have also Juan Abascal, Executive Director for Industrial Transformation and Circular Economy. And we have also Antonio Lorenzo, our CFO and the host of this event today. So see you in about 10 to 15 minutes. Thank you very much.

Welcome. Welcome back to this Q&A session of the Low Carbon Day. During the last days, we have received several questions regarding the different platforms we covered today as well as the questions received up at this moment. So in -- with the idea of saving time, I'll try to summarize some of them jumping from one thing to the other to be sure that we cover all of the platforms we have today. And we are going to start by refining. And the first question made by Michele Della Vigna, Goldman Sachs. He's talking about Repsol feedstock sourcing strategy for biofuels, either long-time contracts with suppliers, alliances with partners and of vertical integration, pros and cons of its alternative.

So [Foreign Language]. Good day, everybody. I think that your question is very crucial. It's important because, I mean, we are migrating from first generation biofuel to new businesses where we are going to produce advanced biofuels. So the feedstock, as you are underlining, your question is fully changing. And we have -- in this new model, we have to explore different models to secure waste and receive streams. And we have a range of options from minor to full integration in the value chain. And we are analyzing, considering and working on all of them. We are considering a spot market. I know that the spot market is not the best solution in the long term, but I mean in that range could be an opportunity to maximize the profits on -- the profitability of our business. Long-term supply contracts, in some cases, deepening in the degree of relationship with the partners, joint agreements, joint ventures and, in some cases, right, not even acquisitions. I think that the crucial issue, the most important thing is to secure the feedstock to guarantee that we are able to produce these new biofuels. And securing the classification and pretreatment stages is an important step to guarantee all that. And I think that, in Repsol, we could have some knowledge and we can profit from our expertise on that, but we have to gain forces with waste management players. So the main target will be to aim to secure most of the needs, leaving some room for spot market opportunities in order to optimize the mix. And that is what we are doing our approach as Rafael Jimenez explained some minutes ago, relies upon building long-term partnership to leverage circular economy projects at a local level. That is, for instance, the case in Tarragona in the project where set as a manager of waste is going to guarantee that. Same thing we are going to do in Bilbao in the project in the port to produce biogas from local urban wastes. The same thing we are working in, in the case of the one in polyurethane in Puertollano. So the key is having flexibility to use different raw materials and we are going to implement different strategies depending on technologies to enable every option. So thank you, Michele.

Thank you, Josu Jon. Other question, which is going in this sense is made by Biraj Borkhataria, RBC and Jon Rigby at UBS that I specifically questioning about which type of renewable raw materials would Repsol target. Will they be mostly first-generation, vegetable oil or second-generation wastes?

John, it seems to me that Juan is going to answer this question in a more accurate way than myself . Juan, go ahead, please.

Thank you for the question. As Josu Jon has said, we are migrating from first generation to second generation raw materials. This is a trend that has already started in our refineries, in our HVO production. We are trying to include more used cook oil in our streams, and that really is something that we are going to continue for the future. And in that sense, all of new projects are going to be based on feedstocks, included Annex 9 of both Part A and Part B. And this is because many reasons from economic to technical ones. First of all is that we'd like to go away from the limits that are established for generation raw materials. As you know, there is a limit of 7%, and that goes to -- 2003 for those per generation raw materials that have a high risk. Secondly, from a tax perspective, the new Energy Tax Directive that has been proposed under the FID 455 packages establish a tax incentive for advanced BOS and for second generation raw materials, while the ones that are coming from first generation are going to have same taxation as the mineral oil. I mean during the transit period of 10 years, they're going to be half of it. But after those 10 years, the tax of those value of oil based on first generation are going to be taxed in the same way as the main alloy. Third, because there are some advantages in terms of our accounting for second-generation raw materials is something that has been incorporated from renewable directive into Spanish legislation, and that obviously provides an economic incentive as we can provide more product to our clients. And once this energy relatively moved to an objective of reduction of green gas house emissions, there is also an advantage on second-generation raw material. That is that the reduction in carbon footprint is much higher than with first generation, for example. First generation, HVO has a reduction in carbon footprint, around 50% to 60%, while second generation is around 90%. So this is also an advantage from this type of raw materials. And last but not least, there are in second-generation raw materials, local opportunities that would like to profit, local generation opportunities in municipal solid waste, and we are working with different players in the Basque Country, in Galicia to join forces and to work on these second-generation raw materials. Also, there is some advantages and opportunities in agricultural and forestry residues. And again, we are working with the agriculture association with a company that have a long tradition managing biomass. So there are also additional opportunities in the local environment that are more aligned with economic development and circular economies. So for those, all these reasons, our intention is to move and to focus on second-generation raw materials in the future to stream our biofuel's objectives.

Thank you very much. We continue with the refining, but changing the subject. Lucas Hermann of Exane BNP is asking about what is the place of the refining business in a world that aims to be a net zero by 2050. Also, if there is future of refining in Europe, and if Repsol is considering shutting down or the reconversion of some of the refinery units.

Thank you, Lucas, for your question, and good day again. I mean I'm going to be very clear. I'm going to underline my vision in a very loud and clear way. For me, refining is not the past. Refining is the future. I see a lot of opportunities for the refinery of the future, first of all, because the world is going to need oil in coming years, in 34 years because at 40%, 50% of the oil application, they are not going to emit CO2. So that is important because they are going to be applied. In application world, there is -- there are no CO2 emissions. And secondly, because we are transforming the refinery of the future. That means that we are open to different technologies to transform refineries to this concept of net zero refineries where we are going to produce liquids. We are going to produce gases that using feedstocks that are going to be fully differently from oil. We are talking about renewable generation that is going to produce hydrogen. We are talking about capturing CO2. We are talking about fat -- animal fats, recycled vegetable oils, products coming from the pyrolysis of plastics and so on. So that is a different concept of refineries focused on net zero. So we are not going to process 900,000 barrels per day of crude oil in 2050, be sure about that. But that doesn't mean that refineries will close because they will process most of the feedstock from renewable sources, CCS technologies that are going to close the gap to the net zero. So the concept is expressed in your question, Lucas, is what is going to happen with some refineries in Europe. I mean, that is going to happen. What has always happened. Less competitive refineries in Europe are subject to close. And one of Repsol's main strategic lines continues to be competitive in this future. That means that -- remember that today, we have our refining system in the first European quartile in net cash margin terms. We are going to go on doing that, increasing our energy efficiency plan. And it seems to me that all this concept of circular economy, all this concept of transforming our refineries -- in refineries focused on the net zero concept are going to increase the profitability of our refineries and are going to protect, in some way also refineries in any European market that is going to be more sustainable than some other areas in the world. So profitability, value creation are going to be the real drivers of our decisions in this refining business that, as I said before, is going to be a business of the future. Thank you.

Thank you, Josu Jon. Moving to chemicals. Oswald Clint at Bernstein is asking us about our view on the economics of chemicals from waste, specifically on the strategy, production objectives and expected returns.

Thank you for your Interesting question that was analyzed by Rafael Jimenez before. But I'm going to underline some messages. I mean, first of all, what we are producing today in terms of polyolefins, I'd like to underline that 100% of all the polyolefins we are producing today are recyclable. So the target is in a real way to recycle the equivalent of about 20% of this polyolefin production by 2030 with a milestone target of up 10% by 2025. So that means that we have to go on increasing before we are developing to do that. We have a wide range of technical solutions to do that. In some cases, the solution is going to be mechanical like the project we are promoting in Alicante where we are going to take different kinds of polyolefins, either polypropylene or polyethylene, in order to produce new polyolefins that are not going to reapply, for instance, in packaging in some high premium application, but they are going to be able to be part of furniture and some other products. We are also working in the technical solution of chemical pyrolysis. Chemical pyrolysis is something that we are today working in the refining area, taking plastics that are pyrolyzed and are going to be used, they are used as feedstock to produce hydrocarbons. And as Rafa explained some minutes ago, these chemical biologies products are going to be the feedstock of new chemical products, having the capacity to be applied in a high premium application like packaging, para pharma and so on. Another chemical solution is the chemical gasification, and chemical gasification is going to be applied in areas where we have a complex mix of waste in some way, organic mixed with polymers and so on. Gasification is going to be the solution to use these byproducts or these products in new applications like the methanol project in Tarragona with Enerkem and SUEZ. And finally, in some cases, mainly in areas where we have the third most stable polymer like polyphase and so on, so we have to break in a chemical way, the molecule, and we are going to use acidolysis processes like the process we are going to use for the forms of polyurethane in Puertollano. So each solution suitable for different source of plastic waste or focus to a different market. But again, I mean, we are not talking about license to operate. License to operate is important, of course, because it's -- I mean, it's engaging the company to this feature from net zero the stakeholders in the areas and the communities where we operate. But we are talking about business opportunities. So we have regulation. We have a market premium. We have clients that are ready to pay more for this recycled material. And again, we are giving an additional differentiation to our polyolefins that in some way are also giving us a competitive advantage in market terms within the European market. The returns are, in most of cases, involved 10% of return in this kind of projects. And I'm not going to repeat all the announcement that we announced over the last months because I think that Rafa Jimenez explained in a very accurate way the Tarragona project, Puertollano polyurethane, the agreement in Alicante with Aceteco so on. Thank you.

Thank you, Josu Jon. Let's move now to hydrogen. Sasikanth Chilukuru of Morgan Stanley is asking if current regulatory framework is enough to support the profitable development of green hydrogen.

So hydrogen is in fashion in Europe. That's true. But I mean, we are not talking about fashion because hydrogen is part of our business. As Tomas Malango explained before. hydrogen today, we are hydrogen producers, the main producers in Spain. We are consumers and so on. And it's true that when we are talking about renewable hydrogen, it's a spin market that is going to require full regulatory framework for supporting mechanisms to enable the sustainable growth of this market. So what kind of levers, what kind of mechanisms? The first one is going to be the access to our competitive renewable power generation that is going to be very important. And it seems to me that the more the renewable production will be developed, the more opportunities we have to get these low prices in the market. The second one is very important as what the European Commission is promoting in the Fit for 55 package, that has quotas for hydrogen in transport and in derivative consumption. It's also important to have, and it seems to me that European Commission within the next generation package is promoting or is going to promote direct economic incentives to this kind of projects to accelerate hydrogen-related investment. And of course, I'm sure that authorities are thinking about favorable tax treatment of low carbon fuels in the first maturity phase of these fuels as they do with any technology that needs some kind of support to mature. So Fit for 55, coming from the European Union is positive for that. It confirms strong support towards hydrogen and its derivatives, including consumption quotas in transport and industry. And let me add that perhaps new regulatory initiatives are going to be needed, and they are still in the works to cover additional dimensions, for instance, the hydrogen for the gas sector, renewable power conditions for hydrogen and so on. But summarizing, First of all, there is a rationale to promote hydrogen because it's the way to get and to achieve areas that are not going to be decarbonized. Otherwise, if we don't use something different to electricity because technology today is really difficult. And secondly, I think that there is a real regulatory push that is going to achieve this target of having renewable hydrogen competitive and Repsol in some way is going to take advantage of this situation to launch this business in our company.

Thank you, Josu Jon. Continuing with hydrogen. Joshua Stone at Barclays and Giacomo Romeo at Jefferies pointed to things that are very popular these days, which are prices for gas and prices for CO2. In particular, they're asking to what extent do higher prices make green hydrogen more attractive than blue. And what are Repsol's CO2 long-term price assumptions and its impact in the economics of your projects and targets?

Juan, I think that you manage all these economics. So please.

Thank you, Josu Jon. Yes, I think that to ask this question, it's good to remind how the cost structure of both type of hydrogens works. Blue hydrogen has a cost structure, mainly the natural gas price and partially CO2 price, and I say partially because the aim of this type of hydrogen is to capture as much as possible of the CO2 that is going to the atmosphere, right? And then obviously, the cost of capture, transport and storage this CO2. In terms of the green hydrogen, the cost structure is very different. What you have is the cost of the electrolyzer, the CapEx and then the cost of renewable electricity. So having said that, it's now clear that it's not directly impacted by natural gas prices or CO2 prices. Having said that, if we look at the CO2 prices, it makes little difference between green and blue just because the recent -- already saved in terms of cost structure. The aim of the blue hydrogen is to capture the CO2. So only the part of the CO2, that is not captured that [imagine] is 30% is impacted by the cost of CO2. And if we are assuming this 30% and taking into account that 1 tonne of hydrogen produced 9 tonnes of CO2, we are talking about 2.7 tonnes that in real terms is less than EUR 0.1 per dollar, the impact of movement in EUR 10 in the CO2 price. Regarding gas, this is different. And when we were doing this -- all this modeling before this gas market that we have today, we find that blue hydrogen was around EUR 1 per kilogram cheaper than the green one, right? Well, with today's gas prices, that's not the case, no longer the case. Probably it will come to the previous place in the coming months, but as of today, that case because gas price has a relevant impact on the price of gray and blue hydrogen, moving EUR 10 per megawatt in the gas market, implies an additional cost of around EUR 0.50 per kilogram in the blue hydrogen. And this is really because 0.5 is around 20% of the price, that's an increase of 20% in the price of hydrogen. And on the other side, obviously, green hydrogen is not directly impacted by the gas prices. But apart from price and the impact on competitiveness of green and blue hydrogen, it's important to take into account of the difference that also create an edging competitiveness that are not directly related with price. First of them is that blue hydrogen requires transport and storage of the co 2. And this is not an easy task in some countries, for example, in Spain, we have recent experience with the gas storage system that didn't work well. And it's very unlikely in the short term that we can face this type of storage in our countries. This is more oriented to the northern countries in the European Union, right? So this is a key difference between blue and green hydrogen. The second one is that, as I said, blue hydrogen is dependent on gas to produce these hydrogen. So we are not reducing our dependency from a European standpoint on the natural gas. And we are still stick with this volatility, natural commodity prices something that we will not have with a green hydrogen in the sense that when we go for renewable energy, it's quite straightforward or there is a competitive market of PPA where you can secure your price of electricity for the next 10 years because at the end of the day, it depends on the CapEx of the solar farm, the wind farm and the resources, the availability of resources. And that's it. So stability in energy prices, not dependency on natural gas and they need to transport and storage, the CO2 also makes a difference between the green and the blue hydrogen apart from gas prices or CO2 prices. And that's probably the reason why green hydrogen is more favorable in the regulation when you read the regulation in the European Union, more favor in regulation that is treated -- sorry, less favor in relation stated more like a transitory element -- transitory tool rather than a final tool to cope with energy transition.

Thank you, Juan. Now we're moving subject to customer-centric, Fernando Lafuente at Alantra; and Alessandro Pozzi, Mediobanca asking about electric mobility, in particular, what are the economics of charging network in Spain? And what percentage of electric vehicle penetration is needed to make charging networks profitable?

[Foreign Language] I mean, it's true that what you are saying about the electric vehicle penetration in your question. I mean, in Spain, it's still a tiny market. Spain lags older European countries in penetration of electric vehicle. It seems to be maybe that -- I mean there are many reasons for that in terms of location, purchasing power, geography, perhaps government incentives, the penetration of single-family homes that is different in Spain from other European countries. But saying that, we have developed over the last years a great effort to be present in this market. Today, we have more or less 1,300, 1,400 public recharging areas. And more or less 300, 400 are public, and 70, 75 of them are in our service stations. So we are in this business to make money, so you could say, why are you investing so hard in this e-mobility business? One, profitability of the e-mobility network in Spain is still far away because investment on a public carrier needs average of 10 charges per day, and daily average is still around 1 charge per day more or less as Mavi is telling me. So -- but we have to take into account that Repsol advantage is that the return from public recharging considers also the electricity supply income at home. We have 24 million customers in Spain and Portugal. We're going to -- and we have the firm intention of accompanying these customers in the energy transition. And we are firmly committed to electric mobility even if it's not directly today profitable because it's in some way is the anchor, is the way to enter and to offer -- a dual offer to our customers either in the service station or at home. So Repsol's e-mobility strategy focuses attracting new electricity customers at home to unlock new margins of the current loyal customers in our service station business. And we have to take into account that the position we have with the current customers in our service stations has been one of the key drivers behind the growth, the organic growth we have experienced over the last 2 years in the retail power business in Spain. So that's the rationale behind the business we have in the service for electric vehicle. Ramón?

Continue with the multi-energy offering. And Pablo Cuadrado, Kepler Cheuvreux are asking, can you elaborate on Repsol loyalty strategy for multi-energy offering and e-mobility? Are you seeing any benefit of the multi-energy offer in Spain? What is the success of cross-selling gas and power?

Mavi, I think that you are going to develop this answer in a better way.

When we think about our customers, we split them between -- I mean, the B2C, the 24 million customers that Josu Jon mentioned and the B2B customer. When we think about loyalty and the loyalty strategy that we are pursuing is more oriented to the B2C customer. I mean the aim of it is let's offer those B2C customers a win-win situation. It is a winning for Repsol, it's a winning for us because we have a more loyal customer with a, let's say, a larger share of different energy products, but it's also good for the customers because they can have a different, let's say, set of energy products and services that he or she needs at best prices. So I'd say that Jose and explained it quite well. Our strategy here is we're going to be multi-energy, customer-centric and digital-oriented company. So at the end of the day, the loyalty is a digital or the loyalty program, it's a digital tool under which -- with which we can leverage, I mean this multi-energy offer to our customer. So the focus is if we are offering that multi-energy, we cannot have different programs or different benefit programs. We need just only one. For sure, it is easy to say, difficult, I mean, to a shift in terms of pulling all the different business of the company altogether and offer that -- those gaming benefits, et cetera, to the end customer. But we understand that we are close to it. So at the end of the year, you will have it. It is going to do through wireless and the benefit for is when you have a more loyal customer, you have a lower term. And as I said, higher margin per customer, not per unit of energy that, that customer consumes. That's the other way around. It's a higher margin per customer, and that's the focus that we are having. And in the second question, if we are seeing any benefit of the multi-energy offering in Spain? I'd say we can do something that other companies cannot do other than in different ways, making JVs, partnerships, et cetera, we can do it ourselves. We can currently offer all the energy services and all the energy products the customer needs either energy for mobility, energy at home in different ways. So we can be that mobility leader or energy leader at home with that digital tool. So the answer is yes. We are seeing the benefits and the benefits are, you can also track them with a number of power and gas customers that we are having every day.

Thank you, Mavi. Moving on now to renewables, Oswald Clint at Bernstein in asking what is our view on the future power crisis in Spain and risk of Globex? What is the impact to Repsol of the new Spanish regulation? And how does this regulatory uncertainty impact our expansion plans?

So thank you, I mean, because we are talking about uncertainty and so on. Let me, first of all, express my conviction that Spain is a stable country where the rule of law works. We have a stable institutional framework. In Spain, we are a mainstream European Union country. And let me say that in general terms, I'm sure and I'm convinced that Spain is a reliable country for investors. Saying that, I mean, I think that growth has happened in the electricity pool price is, in some way, something extraordinary and temporary. Remember that in 2019, the average of Spanish pool was at around 47, 48 megawatts per hour. Last year and probably impacted in a negative way for the pandemic was at around EUR 34 per megawatt hour. And I mean, the futures market expects around EUR 190 megawatt hour for next 3 months for the last quarter of this year. So in 2022, prices expected to remain above EUR 160 megawatt hour in the first quarter and probably around EUR 100 megawatt hour since April on. And going forward, we expect prices to drop in 2022 to 2027, 2028 to the EUR 50, EUR 60 megawatt hour level because the supply-demand tightness is going to be reduced, and we are going to see an increase in terms of renewable generation penetration. So in some way, from my point of view, this temporary regulation is responding to what is happening now that is, in some way, unique and is extraordinary in the market. And underlying again the message that from our point of view, Spain is stable and is available country for investors. Saying that what is the impact of all that in -- on Repsol? First of all, let me say that it's not material. If we take the renewable generation business on the retail power and gas business, I mean an increase in the pool price of EUR 5 megawatt hour is all in all impacting in a negative way in minus EUR 0.2 million, minus EUR 0.3 million in the whole quarter, so close to 0. That means that we are even in the whole business, renewable generation plus the commercial business. Going to the industrial businesses, and it's true that in many Spanish industries, the impact is going to be very negative. In our case, we are also even because remember, we have generation of 600 megawatts of power that is producing and exporting energy to the system. At the same time, we are importing for our needs. And because we are almost even, it's true that this impact has a negative impact on 2 cogeneration. We have that all that is going to be offset by lower electricity tax that is one of the new measures approved by Spanish government and cheaper cost. So all in all, the impact of this situation we are experiencing in terms of one shot or temporary high prices in the pool plus the new temporary regulation to cope with this problem is more or less zero for the whole businesses of Repsol. And that is not going to impact in any way in our expansion plans. We are going to go on growing in the renewable sector. As we announced today, increasing default, of course, working in a geographical diversification in many countries. Spain is one of them, and we are going to go on with our expansion plans. Thank you.

Even with renewables and our planned disposal among others, Matthew Lofting at JPMorgan and Biraj Borkhataria at RBC are asking what is the rationale for a spinoff versus a partial sale? What does a partner need to bring to the table? And what is the status of our IPO dual track process as of today.

Mavi, do you prefer to put more color in this question?

I'd say, since we announced this strategy plan last year, we said that we might look for a partner or partially sale or IPO of the low-carbon business and the rationale of it is the cost of capital. The cost of capital of this business is lower than the average cost of capital of the company. So being able to reduce the cost of capital of this business alone will help us accelerate, I mean, the growth of this business and achieving the targets that we set today. I mean the status, and I'm aware that when we released the plan, we said 12 to 18 months, and it's going to be almost a year. But it's also true, Josu Jon, that when we said that, I mean, we were working on 2 things at the same time. It is true that we were working on looking for a partner, but it's also true that probably most important than that was the delivery of the business plan. So I remember that when we took the strategy renewables to the discussion with the Board of Director, we set very clear 3 stages. First one that was during 2019 and 2020, where we said we need to set up the business. It means attracting the challenge, just defining the internal processes, start acquiring part of the pipeline, et cetera. Phase 2 is where we are today, the first 5 years of this decade where it says, okay, we need to keep on feeding the pipeline. We need to build the projects that we have. We need to derisk them. We need to sign PPAs. We need us to explain before just rotate or partially dilute any assets, any firm that we have already put into operation. So we are doing all that and at the same time, growing internationally with the -- in Chile and the U.S. So if we should have -- if we would have done, I mean a partial say before, we would have leave a -- left a lot of value on the table. So that's the reason why we say, okay, let's deliver first. And once we have, I mean, the material side and fulfill the different milestones that we wanted, let's accelerate the process. So we are probably reaching that stage now where we have delivered. We are finally delivering on different projects that plan. And when it comes to the acquisition as clean as possible then the building, then the energy management with signing PPAs and the different management of the energy that we have opened, looking to dilute partially the assets, project finance than the one that we signed in Chile, et cetera. So once we are in there, we might look to accelerate that process that, in any case, will take us probably the next 6 months. So that is where we are today.

Thank you, Mavi.

Thank you very much, Mavi. Moving to carbon, Kim Fustier at HSBC is asking, could you kind of quantify the contribution of carbon offset to your 30 million, 40 million, 50 million reduction targets? What will be the breakdown between CCS and natural base offsets?

Thank you, Ramon. Mikel Erquiaga this afternoon here explained in every clear way, the Sakakemang project. And let me say that during this decade, the only project we have factored in our carbon intensity in this reduction for the CCS area is the Sakakemang project with a geological storage of 1.6 million tonnes per year of CO2. Post 2030, our call for more carbon capture use and storage solution, in some cases, will promote carbon capture and linked to operations. In some other cases, the linker to e-fields like the project or some other carbon capture and use applications to produce polymers and so on. In longer term, I mean, we are seeing and forecasting also direct air carbon capture, storage and biological -- bioenergy carbon capture storage also. I mean in scenarios in our metrics, we have factored 2.5 million tonnes per year more in 2040 versus 2030 and another range of 2.55 million tonnes a year for 2050 comparing with 2040. Going to your question about the nature-based solutions, I mean, I'm going to underline this key principle for Repsol. First, reduce then offset. So Repsol is not relying on natural carbon sinks to reach its 2020, 2030 targets. I mean longer term, we may contemplate counting on that nature-based solutions through offsets and project development to meet decarbonization goals if in case of that state-of-the-art energy technologies are seen as nonsufficient to reach carbon neutrality in 2050. It seems to me that, that is my perception. I mean, it's not a fact. That technology is going to evolve. And as Luis explained before, we are -- year after year, we are increasing the intensity of our pathway to decarbonize the company because technology is going to help us. So it seems to me that, that is going to happen. But in case of not seeing this technological evolution, we estimate that in the long term, we could need to mitigate around 10 points of our carbon intensity in this reduction in 2050 coming or using natural carbon solutions to reach our commitment, our target, that is to decarbonize the whole carbon footprint of the company in 100% to get net 0 by 2050 in real terms. Thank you.

Thank you, Josu Jon. We have several questions regarding carbon prices. Peter Low, Redburn and Sasikanth Chilukuru at Morgan Stanley ask questioning for instance. What is our view on carbon price and the sustainability of free allowances in the EU? What will be the impact on Repsol portfolio? And how do we incorporate carbon prices into our planning scenarios?

Luis, you have introduced this question in your presentation. So please elaborate a bit more.

Okay? So European Union, we need to read the legislation and reach conclusions for that about carbon price and sustainability of free allowances. Now what is written in the European Union emission trading system for the period 2021 to 2030 is that till 2025, free allowances of those sectors that already have it, will not be touched. So will be constant. Now we are meeting some 10 million tonnes per year in our refining and petrochemical sites, which are subject to the European trading system. And we are getting free allowances for 7 out of the 10. Just to clarify, free allowance means that the competitiveness of the European industry is being protected from carbon leakage because outside Europe, they are not subject to this cost of carbon. So not touching the free allowances in 2025. From 2026 to 2030, there will be what they call a linear reduction factor of around 2.4% for the current system. Now the fit for 55 package says that it may be increasing to 4-point-something percent, linear reduction annually, all in all, the system and now a complicated benchmarking system needs to allocate this reduction to the different sectors. But for us, what we are trying to do and we will do, and this is one of the reasons why we are putting a higher internal carbon price is that if we mitigate our emissions, we will not pay more. Simply, we will not emit more. So this is our approach, and we will be doing that along this decade. And we have very -- we have a plan for '21 to '25, and we have factored in our carbon intensity pathway, also a new plan, '26 to 2030 of reductions of Scope 2 -- 1 and 2 emissions in our site. So now I mean that your question was a little bit beyond because now the fit for 55 package is speaking about the carbon border adjustment mechanism, which is a way of protecting the industry for carbon leakage. So there is a view that once carbon border adjustment mechanism is in place progressively, the free allowances should move to zero, and they are signaling to 2035 to the point in which free allowances could be zero. I have to clarify that the refining on petrochemicals will not be in the first wave of this type of carbon border adjustment mechanism is going to be for the sectors of steel, cement, aluminum and others, and we will not be there. So we will not be subject to these reductions. But we have a view that we need to be protected for carbon leakage. A carbon border adjustment mechanism if well design could protect the industry from that. But the way it's being formulated today will not provide sufficient protection and we believe that free allowances should be kept in a certain amount. I will explain that why? Because a European producer, say a refiner has to compete with our refinery abroad that when they sell product in Europe the will be subject to a cost of carbon, but for the rest of the products they are selling internationally, they will be competing without a carbon price. Same the European Union is not considering as of today that the exports from Europe to abroad should be credited and not being charged, and they are not considering that. So I believe that there is a long way to discuss, which are the best carbon border adjusted mechanism that we favor, and we see it's a good movement. It's going to be difficult under the WTO organization rules and so on to implement. But conceptually, we are okay. But it's too simplistic to say because we have a carbon border adjustment mechanism, then free allowance should be zero. Again, we will not be subject to that in that period for the time being, say no impact to 2025, from '26 to '30, our linear reduction of the allowances that we intend to mitigate and even eliminate from our emission reduction plans.

Thank you, Luis.

Sorry, to me, there was a question also on the planning scenario. As I commented, for us, the planning scenario, which is very important is to have the promotion of the low carbon investment. So the announcement of today about the higher internal carbon prices, is how we are factoring a promotion of the low-carbon investment into our planning scenarios and our investment allocation.

Thank you very much, Luis. Continuing with the emissions reduction, Matthew Lofting of JPMorgan is asking, what will be the impact on our carbon intensity indicator of [indiscernible] dual-track or as a rotation in renewable as well as the sale of the PM3 Malaysia asset.

You like to answer this question, Luis?

Yes, very, very quick answer because, of course, when we factor the renewable capacity in our carbon intensity indicator, we just factor our working interest. It's just our net participation in the project, not the gross participation in the project. So of course, we don't know how Mavi and the team will go on the dilution for creating value out of the projects. But what we have done this, for the time being, we have factored what we consider a quite conservative level of dilution, a high level of dilution in order not to, let's say, over rely on the capacity of renewables in our system. We are factoring something even below 50% participation. This does not mean anything about the strategy of the business. It's just a matter of being let's say, conservative on our estimates. With regards to Malaysia, it's very easy to say. If the impact of the disposal of Malaysia, if this happens, let's say, by the end of the year, it's going to be 6 points of reduction in our carbon intensity index, but I would like to highlight that the people and the operating teams in Malaysia of E&P, they've been working tremendously to reduce emissions of these assets since we bought it back in 2016. They have reduced the emissions scope 1 and 2 by more than 30% -- from 3-0 from the point we bought it until today. They have been even considering whether CO2 separation and reinjection could work in this asset. It cannot be made economically feasible because it's a mature assets and life of the assets, the concession ends in 2027. So there is no more we can do apart from taking, let's say, conscious decision about the level of development of the remaining reserves. And we've been managing that with our partners in a prudent way. And of course, it's also time for us to consider on a disposal if it's accretive for Repsol.

Thank you, Luis. So Ramon...

Well, let's have a much more traditional question from the sales side. Irene Himona at Societe Generale is asking that considering the new commodity environment scenario as well as the recovery in demand and the situation of refining margins. If Repsol now decided to exit the resilient phase of the plan of the '21, '25 strategic plan that was considered when Brent was 50 and Henry Hub 250?

Thank you, Irene. I mean talking about low carbon is also talking about financing. So it's an interesting question. I mean, you are right because our strategy -- strategic plan we presented in November. In the midst of the -- I can't remember the second or the third wave of the pandemic is self-finance at $50 per barrel Brent and 2.5 Henry Hub. So today, being prudent, you know that I'm always prudent. We are currently a more optimistic view, thanks to the positive evolution of the main macro indicators and also I am not going to unite our delivery during the year in P&L and in cash terms. Therefore, we have improved our outlook for the rest of the year, together with the CapEx and ambition in the low carbon business. So it's also true that looking forward, what we are seeing is more positive and remember that the strategic plan includes a clear capital allocation policy in case of having an extra cash as we are experiencing now. We will invest a part of this cash in profitable growth in our portfolio, basically in the development of new low carbon platforms in case of seeing profitable opportunities accelerating our plans to increasing our ambition. And additionally, eventually, we will improve the shareholders' distribution, always searching the most valuable choice for our shareholders. I mean, we have to combine a certain optimism with our prudent financial policy and in that sense, Antonio, maybe you can give us a little more color about it. I mean I'm not exiting the answer because I think that the 2 drivers of our extra cash, capital allocation are very clear, but you could elaborate a bit more.

Okay. I'll try Josu. Thank you. Well, regarding the resilience mode, the first thing to remember is that the current strategic plan differentiates in 2 periods. 2021 and 2022 of resilience. A period to recover the pre pandemic situation and metrics and the period from 2,023 to 2,025 of growth where most of the growth projects of the company occur. So far, it's true, as you said, that the outlook and then the cash generated has been better than expected. However, we still see some uncertainties related to the spread of the delta variant, supply chain constraints, some cost pressures. So we have to maintain our focus on efficiency on having a lean organization on cost reductions. And accordingly, we are still working under this resilience mode. Looking forward, as stated in the strategic plan, CapEx will grow in 2022 onwards. With a total CapEx of EUR 19 billion in the strategic period, and after investing EUR 2.9 billion in 2021, the CapEx per year is going to be higher from 2022. In fact, next year, it will be at around EUR 3.8 billion, EUR 3.9 billion, reaching pre-pandemic levels. And with this increased focus on the low carbon businesses in the renewables and the industrial division, accelerating our transformation process and in upstream, developing the [indiscernible] projects and taking advantage of the flexibility of unconventionals to increase production in a more favorable price scenario. And finally, as you said, according to the macro scenario and according to the cash generation in coming years, we will update our CapEx plans and our shareholder remuneration.

Thank you, Antonio. So I mean, I think that the Antonio explanation was very, very clear. We are seeing and capturing this extra cost. So we'll go on applying what we said in our strategic plan for this application of this extra cash. So we are increasing the CapEx in these low carbon platforms. We'll evaluate the room for new distribution of -- for our shareholders in the future. And all that, of course, combined with the prudent financial policy we need in a time or, as Antonio said, we have still some uncertainties.

Thank you, Josu. Coming back to refining [Foreign Language] are asking what are Repsol objectives for advanced biofuels, sustainable aviation fuels and synthetic fuels in terms of production, capacity, returns and technologies.

Juan, do you like to...

Yes. Thank you. Well, as you know, we have a target of producing 1.3 million tons of low-carbon fuel in 2025 and 2 million tonnes in 2030. Before going to these objectives, it's good to review the starting point. As of today, we are producing around 0.7 million tons of low-carbon fuels. And we are experiencing the last year or some, new developments. I mean, we have produced our first Biojet -- Coprocessed Biojet. And our first Advanced Coprocessed Biojet Petronor. We have also produced for the first time renewable hydrogen from biomethane this week. And we'll be producing renewable hydrogen from electrolysis next year in our demo pant. In Petronor. Looking to 2025, as I said, we have a 1.3 million target of low-carbon fuels. And we have a clear pipeline of projects. And with all that, obviously, uncertainty that they could have in some of them. I'm going to try to bridge that gap in terms of production, returns and technologies. One of the main projects that we have, as you know, is our C43 project or [Indiscernible] was plant in Cartagena. It will be producing around 250,000 tons of value wells. And when we decide to take the idea of this project, we were seeing a healthy return, I mean, above obviously the 2 digits. And since then, what has happened is that not only the market but also the market and many consultants, what are seeing is kind of a bottleneck in this type of production, what is driving up margins, right? So we feel comfortable in order to achieve this return. But apart from our Cartagena project, one of the aims of our strategy also is to profit from the assets that we already have. I think we -- this is very relevant for us is to extract value and to keep all of our refineries producing low carbon fuels. And in that sense, we have started engineers to this of producing biofuels into some of our units in Tarragona in [indiscernible] in Puertollano. And apart from that, we are analyzing the co-process of policy in the FCC of our raw materials in the FCC. All this probably will have an impact of 50,000 tonnes during the period until 2025, that will be at 250 tonnes in the Cartagena project. Also, as having said during this day, and Tomas Malango has reminded us, we have the objective to have 450 megawatts of renewable hydrogen coming from electrolysis and also from biomethane. And this will not take into account the capacity production, around 200,000 tonnes of equivalent of oil amounting in production, right? We are expecting also a double-digit return base on, obviously, the ability to profit from the European regulation and the ability of profit from the renewal or non biological renewal quota that has been proposed by the European Commission. This has happened in the past with a value for us. It will create a green premium for these type of fuels that will help them to achieve rational reasonable returns. And last but not least in this road map 2025, we have, as Rafael has mentioned, the ecoplanta, that will be able to produce from waste materials around 220,000 tonnes of methanol or we have the option also to switch to liquids in the [indiscernible] But at the end of the day, for stay will be around 60,000 tonnes of low carbon fuels that will help to bridge this gap between 0.7 million and 1.3 million between today and 2025. And again, with a recent conservative assumption on the premium, the methanol, this also investment is above the double-digit return. When we look at 2030, it's through that uncertainty is -- has a much bigger impact. And we can't be as precise as we are we in 2025. But that doesn't mean that we are not working and analyzing different options, right? Obviously, one of them, this [indiscernible] is that we will continue to deploy our renewable hydrogen assets into our business and our target will be in our own assets, 1 gigawatt that is the minimum amount required to cope with our objectives, and that will imply around an additional 230,000 tonnes of low carbon fuels. But apart from that, we are also analyzing different technologies in terms of biofuels -- low carbon fuels like fermentation of municipal solid waste in order to achieve advanced ethanol, gasification of the municipal solid waste that can create a syngas that can go to renewable hydrogen or into the [indiscernible] tubes to low carbon fuels and also pyrolysis in -- of oil in the FCC. So altogether and also the ambition to be prepared to this potential regulation of forcing or a quota of 0.7% of SAF in terms of synthetic fuels that provides an option also to produce or to invest in our e-fuels plant is what is going to help us to reach this 2 million tonne target. At the end of the day, we need to keep the flexibility, multi-technology approach and be able that to process whatever raw materials optimize the system and the returns. And obviously, in some of these technologies, profitability will require some regulatory and direct aid support as has been discussed during this day.

Okay. Thank you, Juan. I think that for the sake of time, we have time for one last question, and that is regarding renewable hydrogen, in particular, Jon Rigby at UBS and Jason Kenney of Santander asking, what is Repsol road map for the commercialization of renewable hydrogen? How can Repsol support demand growth in Iberia? And if we plan to sign partnerships to secure growth in volumes?

So taking account the presentation of Tomas, perhaps Tomas, you are the right person to answer these questions. Tomas, please go ahead.

Thank you for the question. Thank you, Josu Jon. Yes, for sure, Repsol will, as we have mentioned in the presentation, we will leverage our hydrogen platform based on our self consumption. We have 60% of the share of hydrogen in Spain and 5% of the share in Europe. Therefore, we have a footprint among all the value chain. So it's very clear that in Iberia, we can construct this platform and be a significant player in the European market. Despite of that, we also have plans to do some activities in third-party assets, as I mentioned also, in order to expand our leadership, very focused on industrial clients. We're talking about different industries, operating in with hydrogen, the fertilizers, steel, some chemical industries and so on. And on the other hand, we have the proposal to develop our megaprojects in HPV or JV structures, including some of the off-takers in our partnerships in order to create an expanding market. At this point, for instance, we have already signed MOUs with companies like Enagas, very focused on grid injection, also chemical companies like [Indiscernible] and steel companies like Sidenor, OEMs that are going to transform the vehicle for the direct use of hydrogen like [Estado] for the trains and some other ones. We are talking -- we are doing some conversations ongoing. And finally, some of the end users of the hydrogen, like they can be ASA, for instance, which is a provider of transportation. All in all, our project is very based on this collaboration relationships to increase our span of production. And finally, we also are, as I mentioned, also working on development stage with our remote plan. But keeping in mind that if you also saw a alternative that can enhance also the hydrogen consumption itself, so it will be a significant platform for the decarbonization of the road, the maritime and the air transportation and include significant amount of hydrogen.

Thank you, Tomas. Let me add that this -- my perception is hydrogen is going to fly in Europe. Spain is going to be the right country to be there. And Repsol has the ambition, the means, the integration in all the value chain in Spain to lead this hydrogen market in Spain. That is what we are presenting today in the framework of this strategy, and we are going to be one of the leaders of this business in Europe. We have the ambition, the team, the means and the right position to be there. Thank you, Tomas, again. And thank you, Ramon, for supporting all these questions. And thank you, all of you. Let me thank everybody who has joined us today for your attention. We have shared a lot of information along the afternoon. I expect that we have succeeded in explaining the profitable opportunities that support our accelerated ambitions in low carbon. Believe me that Mavi, Juan, Luis, Antonio and the rest of the team that has taken part today in this afternoon, Jose, Siridia, Carlos, Berta, Rafa, Tomas, Mikel, they all have been engaged in this effort to explain these profitable opportunities. And let me underline finally that industry is key to getting Repsol -- is key to getting Europe back on the path to prosperity and achieving a lower emissions future. A strong industrial sector, from my point of view, will also help ensure a transition that is both socially and geographically just. And at Repsol, we see all these challenges of the decarbonization as opportunities to evolve. I said before that we are growing, and we are accelerating the effort in the low carbon to make money because we see opportunities, we see a better future accelerating these platforms. And to preserve our competitiveness, we are transforming our industrial sites to multi-energy hubs. In this concept I expressed before, the refinery of the future, of the energy part of the future better said, capable of manufacturing products with our low zero or even why not a negative carbon footprint in the future. So with that, thanks to all the team and thank you all of you for your attention. Have a nice day, afternoon or evening.