TotalEnergies SE (TTE) Earnings Call Transcript & Summary

Good morning if you are joining us from the Americas. For the ones who are present today in London, we hope that you had a nice lunch. We are delighted to welcome you to TotalEnergies Strategy, Sustainability & Climate Investor Day 2023. We are today, as I was saying, in London. Last time, it was in 2019, a long time ago. Before detailing the program of the afternoon, I invite Ian from the security of the hotel to join me for the safety instructions. Thank you.

Good afternoon, ladies and gentlemen. My name is Ian. I'm the security manager. I'd just like to give you a quick safety briefing. In the event of a fire alarm -- there is nothing planned for today, so please try not to start anything -- in the event that the alarm sounds, we have 3 exits in here, 2 there that lead down to the lobby and 1 at the side that leads down to an external fire escape. When you get down during the fire alarm, yellow hi-vis marshals will be on hand to show you to the assembly point, which is on the pavement, opposite the front of the hotel. Please make your way onto the pavement as soon as possible. We'll look after you. If you get there and you discover that one of your party is not here, then please tell a fire marshal. They'll instruct a fire party to go looking for them, okay? Please, everybody get down there, yes? I get lost in this hotel. Any questions? Thank you very much. Enjoy your day.

Thank you, Ian. Appreciate it. The program for today will be structured in 2 sessions. First, we'll have Patrick and Helle will be presenting the strategy and climate updates and progresses. We'll have then after those 2 presentations, we'll have a Q&A sessions. Live session, you will be able to ask any question you want. And then we'll be moving to the second part of the afternoon, where Helle, Namita and Jean-Pierre will focus on the key elements of our sustainability model and all the various aspects from financial resilience to biodiversity or people. And then we'll have, again, a short Q&A. But for now, I invite Patrick on the floor for a sustainability moment.

Yes. First of all, welcome to you, everybody, before to make a sustainability moment. Now I didn't put -- okay. They do it for me. In TotalEnergies, we are -- we have decided to -- at every morning, when the first meeting, there is a safety moment. And since last year, we introduced another ritual, because corporations work with rituals if you want to change the culture. But every afternoon meeting, we begin with a sustainable moment. So I will do it myself because -- and by the way, to introduce today to you, it's an opportunity, our new program, which is called Sustainab’ALL, which is a program on which, which has been built from a bottom-up approach by -- during the year 2022 by our colleagues in the group, in the company. 27,000 colleagues worked on this program. So it's clearly a bottom-up approach. So the question we asked them at the beginning of last year was, what does it mean, the SDGs? What do they mean for us, for TotalEnergies? And the idea being to put in place some specific KPIs or thematics on which we want to work collectively in order to progress. But -- and then -- but linked to business. That means that embedding sustainable development goals into our strategy, our projects, our operation or businesses. At the end came 10 KPIs. I will not describe that to you. And it's continuing to be a bottom-up approach because each site, each subsidiary has to -- have to decide for themselves the target or goal, I would say, for '23 to '25 to progress on each of these thematics. And more importantly, in my eyes, they have to come back each year with a success story. So we'll make the collection of the success stories of sustainability within the company. And I hope that it will feed the next sustainability and climate report. And the idea is being to celebrate it, to introduce it, to go in deep in the culture and also, by the way, to have a cross-fertilization, because many ideas could come from one business, large corporations could give ideas to the other. So that's the Sustainab’ALL program. And of course, in the program, we speak about energy. And we want to be ourselves for our own operation at the forefront, consuming low-carbon energies, engaging our suppliers, innovating in low-carbon energies. It's about our people. It's about the natural resources that we should preserve. And it's about sharing value. It's exactly the program that we will, today, this afternoon, on which we'll come back to you. So again, we have a structure of meetings with investors we changed last year. In February, we celebrate, for the time being, we celebrate our results of the previous year, financial results, and we give you the financial objectives for the next year. So we've done that beginning of February. In March, because there is the Board involvement, we issue today our climate and sustainability report, which will be the base of the resolution to the general assembly of shareholders. We have committed since 2021, but each year, we'll report on the progress and we will also update our objectives year after year in order to be better on these sustainability and climate commitments. And so this is why we come today. We come today to report to you. Of course, the -- and it will be my presentation, all that is supported by the strategy of the company. The strategy of the company is fundamentally described to you deeply in September. So today, I will not come back again. We don't change the strategy of the company. We stay the course. And we make no U-turn. We know -- so you will not hear anything new. I think we are in an energy business which is a long-term business. And so when you have a strategy, if you want to deliver profitability, it has to be consistent for many years. You can adapt, but not fundamentally change. So we'll come back on what we are doing within TotalEnergies, which is building a multi-energy company, which we think is really, and 2022 has reinforced this conviction. So I will set the scene about the strategy, reminding you the fundamentals, which, of course, are the core of all the progress and achievements we do in terms of climate, in terms of people, in terms of sustainability. So this is the fundamental idea of this part. Then Helle will go deep -- will make the climate report and will update the targets. So you will see that we are -- but all that being validated by the Board, again, which worked a full day on all these topics last week. And then we'll have a Q&A, like you said. Don't worry, Jean-Pierre, Namita and Helle will not make 20 slides. It's 4 or 5 slides, just to zoom on some specific aspects which might be of interest for some of you. So the second part will be a little shorter. Having said that, I think we need to -- I will go into the presentation. So of course, our purpose, and I think it's important, is more energy, less emissions. The whole company is driven by the idea that we are an important player in that field, but our mission is to deliver -- to supply energy to as many people as possible. There are a lot -- the population in the world is growing. Level of -- they want -- they aspire, all of them, legitimately to a better way of life, so more energy. And this is what we observed for the last 20 years. We observed that year after year. So we need to provide more energy. Of course, and this is the whole challenge of the energy transition, we need to dramatically lower the emissions. So on both ways, on one side, to change the way in which we produce hydrocarbons. We can produce hydrocarbon with a much lower Scope 1 and 2, which is the primary responsibility of our company being involved in oil and gas, but also to contribute to the transition by investing in the new decarbonized energy system, which is the other pillar of our strategy. All that will be always more sustainable. And let's be clear, the ultimate objective is to continue to grow in order to develop our returns, to increase our returns and to increase our returns to shareholders. This strategy is driven by some demand fundamentals that you all know in the room. So this is, I think, just to remind the idea that the strategy of the company is not driven by supply. It's driven by demand. Demand, of course, of oil. There is still a growing demand for oil, even if at the same time, we see some acceleration of innovation to substitute oil use, like, of course, EVs in transportations or batteries more generally, but maybe tomorrow hydrogen, EV for sure. So vision is that the demand for the time being still grow, but could plateau, then decline. So we have to keep that in mind. And in order to manage our oil portfolio, keeping us well the optionality because the timing of all that is not very clear. One of the uncertainty in all this transition, energy transition, is the pace at which the demand of the various actual components of the energy world will move. The second part of the -- and of course, another point is that oil might be substituted also by low-carbon liquids like biofuels, already done partly, or e-fuels tomorrow. Then we have the natural gas, which was because electricity is at the core of the transition, and because renewables are intermittent, you need to have flexible generation capacities. Gas is one way to offer this necessary flexibility. And so we see from this perspective, back out coal and complement of intermittent renewables is a fundamental contribution, I would say, to this transition. Driving the growth for LNG. We are large players of LNG. We intend to continue to grow and develop that business because we see in many emerging countries -- with, of course, the challenges of the price, of LNG price, but we see there a transition going from coal to gas as being very pragmatic. Then, of course, there may be some alternative gases like biomethane or hydrogen in the future. The last part of -- and it's why Total became TotalEnergies, is the electricity, which is the third pillar of the strategy, which is -- and you will hear more and more us speaking about integrated power as we report on integrated power from next quarter. The demand is growing. Decarbonization is growing hand-in-hand with a higher demand for electricity. Renewables, of course, are one way to decarbonize this power generation. We should not forget electricity storage as well, which is part of the transition. And this is the third of the market that we want to address in our strategy. This slide is easy to do and to introduce a whole speech this afternoon because, in fact, I hear some voices from investors: "Yes, we are investing in green, but green is less profitable. And you do it for not the right reason." No, we do it for a good reason. And I think a very good reason, which is to fundamentally prepare the future of our company, to create the future growth -- revenue growth of the company. What we have demonstrated in 2022, in the last years on this slide is, on one side, we have been, in 2022, the most profitable major. We have now the figures of all our peers. In terms -- it's true in terms of ROACE, at 28.2%, we are at the top of the leader board. And it's also true, which is more important for our investors, in net cash flow per share growth. We have -- and so which means, by the way, that TotalEnergies is a company, which, when we have higher energy price, is reactive to the price. We don't have always that reputation, but part of what we've done in the -- since 2015, which is to lower the breakeven to less than $25 per barrel. Of course, when price is high, it's good. We benefit much more of it. And at the same time, this is the green part of the slide, we have invested $15 billion in the last 6 years in low-carbon energies. Last year alone, $4 billion. So -- and this year $5 billion. So now we are at the pace at which we will maintain for the next years. We'll see in the presentation. And we have in our portfolio grow our renewable capacity up to 17 gigawatts of growth capacity, which is, by far, the largest portfolio within a major company. So I think my message is, yes, it's absolutely achievable and we'll achieve it. It's our commitment to continue to deliver profits and high profits and to be profitable and the most profitable while also, at the same time, preparing the future and investing in these new and low-carbon energies, low-carbon electricity, low-carbon molecules. So of course, the best demonstration will be for cash allocation to you, investors. So before to speak about climate and low-carbon energies, that's the reality -- the reality check. And again, I'm just repeating that what we've announced to you in September and February, and this scheme will come back. So the priority is given by the Board to dividend, to a sustainable ordinary dividend through cycles. We've never cut the dividend for last 35 years. So we'll continue. It was a commitment when I became CEO. I stick to the commitment, including in 2020. And we will support the dividend increase by share buybacks when we do it, but more fundamentally, by the underlying cash flow growth of our revenues. And we are at a pace of an additional $1 billion per year. And so the Board will then decide how much of the $1 billion will allocate to dividend -- ordinary dividend, in order to be -- to have again a sustainable ordinary dividend. For '23, we have announced an increase of more than 7% of interim dividends. Then we have the CapEx, we support our multi-energy strategy, both on hydrocarbon on one side, on low-carbon energies. I will come back in a specific slide on this $14 billion to $18 billion. For '23, $16 billion to $18 billion, and $5 billion, low-carbon energies. The balance sheet, that's the good news of 2022. Now my CFO can rest, but he does not rest, I can tell you. We keep him awake. We have, of course, the target has been always said that through cycles, we want to remain a credit, grade A credit rating. We have today set a new target, to target a AA credit rating. And we have, in fact, all the metrics. When it's rating agencies to decide, but we have all the metrics. And our balance sheet will continue to strengthen it. Then we might have some surplus cash flows, like it was the case in '22, which will be the case in '23, when we have allocated 1 and 2. And what do we do with it? We do it through -- we'll share it through buybacks, or like we've done in '22, through special dividend, in case of very high prices that we experienced last year. For '23, our Board has decided -- Board, which is going step by step, we have decided to buy back $4 billion for the first half of '23, keeping the pace, I would say, of the second half of '22 despite the fact that the price environment is lower, but we have the capacity to maintain. And we'll see if we can, in the second half of the year, according to the environment, what we have to be done. At the end, the main commitment we've taken in Total, and which proves the profitability, is that we will, we have a cash payout through the cycle of 35%, 40% standard, could be higher, but it's 35%, 40%, which has been a step forward for our shareholders. And last year, we delivered 37%. So this strategy is designed to, again, build this multi-energy company. And this chart explains you what we want to achieve in terms of production, in terms of sales. On the production side, we are, again, growing. We are targeting to grow our production capacities, production deliveries, by 4% per year, mainly coming from 2, I would say, molecule -- from 2 energies, natural gas, LNG and the electricity part. On the oil side, which represents today more or less 55% of our production, we will maintain this share, could grow, I would say, marginally, but maintaining. Again, don't forget that we have a natural decline of around 4% in our portfolio. So we need to add new field -- new greenfields to just to maintain. It's a challenge to do it. If we have opportunities, we could do more, but that's the target. On the natural gas, more aggressive, in particular, LNG and growing the share of natural gas in our production from keeping it 40%, but in a larger company, in fact. And then we have the third pillar, which will be -- which will grow -- we had 5% of our production. Next year should be around 10% and growing to 20% by the end of the decade. On the sales, we have, I would say, a different pattern. Why? Because the answer to the uncertainty of the oil decline for us is more integration between Upstream and Downstream. So today, we are a company. We sell and we refine more than we produce. And so we have decided that we speak about integrated at the core of the model. So let's do it. Let's do it in order not to be -- to have another -- to sell more than what we produce or to refine more. And this is -- the idea is to answer to a potential evolution of the market, because at the same time, part of the sales are for transportation. If you are -- and I will come back to that in the presentation -- you have more EVs, you will need less petroleum products. So the petroleum products, there is an alignment, so it will go down to 30%. Gas, we have a position there as a core position. We're on the top of what we produce. We can market more. We can leverage our global footprint. So we target 50% of our sales. And electricity will be consistent. The idea, again, on integrated power, it's integrated the right word, to have as much as production as sales and not to be -- so to do it, as we said. So that's the fundamental target we have. On the top of it, you can have the low-carbon molecules, which could -- which will grow. For this decade, we see that as more starting decade, because the question is to develop this market for molecules, which generally are more expensive than their competitors. So we need to find some markets. And also the limitation is coming. I will come back on it sometimes, on the feedstock to be able to produce these molecules. So this strategy is supported for the decade with a capital investment. I don't know if policy is the right word, but policy. It's $14 billion, $18 billion through cycle. What does it mean? It's $14 billion, $16 billion at $50; it's $16 billion, $18 billion at, I would say $80, and then we navigate. It's a disciplined one. And what you see on this chart is that, in fact, we can see that we have 1/3 going to low-carbon energies, as an average. More on the integrated power, but the pace we have reached last year at $4 billion per year is for us the right pace to go -- to build this integrated power business. So low-carbon molecules could grow a little. Then we have gas, which represent 20%, 25% of our CapEx; and the oil, the remaining 45%, more or less. And we have identified for those who are asking us generally the questions, but 30% of our CapEx are going to new projects in oil and gas. It's including exploration, but it's greenfield projects. It's new LNG plants. So it's 33% on low-carbon energy projects, 30% of new hydrocarbon projects, and the remaining part, which is more or less 35%, on maintenance, maintenance of our existing assets, because we have to maintain them in refining, in marketing, in Upstream as well. And it requires some capital. So that's, I think, an important slide. And you see that it's, of course, aligned with the strategy to grow -- to increase these low-carbon energies in the portfolio, but also keeping at the same time, optionalities in order to be able to answer to the demand on our oil and gas businesses and aggressively on LNG. A word about Upstream oil. Upstream oil in our strategy is, there is 2 motto, I would say. One is low cost, the other is low emissions. So when we invest in new projects, we have some criteria, which will be reminded to you in other slide, which are less than $20 per barrel and less than 19 kilograms per barrel, because we have an algorithm, when we want each new project to be lower than the average of the company, and the company is lowering. It was 20, now it's 19. So the new target is less than 19. So we apply -- we apply these criteria to any new investments, but we find new investments, very good ones. We have a large portfolio of new projects on this one with respect this criteria. This criteria, of course, are there in order on one side to maintain the cash engine of the company, on the other side, not -- to be able to say, "No, there is absolutely no stranded asset in this portfolio." I will show you why I said that, but we have some important projects in construction in Brazil, 2 projects to FID this year in Brazil, in Angola. So we have a portfolio. You have observed that in the last month since we met in February, we have announced a new oil, low-cost oil acquisition in Abu Dhabi. Quite happy to have access to this new concession. It's $4 per barrel of access cost. It's less than $5 production cost. All that is very good. It's long term. And then we have also options in our portfolio coming, and that's a good news for TotalEnergies, coming from exploration. So cost of access is quite low. The first good news I can confirm is on Suriname. We had a program of 3 appraisal wells. The first 2 wells are positive. So I think we are probably not far to be able to move to a very near -- to move to an oil development in Suriname. And then we have Namibia, where I explained you in February, that we'll spend $300 million this year for 3 wells, 3 DSTs. So we have all the static and dynamic data to tell the story and to be able to see, with the idea that if it's as good as my explorers are telling me, then we could move quickly. Time to market is of essence. We have -- I have in mind the model of Block 17. When I joined the company, I was lucky, I joined it in Block 17. We discovered in '97. We put into production in... [Technical Difficulty] So sorry for the interruption. There was an issue with the sound here in the room in London. So no, technical problem is done. So it's okay. So I continue. I do it again at the stage of the presentation where I think we have been stopped. I was just demonstrating from this slide that the resilience of the old portfolio of TotalEnergies, which we position again with a low breakeven and the low cost, less than $20 per barrel. And we have evaluated our portfolio compared -- by comparing it to what could be the demand for oil, according to the various scenario of IEA, either the NZE scenario at 1.5, the APS at 1.7 or the STEPS at 2.5. And you can see that in the cost merit curve of the oil production, our portfolio is positioned in the top -- on the first 50 million barrels of oil per day. So it's clearly safe, and in particular, it is the case because we benefit from quite a number of long plateau assets in our portfolio in the Middle East. I often said that the last drop of oil will be produced there. So positioning the company in these countries is a way to protect the portfolio and to be able to continue to maintain the cash engine of this portfolio. On the oil -- last part of the strategy is the oil Downstream integration that I mentioned in the vision we share. Again, we want to have -- and this is not because of Scope 3, and there are more fundamentals behind it. The fundamentals is not Scope 3. Scope 3 is the result of it. The fundamentals, again, all that is driven by the market. The analysis is that oil Downstream is quite exposed to Europe. Europe is, for us, an opportunity, because we are at the forefront of the green deal and the transition, but it's also a constraint. And you have refineries in Europe, if you wait for the last minute to transform them, I can tell you it's a lot of social impact. It's not the right way. So we need to anticipate the evolution of the demand in Europe. We strongly believe that Europe will do what they have announced in terms of transitioning oil energy. And I think it's even reinforced by this war with Russia. So we need to prepare, to prepare, to prepare in refining by transforming one after one, oil refineries and bio refineries. We have done it by -- with 2. We will have to do it for others. So diminishing our refining exposure to oil products is a must. Otherwise, we'll not be ready. And by the way, this is, I would say, the constraint part. There is the positive part, which is the opportunities part. Because we transform, we are able now to be the leader -- among the leaders of the sustainable aviation fuel businesses. So it's another way to look at it. There is a negative part; there is a positive part. So in Grandpuits, and of course, the conditions to be a leader is to find the feedstock, it's to find feedstock. So we are becoming a good expert to find waste and either in -- different type of waste in order to be able to convert them in biofuels, but that's an opportunity. And we do the same -- and this is an explanation of what we just announced -- on European retail. It's very clear to us that our retail network will not be very useful when you go to EVs. The EV customers will charge its cars either at home or at the office, like you do with your iPhone. So we think that 70% of the market will be there. So the situation with a network offering charging points is not very obvious. It works very well on highways and where people are making long drives. But on short drives in cities, it's not true. And so we are -- we have to think about it. And that means that the best way is that this network has to be transformed, as you would say, like other, my peers say, more about thinking about shops, network of shops, network of retail stations. We took the decision, but we are not experts, in making a network of shops. To be honest, we are good in energy. I'm ready to look to diversification in energy, not in selling shops, bread or hot dogs or I don't know what other things. It's not our business. And so we had to think about that. So the idea is to partner with people who knows about it. We have announced that we will partner with Couche-Tard in Belgium and Luxembourg, where we have a large market share. But again, the concept is to have a network of shops with some gasoline pumps and not some retail of -- network -- a retail station with a shop -- an annex in a shop. It's reversing the concept. These guys have a lot of experience. They have demonstrated it. So we have said yes for this partnership we are looking for. They propose to acquire our business in Germany and Netherlands, where we have a limited market share and where -- because, by the way, the valuation was good -- we decided that it was part of the transition that we will do. Again, in Europe, there will be an accelerated transition. So there is, of course, in that it's a constraint on our oil product network. It's an opportunity because we, on the same time, with our marketing division, we accelerate to take positions on the EV charging where it makes sense. Either again, it makes sense for us in 2 segments. One of them is highways, motorways, where today, in France, we have taken 40% of the market share of all the motorways of France, to acquire the concession. So it's done. We are building that, high charging points, because we see the business there. And we will do it as well more on the B2B segment. We think that there is in cities, on electric hubs, EV hubs, a market for taxis, for, I would say, professionals who want to charge during the day who are using their cars. So we'll develop some specific EV charging hub. So it's a different approach, but we are willing to -- on which we want to move. We'll also develop for trucks some pan-European network dedicated to trucks, like we have today, one for oil -- for diesel, which is called AS24, which is going from Poland to Portugal. We'll develop one for EV trucks and another one will be announced this last month with Air Liquide for hydrogen, should hydrogen become one of the fuels for heavy duty. So that's, I would say, what we are looking through on this slide, at the end, integration of our oil business. Again, we'll be stronger by being integrated in case of evolution of the demand and supply. That's a strategic view. And taking opportunities of this change in transportation businesses, but also accepting, to anticipate the evolution of the demand during these next 10 years. LNG, will not repeat to you what you know very well about TotalEnergies. We are the #3 in the world. We are quite -- we have grown a lot. We were at less than 20 million tons in 2015. Today, last year, we sold 48 million tons. We have some growth in front of us coming from Qatar, where we have acquired these 2 positions from the U.S. PNG, some news came in the last month as we have agreed with all the -- with Exxon and Santos to launch the integrated feed with an optimized scheme. We have worked strongly with them. We are very in line. It's optimized in the sense of cost as we -- it's also low-carbon project, because on the Upstream, we will reinject in the reservoir, the CO2. And in the Downstream, we have selected an electrical-driven train scheme. We have small train for 4x 1 million tons per year. And we have also integrated that between PNG and Papua in order to optimize the capacities as Papua LNG will have access to 2 million tons of capacity of PNG. So it's optimized. It's very well located. So everything now is green to go to FID, end of the year, beginning of next year, probably. And on Mozambique, you know that we are working in order to see -- to check if conditions are there to restart. Security, as I told you in February, I visit the site, is today acceptable. Now we are making a review from an expert on the human rights part. We have some feedback. One of the ideas is that the Mozambique LNG project must be involved right from today, we have already started, but in a larger way, in sharing the prosperity that will come when the production will come in 5 years, but we must engage with all the population. We have already started with 4,000 people in which we bring some, I would say, revenues, but we should do it in a larger way in the region in order to share the prosperity with them now and not to wait, revenues from gas, in order to have supporters, allies, in this Mozambique part. So I think this is a good lesson that we draw from the reports. We will put into action in the coming months. We'll come back on it. And then the last condition in Mozambique is that our contractors stick to the EPC contracts and not to inflate the cost. Otherwise, we can wait longer. Integrated power is the third pillar of what I described: Oil, LNG, integrated power. So you will get the reserves next month of April. And so why integrated -- integrated is an important word, because it's renewable. Of course, we need to have production capacities. And the production will be renewables, but renewables are also intermittent. So we need to have flexible generation as well to produce it from CCGTs. We have some objectives that we set to ourselves by 2030. This is consistent with the idea that this business will represent 15%, 20% of the energy produced and sold in the company. In fact, we need to reach this level. We are on this path. Storage, of course, to manage the intermittency, storage is going also with trading, because we know that in this business, electricity is a volatile commodity, hourly one, daily one. So we can optimize all that, but we need to have the assets to optimize. Traders do nothing if they don't have the assets to manage, I would say, the exposure of the producing capacity to the market. So that's the idea. And then we have customers. More or less the idea behind, again, integration. We don't have to have more customers than producing capacities because otherwise, we are exposed to spot markets and that's not very profitable, like always. This business has to be designed and to deliver ROACE above 10%. So you will be able to see quarter after quarter if we are there. My view is that maybe we'll have -- we'll be higher than that in the first quarter from '23. So we will demonstrate to you that you can develop this business. It's for Stephane, who is in the room. But I know the results of the first 2 months. So it's not too much a big challenge for him. No, but we want really to demonstrate that, yes, this can be again a business which makes sense in the portfolio of the company. And if we are able to deliver such ROACE being yet in a growing mode and building the business, when we'll stabilize all that being -- reaching our objective, I think it could be even better. So that's what we are willing to deliver to our shareholders. I spoke about low-carbon energy, so the low-carbon molecules. Biofuels, I mentioned that we have the bio refineries conversion, well positioned to -- in Europe, in particular. Biogas, you have noticed that we made some steps. We are doing local steps, not billion steps, 100 million steps, in France, in the U.S., in Poland, because we strongly believe that if you want to be good in this business, it's access to feedstock. Access to -- and permitting. Access to feedstock is understanding very well the local ecosystem in terms of farming, ecosystem or waste ecosystem. And so you don't transfer that from one country to the other one. It's more complex. But the technology, it's not rocket science. And so we are willing to develop the business, but by making acquisition, local acquisition one by one. We acquired the #1 in France. Now we have acquired the #1 in Poland and we'll continue to do it like that. And then biopolymers, recycling is important in our circular economy, for polymers, for the business on which our chemical division invests. A word about CCS, carbon, capture and storage. We are targeting 10 million tons per year by 2030. It's for our emissions. It's also for emissions of our customers. So we want to develop that as well as a service. Of course, Europe is at the core of our, I would say, our strategy. Why? Because we have a position in North Sea. It's linked to that, because Europe, again, with the green deal, had to develop the CCS. There is a news which came this week or last week, an important news in the Net-Zero Industry Act, there is a target of 50 million tons per year of CCS. Each producer of oil and gas having its share of the burden. So for TotalEnergies, represents 3% or 4%, because we are not so big producer in the EU. We produce now in the U.K., but it's not in the EU. So we produce today in the Netherlands. But it's -- for me, the signal is important, but it's a recognition that this CCS is necessary to go to the net zero, the western debate. So we have some projects. So one project in Norway, one in Denmark. We just acquired the license. We have a large, of course, presence there. One in Aramis, in Netherlands, together with Shell, where we share infrastructure; and one in the U.K. We are looking as well to more CCS, but more linked to our assets, I would say, which could offer capacities to others, but the fundamental strategy is more linked to assets. In the U.S., it's linked to Cameron LNG, where we have a potential CO2 storage right next to the plant. So quite easy when we will expand. On Qatar, developed by QatarEnergy. And in Asia, we have just took some license with INPEX and Woodside to create a storage around Ichthys to store the CO2. And PNG, I described it. So that's our deployment, step after step, in CCS. So I conclude this presentation again by telling you that, yes, it's possible to combine, to be profitable and to invest in a large way for the future. This is what we do. Today, in fact, we have a balanced strategy in our multi-energy strategy. On one side, we continue because it's our mission to deliver and to deliver in a large way, the, what we call the System A of -- which is today's energy, it's oil and gas fundamentally, maintaining oil production, developing optionalities again and for the future, according to the evolution of the demand. We'll see at what pace the transition will take place. Integrating our business in order to be safe from the Downstream point of view. LNG is, and we still believe gas is part of the transition. We continue to be aggressive in LNG. And at the same time, we built -- contribute to the building of the System B, which is a low-carbon energy system, we all need. By integrated power, I just described it to you what we want to do. The idea is to capture value from the volatility in this market by leveraging our global footprint, our balance sheet, our project management capacities. And on the low-carbon molecules, for this decade, we want to position ourselves in this potentially high market and attractive high-value and high market. But keeping our pace of development with the demand, I mean trying to match what we see as a demand. There are obvious markets where there is a good demand already today, like biogas, like sustainable aviation fuels. There are others which need to be developed and on which we will adapt the pace of our investments to what we want to do. I didn't say a word on hydrogen and I know that some of you are interested. It's not because we don't like it. It's just because I missed it in this busy slide, on the right -- left bottom corner. In fact, TotalEnergies, we have a short of 500,000 tons in Europe in our refining system. Europe is offering a good idea in their complex regulation to valorize green hydrogen in refineries. And so we are looking primarily to do that, which is because we -- not only we can use green hydrogen as a hydrogen, as a feedstock, as we do it today to replace the gray hydrogen, but we can also displace some hydrogen which is produced today from reformers and crackers, which could be replaced by green hydrogen, become a fuel instead of natural gas. So less emissions and more revenues. So there is 500,000 tons, which is sizable. So we look to see how we can monetize and use this short in order to develop some projects Upstream. And of course, as many companies, we are looking today to the U.S. to see how we could develop 1 or 2 projects with the benefit of the fiscal incentive of the IRA in the U.S. So that's, I would say, for me, what I wanted to tell you about our model, I think, to set the scene. And so Helle will explain you how do you translate all that in greenhouse gas emissions and the target we set to ourselves. Thank you.

Thanks, Patrick, and hello, everyone. Yes. So a follow-on to Patrick's summary of our strategy. I will give you an update on our climate road map, showing the progress we make on less emissions. And the takeaway from my charts is actually going to be that we are indeed transforming into a multi-energy company. You can see that also from our climate realizations. And at the same time, our efforts to produce hydrocarbons in a much more responsible way are also paying off for sure. So first, a good summary chart that Patrick preannounced on both the actuals for our emissions in 2022 and the update on our targets. All the new stuff is in red. And for memory, our reference here is 2015, except for methane, where we use 2020 as all the countries from the Glasgow methane pledge. Two reasons really why we have updated our targets. First thing, we promised last year to all of you, our investors, that we would quantify milestones for 2025 across the table. So we've done that. And the second reason goes back to what Patrick just said, the pace of evolution of our transformation and our portfolio is quicker than what we had in mind a couple of years ago. So it only seemed fair to then update some of these targets. Let me start with our direct emissions from our operated activities, so Scope 1 and 2 and methane. Starting with Scope 1 and 2. You can see here that our Scope 1 and 2 emissions for '22 were 40 million tons. That's a 13% reduction versus 2015. But bear in mind, of course, that in '15, we did not have all the gas-fired power plants that we have added to our portfolio since then because of our strategy. So we count them in, of course. But I'll show you a little later that if we just carve out oil and gas reduction between today and '15 is much higher. So we've improved much more on oil and gas assets only. We've kept our target for 2030 unchanged from last year. So more -- 40% or more reduction versus '15 net. And we showed you last year, and I'll come back to that as well, that this is well calibrated versus all the external benchmarks that are relevant for our direct emissions. On the other hand, you can see that we've changed 2025, so moving it from less than 40 million to 38 million tons. The reason for that is, if you remember, we announced an energy efficiency program back in September of $1 billion over '23 and '24. During the bottom-up exercise, we found that the expectation from that program is that we will save energy, we'll save money, but we will also save CO2. And the order of magnitude is 2 million tons. So we have essentially lowered '25 by those 2 million. It's a question of accountability internally and then also towards you as our investors. On methane, we are executing our road maps towards 0 methane, and you see the results here for 2022. I just want to remind you that when we have a target of reducing methane by 50%, '25, and 80% in 2030, we go way beyond the 150 countries that have now signed up for the methane pledge, they have signed up for minus 30 in 2030. Of course, our industry is one of the contributors to methane emissions, so it's only fair that we should do more than average, but we are way, way above the country pledges here. So continuing to execute on methane. And then on indirect emissions, the emissions from our energy products when they are used by our customers, so the famous Scope 3 category 11. We have essentially 3 targets, 3 sets of targets. The first one is life cycle carbon intensity of our sales. And we've reduced that by 12% in 2022 versus '15 still. And given that result, we have decided to be more aggressive for the years '25 and 2030, as you can see. So we've upgraded or strengthened the carbon intensity targets above 10% reduction to about 15% reduction in '25 and from above 20% to above 25% in 2030. So it may look easy on paper. It's just a PowerPoint. But I can tell you that reaching minus 25 for 2030 means that we will have to continue to execute properly our transformation strategy. Otherwise, we will not get there. But be assured that we will do it. So that's carbon intensity, first indicator. Second one is worldwide Scope 3 for our oil sales. That's a new indicator, if you remember, that we came out with last year. You have the actuals for 2022. So that's 254 million tons of CO2 Scope 3 oil. And here again, we have decided to strengthen the objectives going forward. So we've added a new objective for '25, which is effectively moving up the objective we have for 2030. So we've moved that up by 5 years. And the new target for 2030 is minus 40%, Scope 3 oil worldwide. Pretty clear, but also stringent targets. The last indicator is Scope 3 worldwide for all our energy products. Actual 389 million tons for 2022. For this indicator, we are sticking to what we told you earlier. It's not going to go down because oil will go down, as I just described. But at the same time, our gas sales are going to go up. So we stick to the ceiling, which is we will not go above 400 million tons. And I'll come back and give you a little more color on that a little later. So that's for the overall targets and the new road map. If I now compare that with some of the external benchmarks. What I want to convey is the message is that on Scope 1 and 2 and also on the carbon intensity indicator, we're very much in line with the IEA scenarios that go below 2 degree. So to the left, we have plotted the trajectory for our direct Scope 1 and 2 emissions from operated facilities. We've plotted our trajectory against the 3 scenarios that Patrick already commented from the IEA, STEPS leading to 2.5 degree, APS leading to 1.7 and net zero emissions leading to 1.5. And those are the latest scenarios from the end of 2022. And what you can see is that our targets are very much aligned with the net zero emission scenario, which is not new because we already showed that to you last year. But here is a graph, I think, that illustrates pretty well. And then to the right, the carbon intensity -- life cycle carbon intensity of our sales, same kind of graph. And what you can see is that with the new targets that I just commented, minus 15% and minus 25%, our targets are very much aligned on the APS scenario, so the 1.7 scenario from the IEA. Just want to remind everyone that when we do these benchmarks, it's relevant because the world's emissions, as they appear in these scenarios or in other scenarios, is the sum of the Scope 1 emissions of all the countries, right? You remember that, I think. Another important chart. What do other outside parties, third parties, say about our climate strategy? Are we up to the challenge? We've just referenced a couple of these evaluations here. You'll find more in the full report, of course. I'm happy to share with you that for the second year, Transition Pathway Initiative has reaffirmed that our long-term emission reduction targets, on reading the chart, are ambitious enough to reach net zero by 2050 and to align with their own calculations for the 1.5 benchmark. So we are 1 out of 6 companies, and they analyzed close to 600 companies, we're 1 of the 6 that get this highest score, which is 4 stars. Another new benchmark, and I think there's somebody from ISS in the room, but ISS has its own ESG model, a proprietary model, called the Net Zero Alignment Model, that assesses companies' greenhouse gas disclosures, intermediate targets, net zero targets for 2050 and decarbonization strategies. And we're 1 of the 3 companies, oil and gas companies, that received a Net Zero Overall Alignment status from ISS. So our status is aligning and we're happy for that, of course. To the right, a couple of other benchmarks that just show that what we do on our own emissions, back to Patrick's responsible hydrocarbon theme, what we do is very much in line with the expectations of society. So Net ZE, I just commented, it's also in line with the 2030 reductions of Europe's green deal, Fit for 55. And we showed you last year through 2 external reports that it's also aligned with the trajectories of those countries that have committed to net zero by 2050. So we do believe that what we do on our direct emissions is well calibrated, and of course, a lot of work. Give you a little more color on all this, starting with the Scope 1 for our oil and gas assets. As I said earlier, when we compare ourselves to 2015, we have today these gas-fired power plants that we didn't have in the portfolio back then. So if I take them out and only look at oil and gas, our reduction in 2022 was minus 29% versus 2015, which is really a remarkable result. And on top of that, the 2 million tons that we expect from our energy efficiency programs are largely going to be derived from oil and gas assets. So our energy efficiency programs will continue to accelerate the decline of our emissions from Scope 1 and 2 on oil and gas. You have a couple of examples of that to the right. And as you can see, the examples are indeed from E&P on one side and from Refining & Chemicals on the other side. Overall, I think we shared that with you in September, but the payback of this investment of $1 billion is going to be less than 4 years. We'll save money, as I said. And if you look at the cost of CO2 abatement, it means that we'll be paying $50 per tons of CO2 avoided, which is half the cost of the European ETS. So it's really a good investment on all metrics. Back to the full scope of our 1 and 2 emissions, so including the gas-fired power plants, the CCGTs in blue, because of course, we sign up for all the assets we have. The chart here reminds you of the levers that we are going to use to get to the minus 4% or more by 2030. And I guess the message of the chart is really that most of the work is going to come from self-help. So of course, there'll be some portfolio changes, but you can see that in red, it's not going to be a big contributor. And we do count in nature-based carbon sinks for 5 million to 10 million tons also, but it's not the biggest contributor either. It's really our own hard work that will do the bulk of the work to get there. Again, 2 examples. You may remember the Go Green program that we announced a couple of years ago already, which means that by the middle of this decade, we will power our industrial assets in Europe and the U.S. with our own renewable power. So Go Green with our own molecules, and that's going to save us more than 2 million tons. And then to the right, a kind of landmark project embedded into the transformation of our platform in Grandpuits, that's going to be a biorefinery. But embedded into that, there is a solution, actually various solutions, to produce both renewable hydrogen and low-carbon hydrogen. And we do that in conjunction with our partner, Air Liquide, and that's also going to be just 1 example of how we're going to reduce emissions in Refining & Chemicals, even within an oil-free platform like Grandpuits is going to be. So then, of course, I come to methane emissions, and Patrick stressed that we want to grow in natural gas. It's very important, therefore, that we stay at the forefront of the battle against methane emissions. You hear us talk about that, I think, at each and every meeting. It's absolutely critical. Again, a reminder of our achievements in 2022. Also, remember that we are having a gold status with the OGMP 2.0, which is a framework from the UN to monitor, measure and report methane emissions. We want to continue to show leadership and stewardship. Remember the targets I just commented for '25 and 2030. And then as an important milestone on this road map, last year, we launched a worldwide campaign to not just estimate but actually measure for true, the methane emissions from our operated sites all over the world, which, again, I think, is really kind of a landmark endeavor from us as an oil and gas company. And I have a little video that I'm going to launch now to show you exactly how we did that actual measurements. Can we have the video, please? [Presentation]

Thank you. And so the next step on that and on AUSEA and these real side-by-side measurements is, of course, so that we're going to share the technology with our partners on all our non-operated assets so that we play the role we want to play in the industry and play the stewardship role and get other people to join in on lowering emissions from methane. I repeat that the only acceptable goal is really to aim for zero emissions when it comes to methane. Next chart here is just, again, a repetition on our road map for Scope 3 for oil between now and 2030. So the new target is minus 30 in 2025, minus 40 in 2040. Really, as Patrick said, the reason why we are able to come up with this target is what you heard on our strategy. And so the first reason is economic integration, aligning what we produce, what we refine and what we sell when it comes to oil, and therefore, eliminating the oil sales that we do today that have lower cash flow impact because it's third-party purchases that we resell. You heard us explain that several times in the past. And the second reason is that we do have a big market share in Europe where the markets are evolving fast, as Patrick said. And therefore, for us, it means transforming our Downstream in Europe and be on top of those evolutions. I won't elaborate again, but that's the fundamental reason. And because of that strategy, we can come up with these targets. On worldwide Scope 3 oil, I think it's fair to say that we really stand out with these targets amongst our peers. The flip side, as Patrick also said, of the constraints that may be in Europe are the opportunities. And Patrick already commented some of the elements on this chart. But as we reduce oil sales in Europe, we also speed up investments in the new infrastructure to promote the new mobility solutions for our customers. We're going to spend $1 billion equity in new infrastructure projects for mobility over the next 5 years in Europe, which after debt financing means that we enable more than 2 billion low-carbon infrastructures. Chart here focuses on e-mobility for passenger cars and hydrogen mobility for trucks. Again, Patrick commented most of it, but we are indeed going to equip highway service stations with fast-charging points. We will have dedicated hubs. And we have 2 ventures when it comes to hydrogen-based transport for trucks. We're very proud of the 40% share we got of the fast charge point auctions -- tenders in France on the highways last year. 40% is way above our market share in service stations on the highways. And we spend a lot of time with our people from the marketing and services branch to calibrate how we would answer those tenders. And we are satisfied with the outcome, which puts us as a clear #1 in that market, which is what we wanted to be. Moving now on to Scope 3 from gas, which is essentially the delta between the global Scope 3 number and the oil Scope 3 number. There's a 4 million that is linked to biofuels, but other on that, the rest is gas. So here again, as you heard from Patrick, we want to grow in gas. And because we're growing, Scope 3 from our gas-related sales will not go down. It's actually going to go up. In 2022, we're talking about 130 million tons of CO2. And we stand by the fact that those Scope 3 emissions will go up because of the positive role we see for gas in the transition, and you've heard us say that often. Selling gas to customers that would otherwise use coal or fuel oil is a net positive for the planet. We told you last year that 99% of our LNG customers are in countries that have a net zero 50 strategy and road map. And the reason why they buy LNG from us is because they back out coal or they back out fuel oil in their energy systems. And that's good news, of course, since natural gas emits half the emissions of coal. So for the first time this year, we've tried to quantify what is this mitigation impact of natural gas on the global emissions. So we've done a comprehensive work, customer by customer, country by country, to try and assess how much coal is displaced, meaning how many emission reductions do we enable when we sell gas, when we sell LNG, compared to a situation where the customer would otherwise use coal or sometimes fuel oil. And that's the table that you see to the right, and you'll be able to read all the details in the report, but we're trying to be transparent on how we did this. So when our LNG customer is known, we have simply compared the gas emissions of the LNG sales to the fuel that this customer would otherwise have used, typically a utility. And when the final customer is not known, we do the same. We compare the emissions of natural gas, but this time, to the weighted average of the flexible power sources that the country in question has, so fuel oil or coal. And to be sure that we are not overestimating the impact, we're multiplying that then by the share of power in the natural gas demand of the country. So we're trying to be on the conservative side here. And when you do all that customer by customer, country by country, the net is roughly 70 million tons of "saved emissions," enabled emission reductions, thanks to our gas sales. In terms of emission factors, we've used the data from the IEA. And if you look at the table, when you have the time, you'll see, of course, that these emission factors are not the same for each country because it depends, for instance, on the age of the infrastructure. The coal plants may be more or less efficient. And therefore, the impact of our coal to gas substitution is not uniform country by country either. All this is something that you would intuitively probably have come to yourself as a conclusion. But despite all these differences country by country, the average conclusion is, I would say, without surprises, because you can see in the table the large contributors to the 70 million tons are countries like China or South Korea, for instance, where very clearly when we sell LNG, the use of coal goes down. And so I would say the net takeaway is that even when our gas-related Scope 3 emissions go up, the world is better off. And so on Scope 3, last chart here, just giving you an update on what we call the OneB2B customer solution that we created last year. If you remember, it's a dedicated group of more than 30 experts now that work with our customers to help them on their decarbonization journey, offering them multi-energy solutions for their own use to decarbonize their own operations. And the customers come from the 11 sectors that are listed here. So it's a sector-based approach, which also means, of course, that we can use best practices from one customer to another customer in a given sector. And again, the best thing is probably to have one of these customers speak for me. So we have a short video from Holcim, global leader in cement, one of the so-called hard-to-abate industries. And well, that customer is going to tell you what it is we're talking about. So can I have the video again? Thank you. [Presentation]

So that's all I wanted to share with you. There's a wealth of more details and stories and data in the report. But now I think we are ready for Q&A. Is that it, Renaud? Thank you.

Thank you, Helle. Thank you, Patrick. So it's now to open our first Q&A session. [Operator Instructions] I see Michele was really eager to start. Michele, go ahead. So we have a first question here, please, on the left.

I had 2 questions I wanted to ask. The first one is on the long-term contracting strategy for LNG. You've benefited tremendously in the last year from having a good share of spot gas and flexibility in your portfolio. But if we look beyond 2027, we could have a few years of oversupplied gas market. So I'm wondering if this may be actually a good time to start to increase again the share in your LNG portfolio. And then my second question is on Brazil. This is a country where you made tremendous entries in the last few years. You built a profitable portfolio. But we've also seen, for the first time, the government breaching the fiscal stability of some of the contracts with these 4 months of export tax. And I was wondering whether you feel confident this is just a one-off and if it somehow changes your attitude towards investment in Brazil.

Thank you, Michele. The first question, I think, of course, today, we share your views about the market, which is clearly in favor of the seller today, which will become probably a market that favors buyers by '27, '28, but it's super cyclical. LNG plants are massive investments and nobody wants to launch them countercyclically. So it's an opportunity for us, of course, to sign some long-term contracts. PNG is the right example. So we are governed by the idea that we want to have a sort of 70% long term, 30%, I would say, short-term portfolio. We don't want to increase it because suddenly, we make more money with the short term. So it's not -- but sometimes there are periods of the market where you cannot sign contracts or you have to accept to sign them at a level which is not good for us. These years are much better. We are back, I would say, to 12% to 13% even Brent. So we come back to something which is attractive, to cover some of these projects, to protect them one way or the other. And I think we see some buyers who are also willing more today to stick -- to go out of a pure JKM indexation, short-term indexation. So it's always a balance. And sometimes, you win. So at the end, I think it's better to keep this type of shares. And so -- opportunities. So our teams are working on it like, by the way, in Qatar, the Qatari are willing to sign some long-term contracts and we share value. And again, 70%, 30%, we are comfortable with that. We know that we will win. Sometimes we'll lose. But when we win, we can win a lot with spot, but we can also lose. So 2020, people are looking to our results in '22. In 2020, I can tell you, Stephane was not so smiling. And -- but okay, this is the advantage of the balance sheet. We can manage the exposure, but not suddenly going to short-term [ is all ]. It would be a mistake because, again, it's a giant investment that we need somewhere. So that's the first point. Second, Brazil, I'm not surprised. It was -- we know Brazil, by the way, but Brazil is an interesting country. Remember, when we came first in Brazil in 2016, when first deal around the Iara, our colleagues of Shell was -- we are fighting -- we were fighting -- the first meeting, I had with Brazilian President Temer was about, "Please don't move anything." And by the way, it was not the federal state, it was the Rio state, which is a more complex story. So you have always in these countries, where you have emerging countries with a strong need for money for policy -- social policies. So the fact that you have an oil and gas business. It would have been surprising to see the U.K. increasing their taxes and not Brazil, to be honest. So of course, reaction of the industry has been very solidarity. All the foreign companies together, together, I must insist, and I think I can only applaud this behavior, we unite everybody, all our Brazilian MDs together. We decided to take actions on legal codes, because it's a matter of principle, about fiscal stability. Of course, the first [ instance ] did not give us [ initially ] did not give us a positive answer, but it's not yet done. And by the way, there is -- we obtained an answer, which is a little strange to me, which is that duty is only for 4 months because, otherwise, it has to go to the parliament, and we don't know. So we are in a situation where, again, governments are facing, after COVID and all this inflation, it's all over the place. Brazil is not immune. Europe, look what happened in Europe. So people -- governments have to spend money for social protection in various plans. We need to find the money. There is good scapegoats, I would say there. But we have also to remind, and it's why we joined our efforts to our colleagues, no, there are some contracts you all closed. We need to stick to that. So we'll fight. Again, it's a matter of size and reaction. So it's important to maintain and to defend our contracts. And this fiscal stability clause exists. We need to remind them to the government -- each government. So does it change my views? I would say, no, because I think as well, that Brazil somewhere knows -- we are -- in all these license, we have Petrobras. And Petrobras is also -- they know the story about Petrobras. So in some ways, it's a way, I think, to protect us somewhere in order to avoid -- because all what they decide for us is also for Petrobras, a national company, but you remember all the issues that Petrobras failed. Petrobras managed successfully to get out of these stories, where were they in 2015. So I think it's also an answer. So Brazil, I would say, for me, risk in Brazil is also for more local businesses, exchange rate, inflation. You have to tackle many of them. But it's a huge country with -- for oil and gas, plenty of resource, giant fields. So we are very simple guys in TotalEnergies. We see giant resource, we cannot avoid to try to get in. This is what we've done in December '21. And '22, we have signed a contract. And '23 is good. So that's the way we work. So giant deepwater fields, that's good. Let's go. It's fitting their criteria. Opportunities, when you have this type of opportunities, you cannot avoid them. For me, it's -- otherwise, then you can regret for long, and you are not sure to come -- they will come back.

Martijn? [indiscernible]

I want to ask you 2 questions. First of all, at some point, TotalEnergies had the ambition to become a top 5 renewable player by the end of the decade with 100 gigawatts. And now there are a lot of targets and a lot of slides. I'm not quite sure, I might have missed it, but I was wondering if that is still in there and if that sort of ambition or that target is sort of still there. I wanted to ask you if that still is relevant. And secondly, I wanted to ask you about this -- about your ambitions in Iraq, with this very large $27 billion project that we sort of read about from time to time. Can you give us an update on what is the sort of status of that? And -- because that seems very large.

Okay. The first one, it's written twice. We are -- there is no U-turn. We stay the course. No, no, you will not convince me to change anything. It's returned page -- Slide 15 and Slide 17, the conclusion. But the question is not the volume, again. It's the value, and I insist more on the ROACE of above 10%. Why? Because, by the way, this year, we managed to grow by 6 -- 7 gigawatts in a year. So we have the pace now. The machine is there. So more -- so I put -- we have the teams. We continue to have access to many opportunities. We can select. We are selective in renewables today with Stephane. So we know we have a visibility. So I don't want people to be driven in the company by the 100 gigawatts story. I want them now to be driven by deliver the profitability, and this is the focus of the organization. So it's there, and it's important because these 100 gigawatts are linked to 20% of our portfolio. If you want to deliver 130 terawatt hour, if you make the math, you have some gas-fired power plants, you will find that it's the fundamental reason why. But let's go -- not -- again, no volume, but value is more important. This is where -- is a way to gain and maintain the trust of the -- and the confidence of our investors. Iraq, to be honest, Iraq, I cannot update you. I mean I will tell you the truth. We have a debate about the contract we signed. We signed a contract. It's just -- Iraq is not the easiest place to invest. We know the risk. For me, as I said to the authorities, the continuity of the voice of the state of Iraq is fundamental. We signed a contract in September '21 with one government. We knew there were elections after. It was a test. Will this contract go through the change of government? We said -- we told them before to close, I would say, we'll wait for confirmation. For the time being, we didn't get it. And if we don't get it, to be honest, I cannot expose a company of a mix of risks because we know there is a security situation. We know the geopolitic situation. We are, I think, quite bold to face the situation, but what is fundamental to me is, I will not use the word "sanctity", just the respect that this contract -- we invest for 20 years. So if the contract has to change after 2 years, that means that we are not there. So I hope we have discussions. We have expressed our views, there are many discussions. But we are waiting for the answer. I read an interview which does not give me a lot of confidence, but I don't know we -- yesterday, I was in [indiscernible] overseeing something. And read the declaration of a minister saying something else or a little -- but that's Iraqi politics. But again, for me, it's a test. And I will not embark the company in such a project, even if, if in fact, the project is not -- we have to renegotiate all the terms. And as you know, we were not there in Iraq before because we were considering the previous contracts. We're not enough -- given enough rewards. And by the way, our peers have exited the country. So we're there. I hope we'll find a common ground. I worked on it in the last months. But again, we need to have this political answer.

Maybe we can go to Oswald right here? Please, Oswald here.

Oswald Clint of Bernstein. Could I ask about SAF, please, and the biofuels ambition to be a leader in SAF? And I think we're in a sustainability day, and you mentioned about buying feedstock companies. And -- but is there not a question where you could do what one of your other peers is doing? You're big in Africa. You could be sourcing feedstocks, waste products in Africa, bringing them to the refineries. It's a very -- it seems like a very good ESG tick or positive here to kind of source them from Africa. That's the first question. And then secondly, for more on the financial side, the 10% return on capital employed in integrated power that's going to be disclosed. Obviously, I guess that's still a 2030 objective. But I wonder if you could talk about the path to getting to that 10% from 2023. I think it'd be a great help if the financial investors, or at least the hardcore financial investors, could see some line of sight to that number perhaps earlier than 2030.

Oswald, I don't speak enough well English. I give you some hints in my [ introduction ], but you could be surprised in April '23 to see more than 10%.

So is that...

Wait and see. Be patient. My CFO has to work a little, make the math. No, no, it's not yet -- no, no, you will see. It's not just -- it's reality what drive us. I remember when we -- when I was -- I reminded that to Stephane when I was a little -- when I was nominated at the end of Refining & Chemicals, I had a target of reaching 12% with a 5% ROACE business. I said it's impossible. And we delivered today 18%, 20%. So it's possible. It's a question of selection of assets and integration. And again, we know that it's not just purely renewables. We are not entering that business for renewable business. We think that this renewable business will deliver some revenues. We know also that we have to combine a merchant, I would say, a secured business like in LNG with a merchant business. And the 70%, 30% is type of ideas that we run and not -- we are not there to be an infrastructure fund. So we don't want to deliver you 6%. It's not our idea. Otherwise, you would be right not to be happy. By the way, I will not come to you to ask you money for that. It's out of us, we want -- we think and we are -- we'll demonstrate to you that we can build an electricity business delivering more than 10% ROACE. We are committed, and we'll see -- you'll be surprised. But it's coming from all the pieces, not only renewable, from storage, from gas-fired power plants, from the trading. You need to put all that together. Like in the oil business, like in the LNG business, it's not only the LNG plants which deliver today's results. It's also because beyond the LNG, we have a portfolio. We have a fleet of 2025. We are growing the fleet of LNG tankers to benefit from the spot because otherwise, you don't find any spot tanker today, so you need to grow the fleet. So it's the whole logistics and mechanics. And this is the idea, the advantage of a company like TotalEnergies. We have the balance sheet to put that in place in electricity, which a lot of competitors do not have. And it's also a field where we think we can make like we've done. Because it's very large, we've done some direct negotiation, direct agreement like Clearway, like Casa dos Ventos. We don't participate to any auctions with banks in renewables. You are sure to lose money or to destroy the value. You have to be smart like in all the business, and we can do it because now we have really a strong team, larger team. We spend more time on that. And so that's -- so it's not a road map to get to 10% by 2030. We want 10% much before. So we'll -- you'll get it and 2025 will have secure and maybe we'll increase it when we'll be more confident. Thank you. On the SAF, yes, I think first, what we've done this year, for example, for the company, we made a JV with [indiscernible] the animal fats producer, SARIA, which is one of the largest one in Germany. It took us a year to build that, but it's a long-term commitment from them because they are also, by the way, investing in the plant. But for us, it was securing the feedstock at a good price, good price. And we have been obliged to be involved in the upstream part of their business. But I think it's the way of securing the feedstock. The scarce resource is the feedstock inventory. So then looking to Africa. First, I do not like too much to take waste around the planet. I mean Chinese waste, I mean be careful. There is ESG. You have sustainability. If you begin to move waste in boats, so that it could become another problem. So no, I don't want to have a controversy. But I was involved when I was a young as a civil servant in waste management and waste export and import, I can tell you it could become very complex to control. So it's -- so that's why we are more looking today, and we have made an announcement I think this week or last week, that another agreement with a French company involved in municipal waste in order to have some waste to make some biomethane. And so to -- and they will also with the same idea, you give us access to the feedstock, which we sort out the right ones, and you invest with us in the biomethane, try to manage these JVs, bringing, on one side, the feedstock, the other one, bringing the investments and putting that together. It's a way to develop the business. Africa will look to -- it's like the shops and the holdings and all that. I'm not very good in agriculture, to be honest. So we look to the intercrop business, I mean a little careful. In Africa, you have people who don't have food every day. So to develop an intercrop culture, if crop is not enough for them, we want also to be sure it's sustainable. We are looking to that, to be honest. I know that one of my peers is very strong on that. So he seems to have developed the knowledge. It's not impossible, we'll do it, but more on this intercrop story rather than the waste. And the waste, I'm more -- I'm skeptical. My traders wanted to find a very -- a beautiful source of waste in China. I told them, okay, be careful not to bring [indiscernible]. I think we should be careful. The sustainability aspects is also be circularity and not to transport all these type of feedstock around the planet. We will have a huge exposure to that. So I'm not in favor of that. So let's be -- but we have ways to find feedstock, but that's my point.

Okay. This way, Irene, please?

Irene Himona, Societe Generale. I had 2 questions. So first, you provide in this slide like a useful table of your exposure to unconventional hydrocarbons like shales, Arctic and so on. You show 32% of your volumes in those themes. I wonder if you can talk about the average emissions of those barrels. Would it be above the portfolio on average? And then my second question, clearly, the $1 billion of additional CapEx you announced in September on energy efficiency is going a long way to accelerate emissions reductions that you're announcing today. Can you give us some examples of those energy efficiency measures? Is it 2 or 3 key things you're doing? Or is it hundreds of different actions? And then does it increase perhaps the proportion of taxonomy aligned CapEx in the group total?

I'll take the answer on the second question, Irene. There were 2 examples on my chart, one on -- from E&P, so essentially changing gas turbines and one from Refining & Chemicals. And the short answer to your question is it's more hundreds of projects than a couple of landmark ones. If it were easy as that, I hope that we had already done it, right? So no, it's really a bottom-up exercise. It's asset-by-asset, as I think we already explained, but this is an acceleration of some of those programs. And so essentially, read the examples, and there are more in the report. On alignment, it's not going to be a game changer in terms of alignment of the taxonomy. It's designed differently, but it will play a big role in our reduction of Scope 1 and 2 emissions.

To be honest, on the alignment taxonomy, as it's '23 CapEx, I'm not sure we have studied carefully. It's quite a complex regulation. But Jean-Pierre will come back on taxonomy in his Zoom. So you will maybe -- he will maybe -- he has, [indiscernible] to find the answer. So he will give you the answer during the presentation. On the first one, I was surprised because I say what is this 32%? Out of 32%, you have 16% which have disappeared. They were in Russia, in Arctic. And Arctic is low emission. So in fact, there is no link -- there is something wrong about this unconventional story. Unconventional, unfortunately, is the way some, I would say, some offices try to translate it. It's a mix of shale oil, shale gas, where there are higher emissions. Even if you can cope with that, the way we produce today shale gas, we have a little production of shale gas in Barnett Shale. We have eliminated most of the methane emission. So you can do it. It's tar sands, but tar sands at 4%, we will spin off that. So they will disappear over -- it's clear. This is clear, that tar sands have higher emissions, but the 4% will disappear. Then it's Arctic, but it's out of the portfolio. And this one has a low -- very low emissions, because producing gas in Arctic. So there is no link between Arctic and CO2, to be honest. It's another -- Arctic is more a question of protection of the, I would say, of biodiversity. And ultra deep offshore, the same. There is no link between the depth of the water and the fact that there is more emission. In fact, honestly, by the way, ultra deep offshore, I still do not understand why you want to classify that in unconventional. It's not a matter of depth of water. It's a matter of pressure in the reservoir. And there is -- that's true that you could have some situation where because the water is deeper, you could go to deeper horizons with more pressure, but it's not the case in many of it. So there is no link between the depth of the water depth and the pressure in the reservoir. So for somebody who knows about oil and gas, this classification is very strange to me. So by the way, we don't develop overpressured reservoirs in deepwater or ultra deepwater because of risk. So we get out of that. But the fact that there is absolutely no link. So this classification about unconventional gave me the opportunity, but except the shale oil, shale gas and the tar sands where I can accept that we have to work on Scope 1 and 2, the rest, there is no link between what you call unconventional and climate emission. But it's part of things which we need to progress collectively in order to put some science or business in the way we appreciate the performance of companies. So we will not be at 32%, but less than [ 32% ]. So we -- it's good for, I don't know which article -- a number of article of funds, but -- again, I accept to take action when really it has an impact. But when it's just a classification, it's not good for us to spend money on things which are not useful for the planet. Another point?

Chris Kuplent?

Chris Kuplent from Bank of America. Two hopefully quick questions. One, I'm sure you've been expecting, which is, can you maybe outline the recent disposal of your marketing assets and their contribution to the cut in Scope 3 emissions? Whether that disposal alone gets you closer to your 2030 alignment or whether there are more to go? And on the topic of M&A, I've asked the same question a number of years, and I'm very happy for you to just repeat what you're always answering, which is, of course, on the other side of M&A, there are acquisitions. Some might say this is an interesting time when interest rates are very clearly no longer 0 and some balance sheets might be looking for rescues. Can you just confirm that any acquisition will have to fit into these targets that you've outlined here today and that you're not going to acquire something where afterwards, you're going to give us pro forma CO2 statistics?

Okay. No. Honestly, it's not link again in Scope 3, where Scope 3 reduction of this idea -- well, it will be limited as long as we supply. Because when we supply, and we will supply this network. They increase the Brent, we will supply them from our refining system. So Scope 3 will remain as they are a customer in our refining Scope 3, the way we evaluate the Scope 3. So in fact, it does not have direct impact. It has a direct impact from the part of this network which were not supplied by us, which will be not supplied by us because we don't have the capacity to supply it. And again, it was not the driver behind. So the reduction we mentioned to you is, again, the alignment, we've done it. And in fact, it's also somewhere the fact that we think that we'll have to continue to transform some of our refineries in biorefinery. So it's a whole system, but it's not driven by the Scope 3 impact. And again, if all of it, just to give you a figure, was a Scope 3, it's 14 million tons of Scope 3. So it's not really the target. It's all -- we are exiting the supply. But as long as we supply, we are in for the Scope 3, okay? Just to clarify this point. But I gave you the right reason why, it's because we think we have to anticipate. We think that retail networks in Europe, some of the position will be very good in the city on motorways. Some of us will become marginal and we will not transform Total into grocery business. M&A, okay, interesting time, we'll see. Let's wait. We are patient. New acquisition will need to fit in new [ targets ]. It depends on the size of the acquisition. For the time being, we never revised any of our targets because of acquisition, okay? If we'll have to do it, we'll tell you, it depends what the target is giving us, okay? But I have no idea. Nobody answer, they will think, okay, he's thinking to a super giant acquisition. I think because of that, it's not true. Because of that, it's not compatible, I would say. Now -- but again, it's -- let's work. We'll be able to explain to you what we do. But it's not -- and this is where they are in these parameters, some on which I'm comfortable. Again, Scope 1 and 2, I consider we need to produce hydrocarbon in a different way and tackling these emissions, as we've done in the past with SOx or NOx, it's the emission. Let's eliminate them. We have technology. It has a cost, but we can do it. So there is no debate. So Scope 3 in volume, that's why we insisted, maybe you noticed that in the table, we put in carbon intensity before the absolute volume. That's -- I will not -- I mean the carbon intensity is a good measurement for me of the evolution of the strategy. And I agree with it as well, going to more gas, to more electricity. Okay, that's the strategy. The volume of Scope 3, honestly, is there. We put under 400 million because what we see is okay. But we're not -- and you've seen that we did not lower that target because we don't consider, that we, again, have an impact on some of it, what we do with our sales, what we do for [indiscernible] -- yes, we can impact customers. But again, we don't decide is at the end of the day, the car manufacturing will sell 30% of EVs or 70%, and that has a direct impact on Scope 3. So Scope 3 is a shared emission. It's not our emission. It's the emission of demand of the -- it's an action on demand. We can -- and we have a role, and this is why we set this OneB2B business because, again, it's linking our business and bringing the scope of our solutions to customers, but I don't consider the company is responsible. So this one could move if it has to move. But again -- so we don't see that as constrained. We see that as a commitment when we are a portfolio and some, again, some opportunities to deploy the strategy.

Lydia is raising the hand since the beginning. Maybe we go to Lydia.

Two questions, if I could. The first one, if I can ask that avoided emissions one. There's obviously a lot of work that's gone into that. At some point, do you want to start targeting that sort of avoided emissions number that we add on, the benefit of the electricity production, all the stuff that you do on OneB2B, is that something that over time it will get more of? And the second one, Patrick, on the electricity business, I'm not quite sure I understand entirely why you want the production to equal the sales because in LNG, you trade around things. Surely, there's more optionality in being able to trade around things as well. So I'm just wondering why that is, because I'm not sure I 100% understand.

Yes. Why, you can ask Stephane what he thinks about the year 2022, when you are longer customer and short supply. And when you have to go and find electricity on spot markets, which go through the roof, and you have to transfer that to your customers. And then you put some rebates. So I mean I will tell you why. It's not the same type of resource. You cannot store electricity. You don't store electricity. That's the difficulty, when you are imbalanced. You know what I mean. And so you have -- you can store gas. You can -- we bought some storage of LNG storage or oil storage. So -- but that's not exactly the same business. So we draw some lessons. Honestly, I think you will -- my view, after having spent now with my -- our teams together quite a lot, 5 years, I would say, to dig into all these businesses. But at the end, the customer side is more the marginal [ siloed marketed ] side. It's a small [ cent ] margin. You could lose it. You make money on the investments. Like always in all the energy business, you invest, you produce capacity, you begin to store and then you trade these assets, then you can make more money. The end customer is like -- is even smaller margin, so it's volatile. So that's why we want -- so we don't want -- and back to a question of Chris, we'll not want to be driven on the carbon intensity by putting plenty of electricity customers just to diminish the numerator and making no profits. And so it could be a temptation for some people. And so I said, no, no, no, we are there to make, to deliver value and not just because we have one of the criteria, which could lead to that. So it's always a criteria. KPIs, you have always to monitor them carefully. Avoided emissions. We -- I mean we know that it's a concept which some people are not happy with. They are not -- they have working groups, by the way, I understand at the UN level, who are working on the definition. We would welcome a definition, to be honest. Of course, we could have today -- and we made some math internally about what the renewables are doing, et cetera. But at this stage, we prefer step by step to introduce the content. Because honestly, on the Scope 3 debate, we are more and more with the Board and comfortable about the fact that Scope 3 [indiscernible] gas Scope 3. Because gas, again, maybe it provides some Scope 3. But when it's used to back out some coal or fuel in some countries, and then you -- at the end, what is important to the emissions, which are in the -- go to the atmosphere, to the sky, it's not Scope 3. If this energy is allowed to avoid -- to enable to avoid some emissions, reduce some emissions, it's a good one. So we wanted to make the math. So before to come to tell you we have -- and to be -- I'm sure we'll be accused of greenwashing one again. So let's go step by step. But what I would welcome again is to have a clear framework. And I think it's useful because again, it's a recognition what is the value of each of these actions. Of course, I know the debate. You count these gas avoided emission, but at the same time, China continues to grow its coal-fired power plants. Yes, but we could demonstrate that if they have no gas, they will grow them at a higher pace. So I know there is a debate. So it's why we wanted to be prudent, but we had to put it on the table in the debate in order to explain why we don't take any commitment on the Scope 3 of gas because maybe at the end, we could translate Scope 3 minus Scope 4, but I don't -- I'm afraid by engineers and figures and KPIs. I want -- I would like just to say that we welcome this, more definition. And I think we are not the first one of the peers to have introduced that target. We took time. And I can tell you, we spent several sessions to be sure that the figure we put today could be demonstrated and next year audited, by the way, because I want that to be audited by a third party in order to -- but it's the first year that we produce them.

I'll just add to the answer, Lydia, that I'm not sure we'll ever be able to do a target, because as the table tells you, it really depends on the destination of the LNG sales also. So we'll let Stephane optimize his portfolio and then we will do the reporting based on where the LNG landed. But I think it's a good initiative to report on this. And then you can all make with the data what you want, right? But we do demonstrate that gas has a value in the transition. And fully agreed with Patrick's comment, that's what I meant when I said the world wins. When we sell gas instead of coal compared to a situation where the customer would use coal or fuel, clearly, the planet wins, okay?

We have questions from investors. I don't know if you -- there are some investors.

I see some raising their finger for many minutes. It could become 6. So I see our friend there in the first row, and then Lucas on the second one. You are -- Lucas, you are right in my -- under my eyes, so I see you raising. So this one and then Lucas. Sorry for that. But when you are at the stop, you don't have [indiscernible].

Matthias Pedersen from PFA. Two questions, maybe to pick on the question from before. But with the expected sale of Canadian tar sands, would that materially impact the average portfolio emission of the oil portfolio, and hence, the threshold of 19 kilos CO2 per barrel for new projects? And secondly, with your 2030 targets, as you announced today, are you comfortable with also obtaining external verification of that midterm target as being Paris aligned? Or what steps do you see in terms of obtaining that?

The first one, it's 100,000 barrel per day out of -- which are, yes, higher emission. So there will be an impact. We will provide you -- I don't have in mind what is the impact. But obviously, this will have a positive impact. By the way, not only on the emission, but the cost as well of our portfolio, because it's high cost. So it has plenty of virtue, in fact, which is good. So we can make the -- we will provide you with the precise figures. And the second one, which is Paris, 2030 Scope 1 and 2, Helle, you have commented it, but you want -- Canada, it could go down from 19 to 18, the answer to your first question, 1 kilo per barrel could be the impact. So it's not -- it's something sizable. Helle, on the first one, Scope...?

On Scope 1 and 2, was that your question, Matthias?

[indiscernible] across the scopes.

Sorry? Across the scopes. Well, I guess what we have is some of the third-party assessments that we shared with you, but that's it. There is not 1 certified unique way of assessing this. There's no SBTi for oil and gas. So I guess people use their own methodology, right?

No, but there will be -- to clear, what you -- we will not ask to any verification on any Scope 3 trajectory. Let's be clear. Scope 1 and 2, we are fully responsible of it and we report and we are very clear. I remind you that if all the companies and people of the world were expecting the Scope 1 and 2 trajectory, it will be fine. So asking a third party to look at Scope 3 is not part of what the Board will require. What we've done in the presentation -- I think that Helle presented to you -- we've done this exercise about trying to put our objectives up to 2030, both Scope 1 and 2 and the carbon intensity.

And intensity, yes.

We made our own exercise to compare this trajectory to the different scenarios of IEA to position ourselves and our objectives. And we show you that the objectives to 2030 Scope 1 and 2 seems to be on the net zero...

Trajectory.

Trajectory. And for carbon intensity, more on the APS. That's what we show you. APS is compatible with the Paris agreement. So this is a demonstration. Can we -- if you want us to show this curve to a third party, we can do that. I'm fine. What we produce can be -- this is the rule. We don't produce anything to you which cannot be audited by a third party. Otherwise, if we have some doubts at the Executive Committee, we keep the doubt for ourselves. But when we come to you with some -- this type of slide, it's because we have looked at it seriously. We validate them and we can go to third parties. So from this perspective, we can do the work like on the avoided emissions, we will. Good idea.

Patrick, and you're a much better comp here than Renaud, by the way. Totally appreciate it.

I mean this is why I'm CEO. He's only investor -- Head of Investor Relations. He can learn a little.

Renaud, take notes. Two questions, if I might. But the first I'm going to butcher French here, the topic du jure, which is kind of the EU Inflation Reduction Act, carbon capture. I mean it almost -- when I read it, it almost reads like a polluter pays. And I just wanted you to -- I wanted to get some sense of when you look at the legislation as it stands or the suggestion as it stands and compare it with the offering in the U.S., does carbon capture in Europe for you end up as being a -- this is how we offset our own emissions rather than really being a business opportunity, certainly, the incentives -- well, I can't see the incentives here. It sounds more threat than anything else, but just observations and whether one is missing something in terms of incentives. And the second is oil. Solid news or great news on Suriname, but fantastic that you've got large development opportunity now in Suriname that you're verifying. And we would very much hope, large development opportunity in Namibia as the results come through. I'm sure you won't be allocating as much exploration capital otherwise. How do I think about the potential for barrels emerging from those regions in the context of 2030 objectives on essentially flat oil? Is it -- how much is it telling me about shift in portfolio over that time, opportunity to shift portfolio over that time?

Any good opportunities will be developed. Again, we are facing a decline of 4% per year. So there is room to improve, to inject.

You've got a pretty stable business, Patrick, particularly in the Middle East, so...

It has to be -- if we develop them, we will have to put them into our Scope 1 and 2 targets. So from this perspective, coming back to Chris' question, we will develop them with Scope 1 and 2 targets. We have to find the solutions. And if it's plus 1 -- if oil is growing by plus 2% or plus 3%, it's not a problem, okay? Okay, clear?

Clear.

So otherwise, I would not spend my money in exploration in Namibia like we do. So again, I know that some of you would like us to announce a growth target on oil. I remind you that when we've done that from 2008 to '15, you pushed us to do that. Most of you were there. I remember I was younger, but you were there. And let's go to 3%, 4%, 5% was the race to growth. At the end, the result has been a destruction of value by our industry. Why? Because it was volume over value. It was chasing the barrels. I don't want the company to behave like that. I want to continue to develop the opportunity, the optionality, Suriname, Namibia, Abu Dhabi. Look, we didn't hesitate to took that license, okay? We took that. And then we'll see the results. And then we'll be able to tell you, we have this portfolio, we can grow by that. Not being driven by a wrong target, which will think that our teams believe that any barrels is valuable. No, any barrel is not valuable. Don't repeat the same mistake. So I prefer to have the opportunity in my portfolio and then could back to you. What is important for you is to -- that we'll be able to tell you, yes, Suriname is growing, and that's the value what we can extract of it on Namibia. And I remind you as well that there is something in our industry which is dangerous because of that. Is that generally, when you are pro-cyclical, costs increase dramatically. And when costs increase, you can destroy the value. So it's a matter of managing all this growth. I want to keep this flexibility, not to be obliged to develop the Block 32 in Angola because we announced you that we'll grow by 5%, to spend $18 billion instead of $12 billion and then making $5 billion write-off. This is what we have done. So I don't want to repeat that. I prefer to have the capacity to manage all these developments, like I mentioned that on Mozambique. Of course, we have the barrels, that will not disappear. And the oil will be needed in that planet. It's good oil. You can develop it by less than $20 per barrel. So it's a question of keeping the pace and managing the various expectations, including in terms of cost of development. On IRA, yes, you're right. You are right. I mean I agree. The plan of European plan seems to be the oil and gas company will have to do that, to pay. I understand what you said. This will come back to reality at the end of the day. And the reality is that when we discuss with countries like the Netherlands about Aramis or when we discuss about it with Denmark about our projects, they are really looking to that to also them as an opportunity to keep industries, how to abate industries and jobs in Europe. And so maybe the subsidiaries will not go directly to us, but will go to these industries, which will then be able -- and they are -- the steel manufacturers in Europe are quite good to get some subsidies today. I can tell you, all the governments want to keep them. So the subsidies can go to them. Even at the end of the day, we gave them back by the price of storage that they can afford it. So at the end, the equation will have to work. Otherwise, this business will make no sense to develop storage if there is no customer for it. If it is for own emission, it's part of our costs. But I don't need to develop all these million tons of CCS for myself. I don't need all of that. So if I'm developing for others, the others will have to find an acceptable scheme. And so the subsidies will go to these customers, not -- probably not to be oil and gas, but it's not an issue for me. The Norwegians have decided to do it directly for the oil and gas industry, but they are Norwegian. They know what it is oil and gas business. It's part -- the wealth of the country is coming from where. So they are pragmatic. So that's my answer to you. It's true that it's not directly as efficient. And when you look to the IRA, you have $85 per ton. So you know what you have to do. And so it's less -- it's more complex to put in place. But at the end of the day, it does not mean that a project in the U.S. -- everybody is rushing to the U.S. But at the end, the permitting issue and the infrastructure issue in the U.S. are not much easier than in Europe. And when you discuss with our -- when we look facing some projects. So there will be also some hurdles. So that's my answer to your good question. Thank you, Lucas.

Yes, in front here.

Alessandro Pozzi from Mediobanca. Two questions. The first one on Scope 1 and 2, I think the real test is going to be post 2025 in terms of reduction of emissions. And it looks like 2 factors are behind it, the CCS and carbon sinks. Can you give us a sense of the cost for achieving those initiatives and how they could translate into potentially higher technical costs on the Upstream side? And the second question is, I believe you mentioned storage in renewables. How does it fit into the equation of achieving a ROACE of over 10%? Do you see that as a cost or as an enabler of a higher return in renewables?

Second one is clearly part of it. When you are -- it's even super important. When you are developing a solar farm in Texas, if you don't combine that with some storage capacity, all the solar farms at 12 are running at the top. Supplies could be negative. So you don't want to sell at this point of the day. For the 30% which are merchant, you want to be able to store and to deliver them at 8 p.m. or 7 p.m. when everybody is back home and climatization, TV. So it's just part of the model. As soon as you go to some merchant business -- but you cannot develop all these capacities, believing that you will find corporate PPAs at a fixed price. By the way, it's not our business model. So they are part, I would say, for me of the building the capacity, and the value will be obtained for this type of investments, not only through part of the capacity can be sold to some utilities, but also by our own traders. So you have -- when you build storage in the U.S., we see that as part of it could be 70% again, I don't know, 70% or 60%, but it can be 50%, could be sold to utilities who need to have some -- who want to have access to capacity against a capacity price, and part of it will be kept by us in order to optimize our own production. That's for the storage. So it's part of the integrated power and it's part of the 10% ROACE there. So it's not a cost, it's a cost and an opportunity at the end -- for us, like what we invest. Now the Scope 1 and 2, don't make the mistake in our business, in our company, Scope 1 and 2 of the Downstream of refining is larger than the one of Upstream. Refinery is a source of [ use ] of Scope 1 and 2. So the target to go down to the 2030 is a mix of -- as it was explained by Helle, greening all of Scope 2, so using our competencies in renewables, we want all the refineries, and it's a matter of renewables and trading, to be supplied by green electricity. And we are building the plant in Spain, in the U.S., in order to do that. And it's also with, by the way, a PPA between my integrated power division, and my Refining & Chemicals division and then the integrated power will have to take care of the PPA. So we have done it as with another customer, exactly negotiation. I had to arbitrate the negotiation at the end. But we've done it. So it's the way we progress. It's also working. So at the end, the minus 40% is accounting. As we said, I think it was written, 5 million to 10 million of storage. I would say most of that will be at this point of time natural-based carbon sinks, let's say, 5 million probably range, which are today -- and we have quite a number of -- there was a presentation I think last year. We are quite stringent, develop at an average of, let's say, $15 or $20 per ton. So it's not so expensive. We spend $100 million. We are building this inventory of carbon credits. By the way, 1 thing we need absolutely to expect from the COP28, I've said that to [indiscernible], is really a huge progress on having a clear serious framework for these carbon credits. We are, I met John Kerry, need absolutely to get that. Because otherwise, we begin to be afraid by all these controversies about this type of credit. We need to [indiscernible] net zero. These are super efficient way to store and to eliminate, to compensate some emission, very efficient. So we should have a strong and serious framework. It's very important if we are serious about the Paris agreement. The carbon storage at 2030 for our own emission is quite -- is still limited, to be clear.

[indiscernible]

It's investing in different carbon sinks. We have taken some projects, forestry project in Congo, sustainable forestry. It's a long process. You have to invest between years because, in fact, you can have the credit only if it's a sustainable carbon sinks. It's not planting trees, that does not work. It's maintaining, developing. So it's 20-year projects on which we begin to -- so we have different projects. We have where we have begin to invest in Congo, in Gabon, in Southeast Asia, in Australia, in Peru, in Ecuador. So we don't make too much noise about it, but we -- because we don't use them. We store them and from 2030. We want to use them only the day we have at least 10 years in advance of sustainable level. We don't want just to make [indiscernible] year after year. We want to be able to demonstrate that we have enough in order, yes, to put them in our accounts. We do that only for us. We don't intend to trade them. We -- all the investments we do are absolutely linked only to our own emissions. We don't want to -- it's not a matter to make money. It's a matter to be serious about it. So these are projects which are quite complex, involving a lot of communities generally and so a lot of -- that's what we developed.

There's one page in the report.

So in the report, you have more information about that.

More questions? Yes, we have [ Sander ] here.

[ Sander Ripa from MN ]. We were quite surprised with seeing the minus 25% for CO2 intensity. So -- but let me -- or explain me the math a little bit. So what are you doing faster? What are you doing more? And really maybe what are you doing less? So maybe are you producing less oil in 2030?

No. No. No, no. You didn't see that in the presentation. Maybe you would like to see it. I know because we met last week, I think you were in my -- came to my office last week. So we met. But no, it's not the case. No, no. No, it's because, again, I think we look seriously to that. We are much more confident to our ability to deliver this 130 terawatt hour of green electrons. We know -- when we set the target in 2020, we are at the beginning of the story. We had 2 or 3 gigawatts. Today, we have 17. So we have been able -- and again, by the way, to accelerate -- for me, honestly, I would be true -- clear with you. I would not have put many dollars to -- what, we will spend $4 billion in 2022, $5 billion in '23, because we have created much quicker than expected the machine, I would say, the people and the portfolio. And so today, we are much -- we are most confident in the fact that we can deliver what we told you. So I think this is a way for me to look to this target, is we said, okay -- and by the way, I said to the Board, let's be clear, this minus 25% means we'll have to deliver. It's not aspirational. What we said, that coming back to the question of -- I think it was one of the first question, we have to deliver this 130 terawatt hour. This is the condition. We have also to transform part of our -- to transform the Downstream, as we said. So the alignment is part of it. So it's -- and by the way, you've seen that we come forward with the Scope 3 reduction and the Scope 1 and 2, there is a link there between the minus 40%, minus 25%, there is a link between both figures. It would have been strange to diminish one and not the other. But you could have said there is something. So that's the logic. So it's getting more and more confident in the capacity to execute the strategy. And again, from '22, the fact that our balance sheet, all that what happens, gives us a lot of financial strength to execute it and not to -- and to do it in a quicker way as well. That's what's behind.

Maybe Kim Fustier?

We have Kim in the back. Like Lucas, Renaud don't see you. Okay.

You may have disclosed this before, I think you have. But in the 10% ROCE target in integrated power, could you maybe just remind us how much of that comes from integration and how much of that comes from base returns at the project level? And just maybe give a couple of examples.

Do you have that information, our oil and gas ROACE? So why do you want me to give you that information of integrated power, which is just being disclosed? Wait and see. You have to work a little. I cannot fill all the Excel file. That's part of the third between just -- no, I mean we'll see. Everything is contributing to the results. Everything is contributing to the ROACE. But again, I mean I'm -- that's where we'll -- that integration is fundamental, okay?

That's fair enough. My second question is on your own emission reduction efforts. You've accelerated those targets on Scope 1 and 2 emission reductions, especially on energy efficiency. And I'm just wondering how much of a role are high energy costs playing? In other words, would you be undertaking all of these initiatives if, let's say, European gas prices were 1/3 of what they are today? .

Yes. But I will tell you, we do it because we have more money. We have more money, we have more in higher price of energies. We are an energy company. So we benefit from the higher price. Of course, the energy is also a cost in our refineries. So that's the motivation. Let's be clear. I said to my refiners, you need to have more ideas. And so by the way, I was -- it was interesting for me, but we said in July, we will allocate $1 billion. People has looked to me, what do you want us to do? Think, please go to your plants. And because they are facing a cost, you are clear in refineries, they came with many ideas. So yes, it's clear that the high price of energy -- but at the end, the way we look at the portfolio was not in terms of returns, was $1 per ton of CO2 at all level. We asked them to translate all their initiatives in dollar per ton of CO2. And the average of dollar per ton of CO2 is around $50 per ton of CO2. I remind you that we have -- we evaluate all the projects with [ dollar ] per ton. So a dollar -- $50 per ton of CO2 in Europe, by the way, the price is around $100. So it makes sense, we have a return. So we made it possible because we have more money. And so we think it was the right investment. And it's clear. But as I told them, it will help you to lower your breakeven. So when the margin -- refining margin will go down again, you will be in a bit -- in a safer place. So the motivation is an economic and a sustainable motivation, but it was made possible. So I think it was a good investment in the company to strengthen the breakeven of our refineries and also to lower our emissions. We have still another in the back? I will buy some lenses to Renaud.

Just 1 question. It's Christyan Malek, JPMorgan. What -- you mentioned the volume growth, and I agree to focus on value. What sort of indicators are you looking for to sanction this volume? I mean when is the day that you turn around and say, all right, we're going to go ahead? Obviously, finding the oil is important. [indiscernible]. But just can you give us an idea of what is it just as we think about your CapEx? Because as that day comes, I suspect the CapEx goes up on the back of it as well. So I just want to understand the trajectory and what key milestones we're looking for to anticipate.

Anticipate that up to $18 billion is okay. We have room to navigate up to $18 billion. The sanctioned volumes is a sanction of projects. It's very clear. We use criteria we described, $15 per barrel, 15% rate of return, more or less. It depends. When it's LNG, it's not an IRR, but we evaluate the project. It's more in cash per CapEx, I would say. And then $20 per barrel technical cost, which becomes -- which could become a tough hurdle for our E&P division or $30 per barrel of breakeven, which is another one. And the 19 kilogram per barrel, maybe 18 next year. That's a combination of criteria that we use. Then generally, I'm looking myself to again this famous ratio, but what is NPV 0, which is created divided by the CapEx I invest. So for me, it's an important criteria. I like that to be more, but 2 and more than -- less than 1. I'd like to see what is -- because at the end, if I need to increase my return to my shareholders is the NPV 0, which counts. It's not the discounted value. The discounted value is something which is a little more complex to manipulate. What you want at the end is not a discounted dividend. You want a real one with real cash. So that's why I'm looking to this type of value creation. It's a factor of how much do I put on the table, how much do I get out of the projects? And that's a simple metric which works quite well.

Any other question? I think we are done. You will have other opportunities to ask questions after the second part of the afternoon that we can launch, which will be, of course, shorter. But basically, we -- which we'll try to illustrate our sustainability journey. So it's a short illustration. So it will be a -- maybe we can move to the next slide. Yes, it will be with 3 people, 3 voices. So we'll have -- Helle will cover what we call the planet about nature, a few slides to illustrate. People with Namita Shah; and profits with Jean-Pierre. Just a little piece of advertisement again. So we have our report, which is online. It's a piece of -- a very rich piece of information, what will be described today and now is only a part of it. So just download the report and you will get all the details and all information you need. I see people there who have been working on it. So let's start now. Helle, the floor is yours.

Thank you, Renaud. I'll start with the planet and just a couple of charts really quick on nature, starting with biodiversity. Taking care of biodiversity, we continue to manage our operations and our new projects in line with the 4 pillars, the 4 commitments on biodiversity that we shared with you last year and that are written here again on the chart. So I assume that you're familiar with that. Otherwise, again, there's plenty of details in the report. What I want to talk about is 2 new things. This is a progress report. So 2 new things, amongst others for 2022. The first one, linked to Patrick's initial chart on our Sustainab’ALL program. One of the elements of that program is that each and every site, each business unit, each affiliate of TotalEnergies is going to have a biodiversity action plan locally. So that's something new. It goes way beyond what we had in terms of commitments earlier because we were talking about biodiversity action plans in the sites that were important in terms of biodiversity. Now it's going to be generalized. So of course, it will depend the quality or the substance of the plan will depend on each site. If you are working in a building somewhere, it's not exactly the same as if you have an operation out to somewhere in the field. But it is very important for us and we think it's a good way to embed culture, a culture shift around both awareness and commitment to biodiversity. And as Patrick explained, there was a huge buy-in to this whole sustainable program and certainly on that aspect also, linked to biodiversity. So first thing, cultural change and working really on every site on biodiversity and having a positive impact. We also, just to remind you, that we had this commitment on the zero net deforestation for new projects in new sites. And the update I have for you is that we did not FID any project in 2022 that was concerned by that commitment. But of course, it's still valid. I also just want to comment on the case study to the right here from Uganda and just want to tell you that in connection with the Tilenga project in Uganda, so the Upstream part of the project, we have teamed up with Uganda's wildlife authority, UWA. And we've teamed up with them really to together jointly fight against poaching in the park of Murchison Falls. We are promoting a new model for the park, a collaborative management model where essentially UWA and the public authority, therefore, will team up with experienced NGOs that really know about preserving biodiversity. That's a model we are going after. And as a first step, we brokered a relationship and a partnership between UWA and WCS, Wildlife Conservation Society, that worked together in the park and came up with some tangible, visible results in terms of picking up poaching material. We are seeing here 1,200 snails were removed from the park, and that was very much linked to the quality of the NGO, WCS, but also a range of training, new equipment for the rangers. And a lot of other things came out of that first milestone on the collaboration. Our role is to provide technical support, and of course, to provide funding. And over time, the goal is to put Murchison Falls really in line with the best managed national parks in Africa. And I can tell you that right now, they are not quite there. I also just remind you that in Uganda, we have said that the broader biodiversity action plans are designed to create a net gain in terms of biodiversity. And second chart here is on preserving scarce freshwater resources. One of the themes of the IPCC report that came out yesterday or the day before, very important, of course. Remember that we joined the CEO Water Mandate last year. and we are progressing on our action plans linked to the 10 sites we have that are in water-stressed areas by 2030. And so we're really implementing concrete action plans. And one example we give you here is the Antwerp platform in Belgium where essentially, we are going to replace the freshwater that is used for the cooling processors of the platform, replace that with purified wastewater, and we'll invest to that end. And the project will be up and running in a couple of years. So again, we'll do that on all the sites we have in that area. Another thing we did in 2022 was to look at our data centers and assess if they were using any water resources. And we found out that they are not. So we have data centers that do not use water for cooling processes, which is important. And the last thing I wanted to share with you is that we're also readying up to be able to audit our suppliers, our key suppliers, on their water usage. So continuing to drive, I would say, sustainability throughout the value chain, as we also said we would. And there are a number of other themes on which we will be working with our suppliers starting this year or the next year. That's really all I wanted to share with you on nature. And Namita, I hand over to you.

Thank you very much. So I'm going to talk about people. And I'd like to start, of course, by talking about our people, who are arguably, our most important asset and without whom much of what Patrick and Helle spoke about before the Q&A would not be possible. As all companies, we do regular employee surveys. Our last one was in 2022. It was the first one after the pandemic and the first one after a complete deployment of our new strategy, our multi-energy strategy within the company. As you can see, that our engagement score of our people is at over 80%, which we are very, very pleased with. And more importantly, you can see that 87% of our employees have confidence that we will be able to achieve our ambitions. So as all of you have probably understood over the past few years, when we say that we are going to do something, we do it. And our employees are clearly very much behind that and are there to deliver on our ambition and deliver on what it is that we say that we would like to deliver on. After the pandemic, as a lot of you know, the expectations of employees from their employers as to the kind of care that we are providing has changed, and we have decided to put together what we call a sort of a well-being score, which is a combination of several questions, which we will be ensuring to be aligned with external benchmarks, but which cover a range of questions from things like mental to physical well-being, to just compensation, to being the -- given the opportunity to look after our families, to work in a flexible environment and to be able to feel safe at work and to feel respected at work. The score for that in 2022 was 78.6%, as you can see on this slide, and we'll be continuing to work on several care programs. The last thing I'd like to mention before I talk about feeling safe and respected at work is that in the sustainable goals that Patrick mentioned at the opening of this afternoon, one of the things that we have decided that we are going to be following on a site-by-site and an affiliate, team-by-team basis is the engagement of our employees, to be able to listen to them better and make sure that in every entity of our company, we are listening and making sure that we are responding to the concerns of our employees. Of course, people cannot feel safe or respected at work if they do not feel included. You can see that our objectives for 2025 mean that by 2025, every senior executive organ of the company, starting from the Executive Committee down, will have 30% women represented. And also by 2025, our senior managers -- 40% of our senior managers and 45% of our senior executives will reflect the diversity of countries in which we are present. We are over 100,000 people in more than 130 countries across the world. So we intend for that to be reflected with respect to the representation of people outside of France. On this slide, we have talked about people with disabilities, because at TotalEnergies in the past 5 years, we are very proud of our achievements and the work that we have done with people with disabilities, very much focusing on inclusion. What we have learned from this journey is that despite the fact that we are in many countries, including France, where we cannot ask people to declare their disabilities, our ability to create an environment where people feel included and heard increases the ability of people with disabilities to actually declare themselves because they are confident that they will be seen and included. And it's something that we are -- that our people are extremely implicated in, not just here in France and in Europe, but really across a lot of our affiliates across the world. Let's move on to talk about the people who work or live in or around our industrial projects. In terms of our respect for human rights, for those of you who are familiar with the United Nations' guiding principles, you will see that we have done the work to identify what are salient issues in human rights are, very much based on the kind of businesses that we run, as well as the risk profiles of the different countries in which we operate. Our first group of salient issues is with respect to human rights in the workplace, where, of course, we need to provide a just and adequate working environment for people who work for us and also people who work for us via our suppliers. And we also focus particularly in some of our countries where we have identified a risk of child labor and forced labor. And we make sure that in these countries, our employees are very much educated and trained to this risk, to keep their eye open for this risk and for this possibility. We follow up with assessments, not only of our suppliers, but also of our own organizations, our own offices and businesses in the countries which are exposed to this type of risk. Our second group of salient issues are with respect to human rights of our local communities. And these very much concern the people who live and work around our assets. There are several issues that could be involved, ranging from the right to health, the right to an adequate standard of living and of course, access to land. A couple of examples over here. First of all, in Uganda with relation to our Tilenga and EACOP pipeline and the relocation program that is associated with it. We have, between EACOP and Tilenga, over 90% of the compensation agreements that have been signed for people who need to be relocated and a very robust grievance mechanism that we consistently review and make sure that we have a dialogue with the people who are concerned and we work hard to be able to resolve all of the complaints. In Mozambique LNG, we are going a little bit further. Patrick already mentioned it when he spoke about Mozambique LNG. But we have decided that we have named a recognized independent third-party expert to do an evaluation of the human rights situation in Mozambique LNG and will be working proactively and in anticipation of the kind of work that we need to do and the groundwork that we need to lay in order to be prepared when we are ready to make the investment decision and start our operations and our work over there. And our last, I'd say, group of salient issues is based on security-related activities. We have several projects in rather remote areas, in Papua New Guinea, for example, or in Mozambique, where we need to ensure that the people who are working on the construction of our facilities and later on, in the operation of our facilities, have adequate security protection. But that means we also have the responsibility to ensure that the people who provide such security do that in a respectful manner without the violation of human rights. We actively apply the principles on security and human rights. We have a very, very robust training program for people who provide security in our assets and also accompanied by a grievance mechanism to make sure that we are catching any issues that may come up. And last, just to take the comments of Helle a little bit further, we are working actively to engage our suppliers. In 2022, TotalEnergies had goods and services worth $27 billion coming from over 100,000 suppliers across the world. That means that we have an enormous opportunity to promote sustainability all across the supply chain and we are taking that opportunity very seriously. There are some concrete examples here that we'd like to share with you, which are developments and acceleration of ideas that we have had over the past couple of years. First of all, just as an example, as far as GHG emission reduction targets are concerned, we have decided that by 2025, 400 suppliers who represent approximately 70% of our Upstream Scope 3 emissions will have to themselves set GHG emissions reduction targets. We started the work about a year ago. We sent out questionnaires. We have 350 suppliers who answered and 62% of them who have already set these targets. For the work that we have done in this, we are very pleased to have received an A rating by CDP in terms of the supplier engagement work that we are doing. We also believe that we need to work with our suppliers in a duty of care. We talked about human rights and we started a few years ago a program to audit our suppliers on human rights. 200 suppliers have already been audited and the program will continue. But we have also decided that we would like to extend the scope of this audit beyond human rights. We would like to include climate. We would like to include environment. And the goal is to be able to assess the overall sustainability of our top 1,300 suppliers by the end of 2025. Now we do all this not just by audits and audits and audits, but we also do this by ensuring that our own people who are in charge of procurement understand what it means to do sustainable procurement. So that means we have to train our people internally as to how to manage that. And we also work very closely with our suppliers to help them understand what it means to achieve these goals and how to get there. There are a large number of our suppliers, many of them are smaller in developing countries, who sometimes may have had issues with respect to what does it mean to provide an adequate and a just work environment, for example. The objective of our audit is not simply to just strike them off our supplier list. We wouldn't be doing anything positive, I think, either for the people in those companies, if we simply did that. The objective is to work with them to help them improve their standards and to help them find ways of being able to match the objectives that we have. So that is all that I wanted to say for this afternoon. There's a lot more information in the report that I hope that you all will be downloading. And I now hand over to Jean-Pierre.

Thank you, Namita. And the last section of this Zoom is on profits and the resilience of our financials to climate-related risks. So Patrick already presented the graphs on the left-hand side of the slides, but we decided to present them again because it's -- in our view, it's a perfect illustration of the resilience of the portfolio. So you see how our portfolio is positioned on the global oil supply cost merit curve, that means that even in scenarios in which oil demand could decline, we will be resilient. Another topic to assess or to test the robustness of the resilience of our portfolio is the sensitivity test we performed -- so you see the 2 scenarios that we consider in 2022. The first one, what we call the IEA NZE scenario, so we used the price deck, the '22 price deck IEA NZE to assess the impact of this scenario on the net present value of our portfolio, compared to the reference scenario we used to sanction our projects. And you see that by using this scenario, the impact is quite limited, less than 15% loss in NPV7. The second sensitivity that we used for obvious reasons. So we assess CO2 price at $200 per ton. So the reference price is $100 per ton. So we increased by $100 per ton in this scenario to assess once again the resilience of portfolio to this assumption. And you see more or less the same impact, an impact minus 15% NPV7 on our global portfolio. We have already mentioned that we have a low cost. We have a low emission portfolio. So you see, again, the metrics, the operating cost among the best in class, so $5.6 per barrel in 2022 and the Scope 1 and 2 oil and gas operated emission at 17 kg CO2 per barrel. So it's not rocket science. So it's a competitive advantage. So if we want to keep this advantage, we have to sanction projects using strict investment criteria. And so I will not repeat the criteria we used. Patrick already mentioned that. So $50 per barrel Brent, $100 per ton for carbon price. And of course, each project must be a low-cost and low-emission project contributing to enhance the portfolio to increase or to improve the emission intensity. And so we at TotalEnergies, there is no surprise. So we use the criteria to sanction our projects in 2022. You see the results. You have here on the left-hand side of the slide. So the 12 main projects that had been sanctioned in 2022. And of course, each project are in line with this criteria. So let's move to the financial statements. We have financial statements. We have accounting principles that are aligned with our climate commitments. So in 2022 -- but it was the same in 2021, by the way -- we have focused on different parameters to ensure these alignments. And so with our external auditors, we prepared reports on key parameters or 4 key parameters to demonstrate these alignments. And of course, the 4 parameters, first is the CapEx allocation. The second is the depreciation, how did we amortize our assets. The third one is asset requirement obligation and for obvious reason, the fourth one is impairment testing. And so you see here that in 2022, it was the same in 2021, by the way, we used price scenarios to test or to calculate these impairments, price deck converging towards the price used by in the NZE scenario towards 2023 -- 2050 sorry, for both oil and gas. We used this CO2 assumption at $100 per ton and we, for a matter of transparency, we gave -- we disclosed all the sensitivity in relation with prices, in relation to refining margins, to once again demonstrate the robustness and the resilience of our portfolio. In 2020, we made a full review of stranded assets. So that means assets that have reserves above -- beyond 20 years and with high technical costs. And it's led at that time, to an impairment of $5.5 billion on Canadian oil assets. And so there is, I think, an underlying message in that slide, so with the Japanese garden. So I am a Zen [indiscernible] because I can tell you that you can be comfortable. We have a balance sheet that is protected from new stranded assets given the capital allocation we have and the rigorous and the very stringent impairment testing that we implemented since a couple of years.

In fact, I selected the photo. It's true. I told him that you put the Kyoto garden, Japanese garden and he has to deliver the word Zen in the presentation. So congratulations.

Thank you. So a few words on TCFD.

So you know we have fun sometimes.

So a few words on TCFD. So we are a pioneer, in fact, in implementing TCFD recommendation because it has been done in 2017. We think that it's an efficient tool to identify, to assess, to manage climate-related risks. In 2022, we updated our risk mapping with the Board. And so you see here is an extract of the main TotalEnergies' risk mapping evaluation with climate issues and how it's comparable to the TCFD reporting. Of course, as you can imagine, we have internally different committees to ensure that this system monitoring the risk is working well. And so we have at the level of the Board's Audit Committee, regular discussions regarding the efficiency of this risk management system. And for Irene, I think I have my last slide on EU taxonomy. So in 2021, so on the previous year, we reported CapEx eligibility figure, but also, and I think we are one of the first company to do that, the CapEx alignments. Of course, we did the same exercise for 2022 and you see the result. By the way, we decided, of course, to give the figures consolidated view as requested, but also to give a proportional view, because we think that it's more relevant in our activities and particularly given the business model we use to develop our integrated power business. So you see the progression. You see the increased eligibility alignments, clearly supported by the CapEx allocation that Patrick already mentioned to you. By the way, the main difference between the -- the CapEx eligible and the CapEx aligned is the [indiscernible] investment that we did in 2020, because it's very -- because by construction, I would say this CapEx are eligible, but it's quite impossible to have this CapEx aligned because the threshold put by EU to have this CapEx aligned is very -- is quite impossible to achieve.

No, it's not impossible. It requires Stephane to produce plenty of biomethane or hydrogen in order to feed the power plant, but it would be even more expensive to make power. So we have time. One day, it could become aligned.

And to answer to your question, Irene, more specifically, the $1 billion that we will devote to energy saving program. But the limit of the taxonomy given that this CapEx will be spent on non-eligible activities, so E&P and refineries, will lead to the fact that this CapEx themselves will not be eligible. So the impact will be marginal on the taxonomy. That's the limit of the taxonomy, so obviously, were not driven by this report. That was my last slide, I think.

So thank you for the Zen. Renaud? With glasses. Do you have any questions? As a complement to the first row or anything?

Henri. I see Henri raising the hand.

Henri Patricot from UBS. I wanted to ask you about the procurement and the integration of the greenhouse gas emission reductions in there. Is it plan ultimately that there will be some sort of criteria around how quickly the supplier reduce emissions when it comes to selecting these? How are you thinking about that longer term?

Namita?

Yes. I think -- I mean as you saw that we've started this exercise sort of a few months ago. Our first criteria is to ensure that people actually do have reduction targets. I think once we are able to work with our suppliers, as I said at the end of that presentation, we need to work with them. The idea is not to be sort of -- it's not a punishment. The idea is how do we embark them on the journey with us. And so I think that as time goes on, we will be able to become more and more stringent and that should be our goal. I mean we can't just have something which is not meaningful. And then once they start being able to achieve their targets, we should have the role of pushing them to do better. And I think that is the objective that we have.

I think it's a [ equipment of ] stewardship, like it was written for large corporations like us. We have to be stewards. So the fact even that we ask the question is important. The fact that we discovered 60% of them are already [indiscernible] is also important. By the way, I received some questionnaires from some of my customers to me. So I know it gave me the idea to revert it. So I sent a nice letter to [indiscernible] to explaining by the way, that we are an oil and gas company. But -- so we have climate targets. But I think it's important. And then again, I think the whole system will -- it takes action. So if the value chain is asking itself. And at the end of the day, for me, it's a Scope 1 and 2 of all that, that we need to drive -- and again, I think it's a lot of corporations, so 60% is not bad, but the others will have to follow.

We said by 2025, okay, for the top 400. Namita's chart, so we give them a little bit of time, of course, because one thing is to be aware, another thing is to elaborate a plan that is credible and everything else. So I think it's fair, but...

In fact we are going further, because this was a reporting at the corporate level, the top 400. In the sustainable criteria, are local teams -- they have to do the same locally with their own suppliers. So it's much smaller. I think some of them have chosen, have selected more than $50,000 per year, which makes not very large, some $10,000. So the idea -- and then the idea is to count the number of suppliers locally, which are -- have some commitments. So the dynamic is not only coming from the top with a large corporation, but also on a bottom-up approach for -- and so it's one of the KPIs, just to -- and maybe we'll have some nice stories to engage and I hope some success stories to engage some local suppliers on this idea. So we do it on both levels.

And as Namita said, the response is positive, because guess what? Our suppliers are also aware of what's going on and they have their own sustainability road maps. So it's a win-win.

Justin Kew from Balyasny Asset Management. Two questions. Well done on getting the sites to sort of look at nature, biodiversity. Interested to hear how you measure biodiversity impact. So it's a big question. And second question on taxonomy. So I realize that you're eligible is 34% and that your alignment is 31%. So what's that 3% drop? What was it in the...?

It is the gas-fired power plants. In Europe, there was a fight at the EU level to know if gas-fired power plant were in the taxonomy or not. They are eligible, but to be aligned, you need to use them with less than, I think, than 180 nanogram of, I don't know what, which is obviously not natural gas. So why there is a limit of it. So either it is CCS that you have to put on it or you have to burn biomethane or you have to burn part of hydrogen. So that's why there was a long political debate. The result is yes and no. The first question -- I'm sharing notes with French association for environment in industries. We are speaking, we work a lot on biodiversity and there is no real measurement of it. It's difficult. You can measure the DNA in the drops of water on your site. There are ways to make -- but it's one of the complexity to report. I know that for you, you are willing on all your ESG part to try to transform this biodiversity in an aggregate, something synthetic. I think it's easy for CO2, and it's one of the difficulty to action on it. When we ask ourselves, what could we have done at the corporate level, say, let's have some action plans. It's pragmatic. To measure it for the time being, it's a sum of -- because it's complex, in fact. So no, I'm afraid we didn't find it. You can find for part of it. Again, when you speak about net zero deforestation, we decided it's by hectares. We had a long discussion of how do we measure it. Some people came to us, you should evaluate the biodiversity, otherwise you will destroy it, you replace it. But you know, how do you measure. So we said, okay, let's make a simple measurement by hectares. It's not perfect, but at least there is a sort of guideline in the company. And it's true -- but when you manage such a company, not being able to transform a concept into a KPI makes the action more complex. So that's why what I proposed for the time being, let's embark the people, culturally. Let's have some success stories. There was, you will see in the report, I think there is a nice success story, I think in Reunion Island, about a wind farm. But I see Catherine Remy, who is there, who is in charge of the nature and environment. She came to us with 5 different topics, we selected 1. So the idea is to go by example. We dedicated this environmental day to biodiversity. We make some trips in forest. Myself, I went with my teams. It was okay. You -- so it's a way to -- I mean the people to understand what it is about, but the measurement is complex, it is. So I'm afraid for you farms, it will be not so easy to translate all that in a synthetic parameter KPI.

But have a discussion with Catherine on...

We are working on what they call the -- probably it is the same, but TCFD on the -- TNFD, which could come, but it's the same thing, more as a framework appraising the risk. And like TCFD, it is not -- in the end, it does not give you a synthetic element.

And we are a part of TNFD.

Okay. Other questions? I'll look out. I think there was somebody in the first row, but I didn't see.

Sorry, it's a question based on ignorance, but can you just describe what proportional means? What it's incorporating?

Consolidated, it's consolidated and proportional, you take your share of all the JVs and you multiply by your share. So when you have SMEs, you take -- in SMEs, in equivalent, you to take the proportionate share.

Okay. And can you give us any indication then, of the breakdown of how much of the 34%, et cetera, of taxonomy aligned is aligned with -- or is associated with the element that goes to...

It's 34% of a higher figure, but not CapEx figure. CapEx is consolidated. So when you make proportionate, you have not -- because in CapEx, you have the equity part, you don't have the pure proportionate, when it's financed, but it is why it's more -- it makes more sense for us because we have a lot of financing, project financing on all what is chemicals, renewables. So when you look at proportionate, you take the full proportionate part, but you take -- in terms of consolidated, you take only the equity part. And as renewable, the project is generally developed at 20-80 or 30-70. You have more CapEx in a proportionate view.

Sure. And the second question actually goes back to the first presentation, if I might. Just in terms of storage, Patrick, regarding your electricity chain, why is 5 gigawatts the right number or the number that you've decided on?

That's a complex question. Ask Stephane. I asked the same question to him. So we are -- it is a debate.

Okay.

So we try to know it. Honestly, we are working on it, how much should we develop in order to cope with the intermittency? We want to keep merchants. So at the end, they came with a nice memo and we say, okay, 5 seems to be it for us. We have looked to what some utilities are announcing. It does not seem to be inconsistent. It could grow in the future. I'm not sure it's enough. I'm not fundamentally sure it's enough. But it's back to how much we develop.

Oswald? Yes.

Yes. Just on LNG or at least your ambition to grow gas, the emissions from gas going up are okay. But how do you account or how are you thinking about Cameron and Costa Azul, where you're sourcing gas from the grid system in the U.S. and whether those suppliers are obviously reducing methane leakage and the associated emissions? And in the 2030 targets, is there anything embedded for future equity LNG that you might be thinking about?

Between Cameron and Costa Azul, we are a partner of the plants. So we account in our emissions when it's proportionate. Where it is in equity share, we account our equity share of the plant. If we go Upstream to integrate, which probably we will have to do, because the larger we are -- I like to have an edge in my portfolio between production and LNG, then we will count for the emissions of our production. So but again, you don't produce -- when we look to the emissions of our Barnett Shale, U.S. Barnett Shale, today, it's quite low. So I'm not afraid of it. But it's part of the equation. So again, it's part of this 48 million ton. So if I want to do more, I have to abate more. It's not complex. But I think this is, honestly, of Scope 1 and 2, no problem to take that constraint. I think we have to accept it. By the way, look what we have done on the gas-fired power plant. We have increased the gas-fired power plant, it's adding 7 million tons -- no, 9 million tons, I think -- or 7 million tons, sorry, it was in the slide. We didn't complain with it. We introduced it in our target. So to us, to be consistent.

Questions? Yes, Irene?

Thank you. I haven't obviously read yet the '23 sustainability report. But in last year's report, you made a very strong statement that neither global energy demand trends nor energy efficiency trends on the demand side were aligned with what is needed for net zero. And then Russia happened. And I wonder what your view is in this year's report. Has there been any noticeable change? Any acceleration to energy efficiency that is worth highlighting?

The energy efficiency has gained some momentum. That's clear. The question is it demand destruction or is it really energy efficiency? We are still, today, when you look to the consumption in Europe, it's difficult. That is also because of high prices, some demand destruction, which could come back. Because what we observe today in the market in Europe is that we were wondering why the diesel was not stronger. The spread of the diesel despite of the Russian ban did not increase, even was a little lower. And in fact, what we also observed in the statistics of Stephane, gas consumption in Europe, you have an increase of gas demand for industrial sector in Europe. And in fact, it's because you have some shift, you have some manufacturing industries, which last year when the fuel -- the gas went up as an average to $200 per barrel. So fuel was around $100 per barrel, $120 per barrel. They shifted from fuel to -- from gas to fuel. And now this year, they are very active and they shift back from diesel or fuel to gas. So it created an additional demand. So it's why this demand destruction is not energy efficiency. Having said that, it's also clear that what we are doing with spending $1 billion -- other companies, I think, are spending money -- to say because you have a return. So that's changed the perspective. The question will be, does is it really -- is it sustainable? Because I remind you that we were on the world basis, on an average energy efficiency of 1% to 1.5% over the last 20 years. The scenario net zero requires almost 3%.

4%.

4%. Sorry, I was 3%. [indiscernible] So you don't change like that from 1.5% to 4%. It's not true. So it's why we think that -- and by the way, the reconciliation, 2023 is a net zero scenario, oil demand is 93 million barrel of oil per day. It's -- you look to the figure. And the IEA has announced that this year we have significant demand, might be as high as 102 million barrel oil per day. So there is a gap of 9. So this is a full debate about our story. Again, the endpoint is okay. But after we reconciled the beginning of the curve with the reality of the planet. And nobody wants to answer to us to that. Now by the way, I understand [indiscernible] is preparing a new report. He had told me that. We were at the IEA. He is announcing the new report. And I think part of the report before COP28 is to try to reconcile the first 10 years with the rest of the story. So let's wait to see. We raised that to him. You need to -- if you want that scenario to be a reference for everybody, not just a reference for, I would say, that which [indiscernible] criticize because that has to fit with the reality on the short term. Then let's look to see. So he told me that he will work on that and he has announced that to the IEA minister, we were there last week. So we'll see. So we continue to state in our report that we need new greenfield oil to fill the demand. So we are a little stubborn on that. By the way, you have an interesting chart on the report, where we put -- we look to the [ oil ] part on the NZE and the APS. APS scenario of IEA is at 1.7 degree. And you look to the chart, you will understand, it's true, but this 0.2 degree makes a huge difference. And it's also true that we have the impression that the world is probably more on one line than on the other line. Having said that, I hope the world will manage to get at 1.7 degree or 1.5 degree and not a 2.5.

Any further questions, last burning question? No, apparently.

So we are like clocks. We said -- we made a bet with ourselves, it will last until 5:30. You are perfect guests. Perfect guests and we can only thank you for that.

For the conclusion, Patrick?

No, I think in conclusion, I think, first of all, thank you for having participated to our event. I hope -- I would like to, by the way, to get some feedback. So the fact that we have organized our presentation between the one in February, this one in March, which again, is linked to the Board work. So it would be interesting after 2 years to have your feedback on the content of what we present to you. And again, I think we consider that, of course, we are in charge of the company, but TotalEnergies is really an active player, growing our energy, being really active and more than active, really investing, in fact, in this energy transition, but also because it's our mission to continue to deliver the energy that people need. So thank you again for your attention.

And thank you for everybody that participated to the report, whether they listen to us or not. A very warm thank you to everybody in the company that participated.