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

[Presentation] Good morning all. Welcome to Repsol's Seventh ESG Day. My name is Ramon Álvarez-Pedrosa, Head of Investor Relations. I'd like to thank you, Deutsche Bank for allowing us to use these fantastic premises for this event. It is great to be able to resume this annual in-person years even following the 2 years hiatus caused by the pandemic. On behalf of our CEO, executives and management team, we hope the presentations today will provide insight on the progress we are making on various ESG commitments, and our strong conviction that Repsol is well positioned to thrive in this complex environment. Before we move on, I'd like to remind you to look at our disclaimer page display on the beginning of its presentation. And therefore, I invite you to read it. In terms of logistics for today's event, there will be a midmorning break at around 10:30. Furthermore, a Q&A session is scheduled at 12:00. This will be followed by an informal lunch at around 1:00 p.m. in the room you already have breakfast. And we invite everyone to stay with us and use this opportunity to talk to our senior management and Investor Relations team, who will, right after this event will embark on an investor road show meeting investors in London and in Paris. Today, our CEO, Josu Jon Imaz, will be touching upon the topic of a Just Transition and its impact on industry and technology. This will be followed by three main themes: the role of existing and emerging technologies and the importance of technology neutrality in the energy transition; diversity and talent strategy; and finally, climate frameworks, transparency and [ 1.C ] degrees scenarios. Without further ado, I will hand over to our CEO, Josu Jon Imaz.

Good morning, everybody. It's a real pleasure to meet you again in this Repsol ESG Day after 3 years. 3 years that has -- they have been hard for everybody. They were hard in personal terms in many families. There was hard in terms of our societies. And I mean to see you again, to meet you again back some of you after so many time. Let me say that this a real pressure even in emotional terms to going back to the normal. But it's true that this normality, let me say, is happening in the midst of another deep crisis. Another unprecedented situation we are experiencing today after the Ukraine invasion and the current geopolitical arena, that is in some way reshaping the energy sector is putting the energy supply and the security of supply at the very heart of the energy policies. And in some way is bringing security of supply at the core of any strategy of energy transition. And all this event, everything that is happening is in some way reshaping the pace of decarbonization and is rebasing the assumptions of energy demand. And let me say that coping with this situation is going to require a joint effort of companies, governments, and the whole society to ensure an efficient, a reliable, a safe delivery of energy that is essential in these circumstances for families, for citizen, for the industries that work in our continent. We are now approaching to the end of the second year of our strategic plan, 2021-2025 and a strategic plan that we presented in the midst of the pandemic in November 2020. Let me say that we have delivered the key targets we had in that strategic plan. And our transformation is based mainly in two elements. First, the decarbonization of our legacy portfolio fostering value creation, improving the efficiency of these businesses. And at the same time, guaranteeing the long-term sustainability of this legacy business of the company. But at the same time, we are delivering a new operating model. We are building low carbon platforms to grow and to guarantee and support the acceleration of the energy transition in Repsol. And let me say that energy transition has to be faced with ambition and greater termination. And that is a big challenge because in some way it implies both risks and opportunities and cost. And the challenge is some way is two-fold. We must work to transform our society. We have to be able to become a neutral zero emission society by 2050. But at the same time, we have to be able to guarantee and supply the energy that our citizens and our society requires as of today. And it's, I mean, commonly accepted that the well being of our society, and I think that we are unfortunately experiencing this reality these weeks -- months, and we are going to experience this reality in coming months that we have to promote this well-being of our societies. We have to guarantee the security of supply. We need accessible, competitive and sustainable energy that is going to support the economic and the social development of our society. And let me say that the key issue is to -- I mean, to face this challenge, leveraging on the industrial and technological capabilities we have, without sacrificing the standards of life and the well-being of our societies. But at the same time, we have to guarantee the opportunity of the next and future societies to experience and to have the same well being we have been able to build over the last decades. So the energy transition doesn't represent for me a disruption that destroy the past achievements. In fact, I think that this is a journey. This is a journey with a clear starting point. Starting point is the current energy mix we have that has served the planet for decades that is behind the well being we have built in our society over this last century. But we have a destination and the destination has to be the target to be net zero emission by 2050. And in this journey, we have to be able to decarbonize the energy mix. And let me say that we are not talking about ideology or dogmas. We are talking about working and uncertain, but we have to invest heavily in technology and in new assets over these periods to get this target we have by 2050. And we have to move the world towards a less carbon-intensive energy. And our case is very clear. I mean, I remember that in 2012, we were in some way trailblazer when we achieved an agreement with our trade unions, creating or establishing or settling a new variable bonus for all the workers of industrial plants of Repsol, 7,000 people linked to the CO2 emissions of refineries, the units, the chemical plants and so on. You know that in 2019, we became the first oil and gas company with a clear target of getting net zero emission by 2050. But at the same time, we were able to define and to establish our comprehensive, clear pathway to get this target defining a Carbon Intensity Index and with clear milestones in this pathway, I mean, with the commitment of reducing 15% of this Carbon Intensity Index rate 2025 at 28% by 2030 and a 55% by 2040. So the goal of our strategy -- the driver of the strategy of Repsol is this target of getting net zero emissions by 2050. And each of our business is fully oriented in its strategy, there is a strategy that we have set to get this objective. So based on these convictions, I'd like to share some additional thoughts today about how to approach the energy transition in this complex and tough time. I mean, my first thought, we have and we must guarantee the security of supply. Security of supply means that we need to guarantee the energy that the world is going to need in coming years and in coming decades. And we have to do that at a competitive cost. I mean, what we are seeing now in many European countries with families that they are not going to be able to afford the energy bills in coming months. I mean that is not sustainable. We need security of supply, and we need competitive prices. And let me say that, that is in moral terms, the first responsibility that an energy company has today in this time, we are experiencing. And at the same time, we must guarantee production. And we have to guarantee the access to all kinds of energy without demonizing it. Not doing so will mean facing the energy transition in a misguided way. We have to take an approach that has to be driven more than by ideology has to be driven by technology. In fact, I mean, the stigmatization and following some dogmas could be popular in some European countries. But I have to underline that all that has increased the risk of security of supply, has provoked a delay of investment in many sectors in the primary energy mix and this situation has driven an imbalanced situation between demand and production. And Europe has given up producing our own hydrocarbons despite having natural gas, and that is a big mistake. And we have gas in our subsoil in Europe. And we have increased our dependence. And in addition, this single-minded commitment to electric mobility will make us dependent on raw materials and on Chinese precious metals. So we can't build the dependence of the future after suffering the dependence of the current gas situation in Europe. And Europe, from my point of view, has adopted a clear strategy of guarantee of supply and we have to avoid any energy dependency. And to do that, we need diversification. And I want to be very clear. And I say that from the full commitment we have as a company and we have had as a company over the last years and decades, security supply and avoiding disruption won't delay the energy transition. On the contrary, it will accelerate a continuous, progressive transition towards zero emissions at lower cost to society. And let me say with the support of the society because we need the support of the society because otherwise, we could put at risk the energy transition, and that will be a double dramatic situation. First of all, the current suffering. And secondly, we will be building a new suffering for the next generation, not being able to address the problem we have as our planet. My second thought, the transition must protect and reinforce the European industrial base, including industrial skills, capabilities and employment. To develop this energy transition, we need an European robust industry. I mean -- and there are another, let me say, more social and economic reasons to defend the European industry. One of them is that industry generates jobs, generates a stable quality well-type jobs for young generation. Is industry -- I mean when I'm talking about the industry, I'm talking about the whole European fabric, is nurturing an environment of science and technology, and we need this ecosystem of science and technology to thrive in the energy transition. Otherwise, we are not going to have a real transition. And in order to solve this industrial problem, we have to take into account in Europe that CO2 is a global problem. I mean I'm going to be, let me say, a bit provocative. CO2 is not a [ guest ] with local impact. I mean, the emission of that CO2 molecule here in London, I mean Shanghai is exactly the same for the climate in the planet. This is exactly the same for the climate in London. So we have to understand that in Europe, we are not reducing emissions if we are taking them and shipping them under the carpet, and we are exporting CO2 emissions, we are exporting industries, and we are exporting jobs to some other continent. And to do that, we have to understand and European authorities, they have to understand the concept of net emissions. That means taking into account the whole value chain, that whole carbon footprint of products and direct emissions. So they are the emissions that are emitted in the European Union. And this -- I mean, this clarification is crucial from my point of view. Because -- I mean, what is happening now in Europe with many industrial sectors is that competitiveness is damaged by high CO2 prices. That is okay. And in favor of CO2 prices, but if we don't have any kind of border adjustment and that is not happening, and it's going to be very difficult to happen in coming years. But we are pushing this to export these industries and in the whole equation, we have increases the CO2 emissions in the world because in many cases, I mean, the export of these industries and these jobs provoke that we import these products that are produced in a less efficient way with a higher CO2 emission level. And after that, we have to transport these products to Europe increasing our total carbon footprint. So we have to take the picture of the total carbon emissions in Europe. There is, from my point of view, another big mistake in this debate. That is the identification of decarbonizing and electrification. I mean our goal has to be to decarbonize our society, not to electrify it. Electrification is a part of this equation because a lot of sectors of the economy are not going to be electrified in coming years, decades, taking into account the -- I mean, I prefer to be humble because things could change. When we are talking about technology, things could change in the future. But with the current foresee and the current knowledge, we are not going to see in coming decades a real electrification of the aviation sector, the maritime sector, heavy trucks, many industrial sectors of the economy like the chemical business, steelmakers, paper mills and so on. So this sector, I mentioned, they are going to be more than half of the economy in coming two decades. So if we put all the focus only in electrifying, the economy is going to be okay, but we are going to be decarbonizing half of the economy. And we don't want to decarbonize half of the economy. We want a solution for the whole economy to be decarbonized. Otherwise, we are not going to have a solution for the planet. And to do that, I know that, that is a complex and it's not an easy task, but we need new efficient and sustainable renewable fuels because all that is going to be crucial to decarbonize all these transport sectors I mentioned before, and to decarbonize many industrial sectors. And I mean, I firmly believe that without these renewable fuels, and I'm talking about liquids and gases, Europe is not going to be able to achieve the carbon neutrality goal by 2050. And this helps, technological neutrality is crucial because these technologies that are going to help us to decarbonize the world, I mean, they can be seen as an antagonist. I mean, I'm clearly in favor of decarbonizing, the electrification of the company. I mean we have, let me say, and being very humble, but we have the credibility to say that because we have built over the last 3 years, I mean, a quite significant electric power generation business. But we have to go ahead and we have to do additional things to do that. And we have seen a very strong technological evolution in many fields. All that is happening, of course, in power, renewable technologies, is happening in batteries. It's happening in hybrid vehicles, is happening, of course, in electric cars, but it's also happening in combustion engines, is happening in advanced renewable liquid fuels, is happening in hydrogen and all that is having and experiencing a dramatic cost reduction over these years. So what I'm trying to express is that we can't determine which technologies or which combination of them will be the winner in the long term. So in this transition is essential not to turn down certain technologies driven by our own perception that we are going to see winners and we are going to see losers. The target has to be to reduce as many CO2 tons as possible at the lower cost for citizens and of course, with the greatest impact, positive impact on industry and employment. I mean, I'm going to be also a bit disruptive just in case a lot what I'm saying now. I mean, the European Union that is going to put is going to impose a ban of the internal combustion engine by 2033 -- '35, sorry, is, from my point of view, a big mistake because de facto is disabling the effective deployment of technologies that could contribute to decarbonization. I mean all the effort in terms of improving the combustion engine. All the effort we need to develop this circular value chain to produce sustainable fuels. I mean to have all these technologies work in this direction will be a great driver to decarbonize the economy. And having, we need the development of all these circular economy, raw materials, urban wastes, agricultural and forestry [indiscernible] fuels, we need to feed the combustion engines of the future because we are going to need them for the emission sector for heavy trucks and so on. So we are in some way losing opportunities to contain and reduce the CO2 emission level. And I want to be very clear when I'm talking about combustion engines, I'm talking about combustion engines able from 2035 on to fuel these engines with net zero emissions over the whole cycle of this vehicle, less technology working in this direction. My third thought after transition with social progress. I mean, it's not enough to emphasize the environmental and economic advantages of the energy transition. I mean we need an energy transition that will be able to be paid by citizens with the cost, the price of carbon that citizens could afford. And now it seems that the cost of this energy this winter is only consequence of the war in Ukraine. Let me say that, that is partial truth or a partial lie, as you like. Because what we are dramatically accelerated now was happening before the Ukranian invasion. I mean, if we analyze the gas prices in December 2021, I mean, it's turned at the $75 per million Btus they worth were not there, but [ $45-$50 ] were there before the Ukrainian invasion. And the last summer, for instance, in 2021, the power price in Spain was similar to the current price we have now in August 2021 and the oil price was in November 2021 above $80 per barrel. So I think that if we simply reject oil and gas, as a position, what we are promoting is clearly a lack of investment in this sector because the incentives to produce hydrocarbons are reduced. The consequence is that families can't pay this energy. The consequence is that we are polishing our industry -- our industry, I mean the demanding sectors and the consequences that we have to burn some other energies with higher CO2 emissions because people can't afford to use gas to produce power. So all that is really already happening with a severe impact on households, economies and industrial competitiveness. So a Just Transition is a concept that also involves guaranteeing on an adequate way, the supply of energy, including hydrocarbons because we have to meet the current needs of our society and the future needs. And from my point of view, these decarbonization policies, they have to be very sensitive to our social policies. I mean, we can't promote very aggressive policies. I mean, I'm fully engaged in favor of the electric vehicle. As responsible of the new energy business of Repsol in 2009-2010 I was in charge of launching the first electric vehicle return in service in Spain 13 years ago, and we are leading today this market. But that is a part of the solution. It's not the only part of the solution because, I mean, if we subsidize vehicles for people with revenues above EUR 100 per year, as a second or a third vehicle, that's okay. But a lot of people in our countries, they can't afford buying an electric vehicle today. And they are driving all cars. Today, the main emission problem, for instance, in my own country in Spain is not the diesel, the gasoline or the electric vehicle, it's the old vehicle. It's the old car fleet before the 2008-2010 crisis, the car fleet coverage in Spain was at around 8 years. Today is 13.5 years. So -- and I'm very sad saying that, but today, the most dynamic car market in Spain, unfortunately, is the second-hand diesel cars and mainly because, I mean, people they don't have any kind of support to buy a new car. I mean only substituting old diesel by a new diesel could reducing that 30% of the CO2 emissions of the car, taking into account the current technologies and 84% nitrogen oxide emissions and 94% the particles emissions. And I mean, what we are developing in many cases these are aggressive policy that is impacting in a negative way on many social sectors of our society. And let me say in this -- and if today that is my concern, it's not only because we are experiencing a hard economic and social situation in Europe is because we need the support of our society to thrive with the energy transition. Otherwise, we are not going to be able -- in this combination and common work of governments and companies, we are not going to be able to thrive in this energy transition. We need the support of the society to do that. And we are ready to do that. And let me conclude I mean, emphasizing that Repsol is fully committed with the target of being global carbon-neutral by 2050. And we have to do that a clear strategy. We have a streamlined organization that is prepared to this target. We have the right operating model to do that. We have the carbon platforms to grow and to get this objective. And I think that we have the team of people that is ready to make it happen. Our strategy is based on a multi-energy approach. We want to be a provider of all kind of energies, an approach that is multi-energy, but at the same time, combine a hard decarbonization process of our legacy operations, the growth on renewable electricity generation. We are fully committed in this target. And what is also important because talking about liquid fuels is not only blah, blah, blah. It's a huge commitment as you are going to explain later, Tomas, to decarbonize our industrial sites. We are changing the concept of refinery. I mean, oil is going to be less and less the only feedstock, and we are going to have some other feedstocks to allow us to reduce in a dramatic way the carbon footprint of the products. We are going to sell in the future for these combustion engines, either from the aviation sector, for the maritime one, for heavy trucks and why not for cars. And let me emphasize that the acceleration of the energy transition towards climate neutrality and that is our target to try to accelerate this transition requires to have a transition just for all, a goal that will be better achieved by guaranteeing the security of supply for everybody, an affordable and cheap energy for everybody. And of course, when I'm talking about these parts of the triangle, I do that because I believe on that, but because I have a full commitment about the third one, that is a sustainable part of the equation, is the target of being net zero in coming decades. We can't -- in any way, we can't get rid of this target. That is crucial for guaranteeing the future of future generation. But let me say, we need the support of the society. We need the support of public powers and we need the support of public policies to have enough coalition in our society to thrive towards these targets. So thank you for coming here today. And it seems to me that we have the opportunity to discuss about these things and perhaps some other more practical and interesting over the whole day. Thank you.

Thank you very much, Josu Jon. Now we are going to have Javier Ariztegui with us. Javier is a mechanical engineer and holds Doctoral degree from Madrid Polytechnic University. He has served an extensive 20-year career at Repsol Technology Lab. He's now senior manager responsible for the development of energy products and services. Javier's presentation highlights the importance of technological neutrality, and he will elaborate on how Repsol is leveraging on technology to accelerate each transition and which are the most disruptive developments across our different platforms. So Javier, the floor is yours.

Good morning, everybody. Can you hear me? Thanks for this opportunity to show you how we put technology in the center of our operations as our CEO has just mentioned some minutes ago. My presentation will take us in the following minutes through three topics. The first one is why we say technology should be a key ingredient for the energy transition. The second one is reflection of what our current capabilities are, how we approach this technology development within Repsol. And then we will cover four examples of disruptive technologies, which are happening today and which tackle some of the biggest challenges we have ahead of us. One around hydrogen, the second one around synthetic fuels, one of the types of renewable fuels that we have at our disposal. The third one around circular plastics for the circular economy and the fourth one around how we feed renewable electricity, which is a non-firm electricity to all these processes working 24 hours, 7 days a week. These will be four examples of things that we are already doing, we are already developing and some kind of remarks at the end. So coming to why we meet technology. We have identified five main reasons why we need to push technology in order to enable us to do these energy transition. The first one is perhaps the most obvious one. We need to do new things. We need to extend the limits of what is possible and you will see in a minute an example in photoelectrocatalysis, that's a technology which enables us to do something which we couldn't do some years ago. Then we have a block around improving the economics because it's not enough to have an idea. It's not enough to have something in the lab. We need to scale up that idea, and we need to make sure that the final product is affordable. And for that, we need to improve the added value of processors or products, higher yields, better qualities. We need to reduce the energy consumption and the carbon footprint of those products. And you will see in a minute, the Plastics2Olefins project is exactly targeting that. And we also need to look at the investment cost of these technologies in a holistic way, not in every step, but as a whole, trying to reduce. All these things will make us have an affordable energy transition. And technology is lying at the bottom of these developments. Then we have a reason, which is very particular to these energy transition, I've just mentioned it. We need to couple renewable resources, which, by nature are viable. We have daily variations in the sand, seasonal variations, and we need to couple that resource with industrial processes, which we aim to run on a 24/7 basis. We will see an example, we call it H2 Opera, which is exactly targeting that point. And finally, even when we have these processes, we produce renewable net zero products. We need to put those products in the hands of the final user, having a fit-for-purpose product meaning that the final user will not have any glitch, will not have any problem when using it. You will see in our Synfuels project, we're exactly targeting that. So these are the five main reasons why we think technology should be a key ingredient of this energy transition. And how are we prepared to do this? Well, we believe a dual approach is a very important part of this challenge because we need to combine our internal expertise, and we do have that expertise. We have more than 200 researchers, an extremely fine facility, which we call Repsol Technology Lab with pilot plants, analytical labs, all kind of expertises coming together from advanced mobility to process design, to advance mathematics. And we do our internal research, but we need to combine that internal approach with an external approach because there is plenty of talent out there. And for that, we have under the same umbrella, under the same organization, our corporate venturing fund endowed with EUR 50 million to invest in start-ups with disruptive technologies. We also have another fund, which has been recently launched. That's a shared fund endowed with a principal EUR 150 million to invest in more mature technologies. And we have a group within these organizations dedicated to what we call Open Innovation. That's approaching researchers, technical centers with good ideas, willing to codevelop them with us. And making us much stronger, but if we do things only by ourselves. The results of these in 2021, for example, where, as you can see on screen, 9 new patent families, 70 technology products and more than 200 partnerships all around the world looking for those technologies. So in all, we think we are well prepared to tackle those challenges that we have ahead. And how are we doing that in concrete terms? Well, starting with hydrogen, we have these boom around electrolytic hydrogen today. And the way we produce this electrolytic hydrogen is, as you can see this in the scheme on the left, we have the resource in this case, the sun, with that resource would produce electricity with a photovoltaic cell. We then pass the electricity through a cable, the electric rig, whatever, we send it to another equipment, which is the electrolyzer which takes water and these renewable electricity and produces hydrogen. This is the state-of-the-art. This is what we are putting at industrial scale. But as you can see in all this process we have energy losses into different transformations of energy, and we have to invest in quite a lot of equipments in order to produce these hydrogen. So what is our proposal? Well, our proposal is photoelectrocatalysis. We will see a video which explains this. Okay. Photoelectrocatalysis enables us to use the sunlight directly to produce renewable hydrogen. And how we do that? Well, with a technology, which is similar in appearance to photoelectrics -- a photovoltaic cell, we have in this case, photoelectrocatalytic cell composed of three components: the photo electrode, the separator and the anode. The photo electrode is exposed to sunlight and as it receives the sunlight, it decomposes the water molecule into hydrogen and oxygen which we can recover at the top of the cell. So by combining these technologies, we have a solution capable of producing hydrogen directly from sunlight. The obvious advantage of that is that we are relying -- we are using proven technologies, photovoltaic cells and alkaline electrolyzers. We have developed a proprietary technology for the photo electrode and the cell, which are the core of this technology. And all-in-all, we aim to increase the efficiency of how we use the sunlight, and we pretend to reduce the total investment of these panels, which bring together both processes, the reception of sunlight and the production of hydrogen. So where are we with this development? Well, we started some 10 years ago with the basic principles designing this photo electrode, designing the cell, illuminating it artificially in the lab and proving the basic principles. From there, we jumped together with one of our partners in this case, Sunrgyze, and we've built a pilot plant, you can see in the photograph there with two big panels capable of demonstrating that these could work in real conditions. This is installed in our Repsol Technology Lab with the sun in Madrid, and we've built what we call the balance of plant, that is the rest of the equipment which takes the hydrogen produced by the panel and separating hydrogen and purificating hydrogen in order to be used. That was finished last year. And at that point, we decided two things. First, we created a spin-off, another company, which is in an investment round as of today, trying to get the funds in order to build a demo plant, which will be in the range of 100 kilograms of hydrogen per day, proving that these can be industrialized and that we can reach the reliability, the economies of scale that will mean that in 2025, we can deploy the first commercial plants of this photoelectrocatalysis technology wherever in the world, there is enough resource and enough sun. So this is the first example of how we can approach hydrogen production with an innovative idea and making it happen. The second one is around renewable fuels, something our CEO has just mentioned. We do have a demand for net zero fuels, net zero liquid fuels, and we have two basic approaches. One is biofuels, which we are already scaling up to industrial scale. But at some point, we will touch the ceiling of these relation because we need to use biowaste -- so it's biological waste. And that's let's say, a limited resource. It's big. It's not limited for tomorrow, but at some point, we will touch that ceiling. What can we do to produce more renewable liquids? Well, the solution to that is synthetic fuels. In a nutshell, you have a scheme on the right. What we have to do is we have to produce renewable hydrogen, typically from renewable electricity. We need to capture CO2 either from industrial processes or in the future directly from the air. And with these two ingredients, hydrogen and CO2, we need to pass through these three processes. First, converting CO2 to CO, so that it is a more reactive element, then with CO and hydrogen we produce same crude, which is something similar to the crude oil we have today, but synthesized from these two ingredients, hydrogen and CO2. And then we need to upgrade that Syncrude to produce, let's say, conventional solutions such as gasoline, jet fuel, diesel, which are perfectly compatible with the engines that we have today, but we -- which have been synthesized artificially and which are net zero. These upgrading processes are well-known processes, very similar to what we do in our refineries today. But in order to do that, we have to overcome some of the barriers that we have ahead of us. First one is this conversion of CO2 to CO, that's the reverse water gas shift process, the acronym is there. That hasn't been scaled up to an industrial size, and we need to prove that that's possible, and that works. We also have to integrate the whole plan. We need to make sure that the quality of the products that we produce is big for purpose, and we need to run field tests to make final users aware of this solution and to give them the peace of mind that they can change this, complying with the net zero objective they have but at the same time, without any problem. So that's exactly what we plan to do. And we have partnered with Aramco in order to build the demo plant, will be 50 barrels per day plant, in Bilbao, the north of Spain, next to our refinery there. And at this moment, we are undergoing the basic engineering phase, designing the plan so that we can take a final investment decision by early next year, start building the plan, hoping to put everything starting up the plan by the end of 2024. So in 2 years' time approximately with a total investment estimated at a little bit above EUR 100 million nowadays. It's quite an investment. But if we can prove these works, then we can jump to the next phase and produce these industrial scale. So that's the second example that we are targeting right now. The third one targets a different challenge, which is circular economy. What we do with use of plastics, one of the other main products coming out of our industrial sites. Well, with plastics, we need to reconcile three, sometimes opposing requirements. One is we can't continue dumping plastics in landfills. We need to recycle those plastics. We need to reduce the carbon footprint of those plastics, and we need to make that at an affordable cost. Okay. In order to do that, the more obvious way is what's called physical or mechanical recycling. That's basically taking the waste plastic, [indiscernible] it, mixing it with virgin plastic and using it again. Well, that has two limitations. First, you need to process very clean, very well sorted plastic, but the problem is that used plastic typically comes from the rubbish bin where it's been mixed with other things. So it's not easy to sort the plastics in order to feed these mechanical recycling. Second point is that although we mix -- we recycle plastic with virgin plastic, we cannot get exactly the same mechanical requirements. So there is a fundamental limitation to what extent we can bring these mechanical recycling to. So at some point, we need chemical recycling. And for that, we have two technologies available, Tomas, the next speaker will talk about gasification, which is a perfect solution for big amounts of waste, but it has some difficulties when there's not so much plastic waste available. For that, we now have pyrolysis, which is proven technologies. We have plant already functioning. But the technology we have available today, it's called low temperature technology. It's oriented to produce liquids as much liquids as possible. But those liquids then needs to be upgraded and processed in a steam cracker in order to produce the ethane, which is the brick with which we build plastics again. So it's a long process. What we thought is that we could try another avenue. You can see on the graph on the right, that depending on the temperature we used to process those waste plastics if we stay in the 500 degrees region, which is pyrolysis, as we know it today, we maximize liquids. But if we go to a higher temperature, around 900 degrees, we produce gases, the majority of gases. And a good portion of those gases are directly ethane, which is our objective at the end of the day. So we think that if we go to processing plastics at high temperature, we will be able to produce directly the building blocks, the monomers we need to make plastics again. In order to do that, we decided to use an electrical heating technology, which enables us two things: one, it's a very fine control of the process; and the second one, you will see in our fourth example, we can feed renewable electricity and decarbonize the whole process. So that's the idea. And where are we? Well, we formed a consortium with many partners. Two of them are core partners for these development. One is ETIA, French company specialized in electric heated pyrolysis. They have the technology. The other one is Tecnicas Reunidas, which is an engineering company with a good expertise to bring lab and pilot plants to industrial scale and as the leaders of the consortium and final users of this technology. We've been granted Horizon Europe program, and we signed the grand agreement last June, and we're already working on this technology. By next year, we plan to have a pilot plant in Repsol Technology Lab, in Madrid, to fine-tune all the process details so that we can then jump to the demo plant scale, which is a sizable amount of waste plastic around 8,000 kilograms per year, which will let us jump to a complete industrial size if everything is successful. The whole process should take us the next 5 years with an investment of EUR 33 million. And the final example I want to put on the table came as a legal requirement and something called the Delegated Act of Hydrogen, came -- was published by the commission, and they set some regulatory requirements for electricity to be fed to the electrolysis. Now it's under revision, and we don't know where these regulatory process will end up. But basically, you put on the table three requirements called additionality, time correlation and geographical correlation, which are very stringent requirements on the electricity we can feed to electrolysis. Perhaps the most stringent one is the last one. It's the time correlation. They were asking for us to balance the energy generated in a renewable electricity plant with the energy consumed in the electrolyzer in periods of 1 hour from 2027. That's a very strict requirement. So how can we answer this? Well, we studied the problem, and we need to take into account some boundary conditions. First, we pretend to operate the electrolyzer, the 24/7 because it feeds downstream processes which cannot be stopped at our will. But we need to feed it with electricity coming from wind and solar plants, which is not accurate, completely accurately predictable. That means that with 24-48 hours in advance, we can make a prediction of what we will produce, but it will not be totally exact. In any case, we need to submit a plan to use the grid, the electrical grid in order to transport the electricity produced in a plant to the electrolyzer. And the operator of the grid needs to know what we will do in order to check if there are bottlenecks on the grid or whether we need to download some of the things in order to make this happen. So we need to put these with 24 to 48 hours in advance. But as the time approaches, that prediction should be reviewed, and we have to take into account in the final hour, the local conditions, what's happening with the clouds, with gusts of wind, which alter the prediction we have for that electricity production and adjust continuously our plan. We have, to say, flexibilities in all these processes that we want -- that we can put electricity storage in the system, which decouples some extend production and consumption, but it comes at a high cost storing electricity at least for the time being, is a high investment. And we can sell excess electricity to the market if someone buys it. So these are the, let's say, rules of play in order to develop this technology. What we are doing, and this is an internal development, is to create starting from what we call the physical layer that is the sun and wind plants, the electrical grid, our electrolyzer, storage of electricity, storage of hydrogen. Those are, let's say, proven physical technologies. We want to create a digital layer over all those physical systems so that in three steps, we first get data from the plants. We create predictions of what might happen in the following hours. All these data will feed an optimizing system, which will create this plan, which we need to submit with 1 to 2 days in advance. And then it will recalculate this optimization plan on a continuous basis so that we maximize the revenue that we get from hydrogen and we comply with all the regulations. And finally, once this plan has been created and updated on a continuous basis, we have an orchestrator, which is the system that controls the whole thing, the physical elements in order to put the plan in practice. This is -- this development we started last year. By the end of this year, we plan to have what we call a minimum viable product in order to have system in production by 2024, which is approximately the date where we plan to have big electrolyzers in place, so that everything is well optimized by 2027, if finally, regulation brings us to the system. So again, these were just four examples, four technologies we are developing either internally or in collaboration, but which we think tackled the main challenges we have ahead of us. So in order to summarize all these ideas, we think technology is the key -- it's one of the key ingredients to boost these energy transition. We, at Repsol, we want to be at the forefront of those technology developments. And for that, we engage with others. We plan to develop things with partners. We don't stay small. We want to do world-scale projects. And in any case, after all, I've told you about these four examples, we always keep our technology-neutral approach because if any other technology, which was not shown here, is finally successful, we will adapt it, and we will scale up in our industrial sites. Thank you very much for your attention.

Thank you very much, Javier. Our next speaker is Tomas Malango. Tomas is a chemical engineer from the Madrid Universidad Complutense. He joined Repsol back in 2001 at the Puertollano refinery, and moved in 2006 to Repsol Technology Center, where he has managed different development projects. He's now responsible for renewable fuels and circular economy in the Industrial Transformation division. Tomas will provide you a deep dive into one of these promising technologies, the classification process of waste feedstocks that is being implemented in our Ecoplanta project in Tarragona. So, Tomas.

Thank you, Ramon, and good morning, everyone. Following the previous presentations, I'm going to share with you an example of how we are trying to get value from the technology. I think it has been pointed out during the morning that the energy transition is a major challenge, and this brings us three things clear ahead of us. One is that we need a source of renewable carbon into noble hydrogen to create these new molecules. So now, we are evolving from a cracking processes to a scientific processes. So we're going to join together these two platforms. The second one, of course, is the challenge regarding the supply of renewable energy, which I think is relevant, and it will be something that we have to talk about in the upcoming years. And finally, is how we need to get involved in accelerating the technology deployment because there are a lot of technologies that are already there, but not at industrial scheme. And other ones that have to be developed, as Javier has mentioned previously. I will move ahead on this conversation, particularly about the gasification, which is one of the carbon sources that we're going to work on in these upcoming years. Of course, we'll have a deeper quick review on our ambitions. Then after that we will talk about our choice in this development -- technology development and the project that we are running right now in our Tarragona facility. These are the goals from the company what we're working on. And let me say that these goals are before REPowerEU and before Inflation Reduction Act. Therefore, probably the next year, we will be here. This will be somehow -- some extensions changes for sure. By the moment, I think it's a significant bet on renewable fuels. We're talking about 2 million tons by 2030. Regarding hydrogen, this 1.9 gigawatts by 2030. And circular and plastic raw materials, 20% of our production, 0.4 million tons per year by 2030 again. So just the remark that our ambition is there. Our set to become net zero is not on a longer shot, but we are working to make it year-by-year, starting by now and getting clear targets for 2025 and 2030. In the current context, and Josu Jon Imaz has spined-off very well is bringing us some clear conditions that are encouraging us to move forward in this pathway. One is regarding the energy transition and the independence of supply, and I will not go back on that because have been very clearly explained by Josu Jon, but the regulations are there. The push is very clear. And the situation is a challenge for the supply in the short term, is an opportunity for accelerating the sustainability in the longer term. On the other hand, we have a significant push also regarding the circular economy. We do believe that the -- all resources are doing -- take us as relevant. We're talking about and this carbon source is critical and circular economy will be for sure one of the sources of this renewable carbon that we need to create these new molecules -- these are now our molecules that will be complete in the energy transition together with the renewable power. The third point, and I think it has been very relevant this summer for sure is the client demand. We are foreseeing that the social pressure in order to move to more sustainable products is there. This is becoming a target for the companies that are working particularly in the packaging areas and the sustainable aviation areas; for two examples. It's very clear that the requirements from the society is becoming into targets for these companies. Therefore, there will not be only a demand coming from the regulatory perspective, but also from the client and the market itself, and this is already happening in the plastics and the materials markets. And last but not least, of course, the current situation of the commodity prices. And again, I will not go back on that, because that will be very well explained. But it's clear that this is, let's say, giving an opportunity to be more competitive to some solutions that 2 years ago seems to be very far away from the competition. Gasification is a key technology, and there's a key technology for this transition for two main reasons. One is the flexibility of the feedstock that can be put into these processes and then you can see municipal solid waste, plastics and biomass. And this brings all these residues into essentially CO, which is the carbon platform and hydrogen and adding some hydrogen there, then we have the flexibility to move to all the products that we have in our portfolio. As I mentioned, this is the switch that we are doing. We are moving from say, picking the crude and break it down in different molecules, then taking the CO and the hydrogen, put it in together and go to chemicals, fuels, both biofuels and synthetic fuels. There are different processes in the middle. I will just happy to spend it up. And the main advantages that we get from gasification are related to this one is the flexibility. And Javier was pointing that we are working on other technologies, but other technologies have more limitations on the feedstock that can be introducing them. And at the same time, you have a limitation with the volume that it can be processed. By the moment, gasification seems to be more promising technology, not enough getting higher volumes and more flexibility. The second one is what I pointed out just a minute ago is the production of this combination of hydrogen and CO what is called syngas or synthetic gas, which is a combination of gases that can leverage the production of any molecule that we sell today from molecules for the plastic for polymers, up to the heavy oils. You can produce almost everything from this syngas, which is the outcome of the gasification process. The third is the efficiency. Efficiency is, of course, is relevant in our industry. And we always have this in mind, because the possibility to put in all kind of feedstocks allows you to produce at the same time outcome of products that we have been talking about, if we're talking about renewable hydrogen, we're talking about biofuels, we're talking about synthetic fuels. You can make almost everything coming from this. So this allows you to deliver the amount of feedstock, hydrogen and anything to define the better operational point what you want to achieve. And the fourth, the maturity. Maturity is important, because this technology, as I mentioned, are not an industrial scale. Indeed, in the project that we have at this point is the first of a kind in Europe. But from the studies that we have, this is the more close to market technology, and this is relevant in order to select it as a key technology for our development. Of course, scalability is important. Again, we're looking for volume, and we need to replicate these projects several times to get the volumes that we are looking for. So this is a technology which is modular. So essentially, it's quite easy to replicate in different scales and for sure, finally, the sustainability. So this is a process that allows us to produce what we're looking for and make sure that we meet all the requirements from the European and American regulation. And now let's talk about our partner, which is Enerkem. Why we selected Enerkem to make this experience together is very related to the position that we have and the different technology that we are trying to upscale. As you can see in the picture, the Enerkem core business is the gasification, of course, and this is the most advanced technologies in this area following our studies of the market. But not only they are working in gasification, they're also working on some processes downstream that will be relevant to us in order to end up in the different sources we are looking for. One is the conversion of syngas into methanol. We believe that methanol is going to be an important molecule in the future due to the ability to become as a fuel for instance, for the maritime sector, we are just working on that. But at the same time, we become as a feedstock for the production of olefins or some other materials. Therefore, we strongly believe that methanol will be a key molecule in the future, and they are looking in this, and they have already a demo plant that is producing methanol by the moment, and it's going to be part of the technology that we are going to deploy in Tarragona. And they are also working on some other processes like olefins, which is -- it will be a kind of bi-process to increase our profitability if the market switch from olefin materials to SAF or to other things. Therefore, the position of Enerkem is very flexible and very relevant in the posttreatment of the syngas that is coming out from the gasification. Of course, this is the -- as I mentioned, Enerkem is a partner of choice because of the experience that they have shown to the market regarding gasification. They have relevant experience operating the plant. They have a facility in Canada already running for several years, and we have been there, and we are sure that they are the most flexible and reliable technology operating by the moment. We believe that they are very oriented to this downstream integration, as I mentioned with this bi-processes together with the gasification. And since we are working with them together, [indiscernible] Ecoplanta, but we are going to talk about it in the next slides. And from the commercial perspective, they have a strong pipeline, which is significant because I think that this is a big difference in these new businesses. The size is relevant, and we don't have a lot of players that are able to make it in a while, at least at the time line they are trying to push it. This is the point where we are with Enerkem at the moment. We decided in April to make an investment of CAD 107 million both in equity and loan convertible in equity. We do believe, again, that from Repsol perspective, this will be a significant advantage in order to push our road map ahead, both in hydrogen because these gasification requires hydrogen to increase the yields. So we will be our way to speed up our hydrogen road map. Of course, the production of synthetic and biofuels and biocircular materials. We have the possibility to integrate these processes. So we will be part of the production together with them, and also at the same time, relevant of taken of these molecules coming from -- out from the gasification and the methanol. And we are taking also advantage and the possibility to drop in different projects together with Enerkem. And from the Enerkem side is, I think the main thing that they find with Repsol is the top line of the road maps and the possibility to scale up faster and to get better integration with the downstream, which is outside of the upper limit, let's say, somehow. And how we are making this real because up to now, it has been a very nice story to how we approach to this. And now we tend to work on making it physical and making it real as soon as possible. This is the Ecoplanta project, which is a project that we are developing in our Tarragona facility in the Northeast of Spain and the project is aiming to process 400 tons of waste per year and to come to operation by 2026. This waste by the moment is going to be essentially nonrecyclable, municipal solid waste. Therefore, we are, at the same time, tackling the secular economy targets and the production of this renewable carbon source for our products. The downstream process, it will be the conversion, the syngas to methanol, as I mentioned in the previous slides. So we're going to produce methanol and this will be our first methanol production and the first step in order to develop this market or this development of a set of products that will be coming out for methanol. As I mentioned, we believe that methanol is going to be a pivotal molecule in the future. In the technology, as I mentioned, has been proven and is already working in this demo plant, the Ecoplanta. This is a first-of-a-kind industrial facility. Therefore, it has been awarded and recognized from the European Union, and we are expected to get this 70% of carbon recycling in the process and significant reduction of CO2 emissions up to 3.4 million tons. The reduction of landfill is something that I think is going to be relevant and it makes a difference of what Repsol's approach to the energy transition than other companies. This is because the conversation is always focused on energy transition and it makes sense because it's a major challenge. But we do have another challenge, which is the management of the residues, and there are a lot of policies behind this, trying to push the reuse of the residues, and at the same time, limiting the amount of residues that can be delivered to fuel, but they must be delivered to materials. There is a kind of a target in Europe trying to take materials to materials instead of materials to fuel. Having a petrochemical division enable us to satisfy this goal, and at the same time, take the amount of product that doesn't require to go to materials into fuel. And this is a split that a lot of players cannot do because the integration of petrochemical and refining sections in the same companies to that extent or say even worldwide, particularly in Europe. This is clear that there are not a lot of companies with these both scopes. And this enables us to meet both directives -- one is the secular economy requirements in the products, not only from the regulation but also from the market. And on the other hand, all these targets regarding advanced biofuels and what's the so-called renewable fuels and biological origin synthetic fuels. So we can produce almost everything, and at the same time, meet the market requirements and the regulation. This is the summary of the project, essentially, as I mentioned, we're in the process of 400,000 tonnes per year of residue. We will add some hydrogen you can see out there. So this is an electrolyzer of 150 megawatts to give you some ideas and probably this is the electrolyzer that we are willing to start in Tarragona by 2025, and it will be by that time, the biggest electrolyzer in Spain. So this is a [indiscernible]. And again, come to the renewable or circular methanol, depending on their residue and this will be splitted in fuels and materials. This is the time line. We have, by the moment, the project has been awarded with an Innovation Fund, and we are running up to make the final investment decisions by the first quarter of the next year. We are still working on administration permissions and so on and the idea is to end up the construction of the plan by 2025 and start the production at the beginning of 2026. As I mentioned, this is very well aligned with the European requirements and the project has been awarded in the Innovation Funds called from the last year. It was one of the 7 projects awarded between 300 and our site by the moment is the only -- the single industrial peer awarded in Spain. And I think we're talking about 1 of 14 in Europe by the moment. So it's a recognized project. And just for Repsol, this is a first move in order to create a beta tester, which is this project, and it should be the way we will construct all this pipeline in the future. We know that there will be a challenging operational issue for us, moving from crude to residues is relevant. But again, as Josu Jon explained, clearly, we think that we have the right people. Industrial challenges is something that we have faced in the last, I would say, 30 or 40 or 50 years, moving from light crudes to heavy crudes and moving to different products and increasing our portfolio. So we are used to facing this, and I will say that probably the oil and gas industry is the strongest industry able to face this kind of situations. Being an early mover, we believe that gives us the opportunity to get these capabilities earlier than the others understand the operation and understand the markets and be able to move faster. And at the same time, taking this equity and technology developer enables us to understand better the technology in the very deepest way and taking advantage in, let's say, conducting some of the developments in the future in order to get the right products under the right [indiscernible] we are looking for. And at the same time, understanding the waste management, as I mentioned, is going to be our new upstream in the future. So we need to understand how the business works. So this initial project will help us to create all this value chain and this understanding of what we need to create the business for the future. So thank you very much, and we'll be willing to hear your questions in the time line after the coffee break.

Thank you very much, Tomas. Next speaker is Carmen Munoz. Carmen holds business and law degrees from Universidad Pontificia Comillas, having developed her career at Repsol mainly in marketing and commercial positions from loyalty programs in business development and leading the LPG business until 2020. She is now Executive Managing Director for People and organization and a member of the Executive Committee of Repsol. Carmen will talk about how Repsol is promoting diversity and inclusion across our organization as one of the key levers to safeguard equal opportunities and develop the competitive advantages that reside in our people independently from gender, ethnicity, or sexual orientation. Carmen, the floor is yours. [Presentation]

Thank you very much for attending this meeting. From technology to people, this is hard to start talking about people after this speech we have had in terms of technology, but I'm going to try to share with you, we are doing in terms of boosting diverse talent at Repsol. I'm going to give you a global overview about how we're working, boosting this diverse talent, why and how we do. After that, I will share with you some information, some data, about the representation of the different groups of minorities at Repsol. And in the third part, I'm going to try to convince you that we are doing a very concrete action looking for very concrete objectives to move this talent and to be able to face the challenges of the transformation of our company with our people. And of course, next step because we have still room to do many things to improve and to increase participation of different -- collective different groups in our staff. Repsol is fully committed with diversity. This is really a priority. This is strategic and this is global. We are absolutely convinced that giving our best in the environment place is the key to be able to work in a sustainable way, not only because of the technology, not only because of the digitalization, but especially boosting and supporting our key talent to be able to do this transformation. Diversity and inclusion occur in our culture and are linked to our values of respect of anticipation of efficiency and value creation. It is impossible to thinking creating value without the talent of our teams. Attaching with these values, we developed our policy of management talent, which is sustainable based on belonging to the company and developing a relationship based in mutual and respect and trust. We work to assure in the short, medium and long term, for giving to people development opportunities and to assure that we work in an environment in which there is no room for unequal and discrimination behaviors. This principle started in our Code of Ethics and Business Conduct, which is the reference framework in which you are working to give and to provide our employees the main guidelines of which are expecting from them in terms of their conduct. In this code, we prohibit expressively any discrimination based on race, ethnic, religion or age or social condition. We have also available 24 hours channel, which is our ethical compliance channel, which is a channel orientated to raise question and to fulfill complaints about possible branches against our code of ethic and conduct. In short, our objective is to approach diversity in all its dimensions to be able to assure that we have this diverse workforce that will be the competitive advantage to arises from the potential of having these diverse workforce in our transformation. Why are we convinced that we have to work in diversity and inclusion. We talk a lot about the business case of inclusion. Pilar Rojas, who is today with us, it is completely convinced that we can talk about the business case of working in this diversity and this inclusion with our staff. Why -- it is not just a question of doing the best of doing what it is right to do. In a few business sense, we are convinced that we will be more successful if we have diverse staff. Why? Because we will have a wider access to marketplaces talent. It is demonstrated that improving employee satisfaction gives more productivity to our staff. Of course, we are a commercial company. We have a clear strategy of customer centricity, and we want to be able to reach this capacity to cover the needs of our customer if we are not really a reflection of the society in which we are acting. Diverse workplaces boost creativity and of course, having different perspectives lead us to a much more innovative environment. And finally, it is just a question of also improving reputation, and having from the society, this license to operate. So this is about a [indiscernible] cycle in which we have to work and which we have to boost the talent. How are we organized to be able to face these challenges? I'm going to start by the completion of this Diversity and Inclusion Committee. This is a committee comprised by top executive of the company. You can see that our CEO is comprising this committee. And this committee promotes and oversees the global measure we have to promote really to assure that we've evolved into this fully inclusive workplace that we are looking for. This committee drives different initiatives of all dimensions of diversity, and from time to time, report to the Board of Directors. But our ambition to be a diverse company is global, but we need really to deploy locally in different countries, in different geographies, in different business, and we need to have many people involved in this deployment of the different action. How do we work to assure the deployment of the different actions we are boosting. We count with a team of DNA, which is represented by Pilar who is our manager of Diversity and Inclusion. We are very proud of taking into account a group of more than 40 professionals, which are called the group of Ambassadors who leads and who links to the different businesses and countries to be able to boost and to be able to implement the different actions we are working in the different dimension of diversity. This local allies of the company, working very concrete committees. For example, recommending participation and training in different activities and leading local initiatives to extend knowledge about diversity and inclusion topics. Supervising process, we work a lot in processing talent process to assure that they are free from a conscious bias. They provide us information about their perspective in their business and in the different countries to include in our policies of diversity and inclusion. And of course, following and sharing with the different teams, the achievement, we are doing in the last year in terms of Diversity and Inclusion in our staff. The contribution of this team, which are supported by our HR business partner in each geography, is absolutely essential to be able to be effective and to be able to deploy all our policies in terms of inclusion. Talking about our ambition in extending these goals of diversity and inclusion, we'd like to say that our ambition is to work and to extend diversity in all dimension. It is not easy because we are talking about changing culture, we are talking about moving behaviors to a complete inclusive workplace environment. But we are convinced that it is the way we have to enhance, to be able to reach and to be able to achieve this talent, this full talent, to do this transformation. Talking about the difference dimension we are working in. We are working in the primary dimension of diversity because we think that it is -- in this impact, we have to focus our impact to build identity and to move this culture. Our challenge is to achieve better representation of different minorities and to develop in the whole organization, this greater sense of belonging that we need to have this committed professional. In gender diversity, we want to balance the winner representation in all levels of the organization through removing barriers that you know that, especially, [indiscernible] in our industry as we represent. In terms of integration of disabled people, we have a very long experience. We are talking about more than 20 years working in integrating people with disability in our staff. And our commitment aims to exceed the legal percentage required in each country in which we are working in. We understand that if we have available talent of people with disability. Increasing and exceeding this percentage, we have to do something different to be able really to exceed this legal percentage that we have in every regulation. Regarding generational diversity, we are working to ensure that around the whole professional career of our professionals, we are sure to have our people active, motivated and developing their capacities to be able to give their best during their whole career. Our approach to the LGTBI+ community is strongly based on our value of respect. And it is very simple, but very difficult, what are we looking for working with this community. This is just to give them the possibility to be themselves also in the professional field, not only in their personal environment, but also in the professional environment in the company. And of course, talking about culture and ethnicity, well, we have quite an international profile. This international profile is one of our main assets, and we just need to assure the respect and inclusion of our employees for all races, ethnics and cultural backgrounds. Well, this is all dimension, we are challenging and we are trying to develop to really assure that our employees can develop their full potential and so that be able to reach and to achieve our challenges and our goals in the strategic plan. Moving to the presentation of the different collective. I'm going to start with sharing with you some information about the female talent, the representation of female talent in our staff. I think that we have done really a long way to be able to share with you this data. Perhaps some of them could think that it is not enough, and I agree. This is not enough. But I would like that you take into account that we are working in a traditional industry in which females have been always under represented. So we have been a big effort to be able to achieve this data you can see here. Talking about the total women representation at Repsol, now we are close to 40%. If you look just 10, 12 years ago, we were just at 27%. So in just 12 years, we have increased the participation in 12 points, which is really a challenging action. How we are doing starting with hiring with recruiting. We balance always recruiting to be able to reach this 49% that we have now. And now we have consistently this percentage of new hiring at Repsol in these levels. It is not an easy goal because we are moving to much more technical and digital profiles, and it is not so easy to find women in these technical profiles. Our goal in terms of leadership position is to reach the 35% in 2025. But now, we are in 32, which is quite an important representation of women in leadership position. And of course, we will go on working and will share with you the different actions we are welcoming women to assure this representation. I think that you can see that in executive position, we are really far from being a benchmark in women representation, but we are working a lot with our talent pool -- female talent pool, and now we are really proud to look at our talent female pool and to be able to say that we have a perfect balance between women and men. Now we have 55% of women ready to go to this executive position and medium term. Just 2, 3 years, we have 46% of female represented in this talent pool. In terms of age distribution, you can see that we have people represented at all level of the organization and quite balanced between women and men if we talk about age distribution by gender. You can see that, of course, in the highest ages of the organization, the representation of women were smaller, but now we are achieving to this balance between men and women in all ages in the parameter of population. Talking about representation in different culture. At Repsol at the present moment, work 77 different nationalities in our staff in 36 countries in which we have a different kind of operation. In terms of people with disabilities, we have achieved the amount of 500 people working in our facilities, in our different industries, which is a percentage in Spain of 2.3%, 2.4% more or less, which is our commitment to exceed this regular -- this demanded percentage per regulation, which is in the 2% in Spain. The average of our staff, you know that you can see here, it is 42 years for women and 45 years for men. I'm going to share with you the voice of the employees. I was hesitating about sharing with you the result of our survey -- with our culture survey, talking with Pilar. We decided to be transparent with this voice of employee because from this survey, we extracted very interesting information about how to deepen and how to personalize different actions in different geographies, in different segment of age, of gender and in different moments of the professional career of our employees. You can see here that the global perception of our index of diversity and inclusion, which is in our survey culture. It is quite positive. We have 73% of our employees who has a very positive view about how are we working in diversity. But of course, there are room to improve in some dimension. I want to highlight that the youngest people, people under 30, has a very positive and consistent view about how we were working in diversity at Repsol. Where do we have more room to improve in women, especially in top talent women in which they feel that we are not working enough to assure this life balance and to be able to support them in their careers. Moving to the concrete action. We are deploying to be able to achieve these goals. We are working in 5 different lines. We are working in setting goals. I think that if we don't have a concrete goal for different dimension of diversity, we won't be able to measure and to adapt our action to be able to achieve these goals. In these goals, I want to underline that we have this commitment of 35% of women in leadership position by 2025. We are committed with this priority in hiring in our talent acquisition process. As I have shared with you, we have committed to exceed the legal obligation regarding improvement of people. And this is really hard in the last moment because it is not so easy to integrate people, especially with mental with intellectual disabilities in our staff, and of course, to be able to achieve this inclusive environment for the LGTBI employees. We work also in people analytics. We have developed a very useful tool of analytics in terms of talent and in terms of people, which give us a lot of information to be able to measure the performance of the company. To be able to find, for example, recruitment patterns and uncover potential bias regarding performance, regarding some process -- as talent processes, and will support us with a deep analysis of data to be able to correct and to react in the different actions we are launching. Of course, this talent management campaign is to ensure that in our performance campaign, in our potential -- high-potential talent campaigns, we are free from bias. And working also in this talent management in training, in coaching and in mentoring programs. And of course, personalizing this development programs, especially focus on those minorities in which we are working with. We have to go working in awareness and in training, because it is absolutely essential to go on communicating the importance of diversity and inclusion policies all over the company. And finally, of course, but very important, working with leadership. It is essential to train our leaders, to develop our leaders with this conscious about the importance of diversity and inclusion in all our staff. Starting with the first dimension we are working in, gender. We want to share with you that it is really a challenging dimension in which we are working a lot. Just taking into account, I'm going to share some information that our CEO share always with us. Taking into account that the earliest 80s, it was forbidden by law that a woman could work in a refinery. We have done a lot in these last 40 years to be able to have this representation of women that we have now. We work into different lines of action. The first one consisting surveying and overseeing the different processes to be able to assure this balance in the integration of women in our organization. This consistently achieving part in external recruitment. Programs of mentoring. Now, we have more than 40% of our leaders, women leaders, in mentoring programs, in different programs of our company with these women to be able to avoid this leak we have always in the pipeline of female talent. We have special up-skilling and re-skilling program focused on female talent. For example, the Data School training, which is orientated to reduce the gap in digital abilities and digital skills between men and women in the organization. Of course, to give much more exposure and much more visibility to women with internal mobility, and to work in this parity executive talent pool to be able to assure that in the next 3 years, we will have enough talent also in executive position. This is an important part to work in this concrete action in the different process, but we want also to share with you that we have worked a lot in an external initiative to be able to benchmark our performance against best practices. We are pride to have occupied last year the first position among energy sector in the Bloomberg's Gender Equality Index. We have signed different agreements of [indiscernible] equality in the Company, a company for society free from gender-based violence, and we are really committed in our active participation on all those forums. We participate also in different initiatives which has to do with the developing of STEM vocation in the youngest population. We have signed the STEM alliance for female talent with the Ministry of Education in Spain, and we have an active role in this organization. And we are also a very active participation in the youngest vocation of females in STEM vocation with our program of Repsol Digital Girls. With all this action in processes but also in awareness and in training and external participation, we are sure that we will move to a much more inclusive organization in terms of gender in the next few years, and to be able to achieve this target of 35% in representation of women in leadership position. Moving to people with disabilities. Just to focus on the most important achievement we have reached during these years, we have reached integrating in our staff almost 500 people in the last year. We are referencing the market in adapting our facilities. We are talking about the adapting of 500 petrol stations in Spain, and our corporate headquarters have been built under universal accessibility criteria. And in this field, we have shared our wide experience in different publications [indiscernible], overcoming barriers or accessible service station guide, which is referenced in the petrol station market in Spain. As you can see, we are always working also embracing awareness about the integration of this group of minority, of collective, with a different agreement. The most important and the most representative is the one we signed for the fifth edition with Fundacion ONCE, which is the most important reference organization in terms of integration, disabled people in the professional environment. Talking about gender identity and sexual orientation. Our challenge is to be able to assure to this collective, to share -- to have an inclusive environment in which they can really develop their work without any fear and feeling that they have -- they can demonstrate how they are in the same way that in the private life. To participate and to support this collective, we are participating in different external initiatives that are giving much more orientation about how to work with this. We have signed the UN Standards of Conduct for Business Tackling Discrimination against LGBTI people. And we have also signed an agreement, a national agreement, in which we are participating very actively, the REDI Network, which is a professional network for inclusion of this collective. Internally, we develop a volunteer group of employees, which is called the Allies networking, which help us to boost all this action on this collective. They have developed a training course, Energy with Pride. We have been analyzing the different regulations in different countries to extend benefits of marriages and civil unions between employees in these countries and this regulation doesn't contemplate these rights. And of course, other kind of action as travel safety information and the Respect Guide for this group of people. We have talked about culture and ethnicity. For us, to develop these multicultural competencies is one of the goals that Repsol considers key for a diverse and inclusive company. And it is important really in this moment in which personal interaction has descent and face-to-face interactions are more complicated. We developed a special training and communication action to raise awareness on the different collectives and the different cultural realities we have at the company. And especially, we have special moment of communication, coinciding with different calendar days in which we celebrate different realities in terms of beliefs, culture or race. Finally, talking about Generational, we have we have here a great challenge because life work are longer and longer. We have a very diverse staff in terms of age, and we need to balance the senior talent, the motivation, the interest of this new talent with the integration and the hiring of new people, young people, with completely different skills and with completely different motivation. For that, we are working in different programs. First, we are working in a program orientated to assure the transfer of knowledge about the senior talent and young hiring of the company. Especially in industrial facilities, you can see mentoring talent -- mentoring program, very focused on technical knowledge, but also in safety management and business planning. We have a long history of a Young Talent Program, and we are especially proud of our Dual Vocational Training Program in which we have integrated hired in our company more than 1,000 professionals in our industrial facilities. And of course, it is essential to work in policies of health and wellbeing to assure this active participation of all our talent during their work life. We are convinced that we have made a great progress. And with the data we have shared with you, we are convinced that we are in the right direction. But of course, it is not enough. We have room to do many things in terms of boosting this diverse talent. And of course, going on setting new goals, analyzing the main challenges and the main barriers, we then define the different collective, and working with talent, our leaders, we are sure that we will change and we will reach and we will achieve our targets of our strategic plan. Thank you very much.

Thank you very much, Carmen. We are approaching the end of our presentation this morning. Final presentation will be done by Luis Cabra. Luis is a Doctor on Chemical Engineering from University of Complutense in Madrid with almost 40 years experience at Repsol Group, where he has had several technology and management positions. He's currently Deputy CEO and Executive Managing Director for Energy Transition, Technology and Institutional Affairs, and is also a member of the Executive Committee. He has represented Repsol in various international associations, and in June 2021, he was appointed President of FuelsEurope and Concawe, associations that represents the European refining industry. Luis will update you on Repsol approach to assess the climate credentials of energy companies, the importance of transparency and the different scenarios that can lead us to achieve a net 0. Thank you very much, and Luis?

Good morning, and well, it's a pleasure being here presential this time after 3 years of virtual contacts with many of you. So we are -- as Ramón was saying, we are heading the last part of the session today and probably the most boring, because we are speaking about methodologies, ways of assessing the climate credentials of an energy company. And well, today, I will be -- with all modesty, I will show which is what Repsol thinks about, which is the best approach to assess these climate credentials of an energy company. Of an energy company that, in our case, is moving from oil and gas to a multi-energy approach. So with all modesty, I will be quite assertive, and I will make some comments on what we think that are good, on what's the way that the sector and the stakeholders are getting us, and also to put some point of improvements also, if we may. So I will not repeat. I believe, Josu Jon, our CEO, has set the scene very well. And -- but we need to remind that we are in a very complex world, and we are facing a very complicated and complex matters. And we have a lot of urgency on reducing emissions. We are not reducing emissions that are hard tracked. On the other side, we have the so-called energy trilemma, in which we need to continue supplying secure and affordable energy, which is the energy that has been allowing the development of the world during these last 100 years. And at the same time, we need to change things in order to decarbonize our mix, so that's really a complicated matter. And we have an ambition, and the ambition is now set. And with most of science behind that, we shouldn't surpass 1.5 degrees C global warming by the end of this century. And hopefully, by mid-century, we should be carbon neutral. That's the ambition. So around -- in my transparency, there was some comments around the complexity. And every sentence in the last slide was pointing out to a complicated matter. We are speaking about the global governance of climate change. We are speaking about technology neutrality, about sustainable finance, very relevant to this audience. We are speaking about geopolitical implications and dependency, et cetera, et cetera. So complicated matter. And well, very simple. It's not bad to start by speaking about where we are today. We have secure and affordable energy, but we are continuously increasing emissions. And we need to remind that more than 40% increase of emissions has happened this century in the world, so this is not sustainable. But we need to remind that we are discussing about probably the end state, how we should be in 2050, but we are not doing even the easiest ways of reducing emissions today. Moving from coal to gas, this has been done in the States, in the U.K., in parts of Europe, but we are still continue using coal to produce power, even more now in these big prices. And well, we are doubling emissions as compared to using readily-available natural gas. So we need to assess that. The European Union, because our company is very much focused in Europe and in Iberia, good job. 32% reduction of emissions in this century. So really, this is the result of the ambition of the European Union towards decarbonization. But a significant part of this decarbonization, as Josu Jon has explained before, and I will put some figures over there, have been the result of delocalization of the European industry, and this is not the way forward. We are moving industries from Europe to other parts of the world. And probably, we are increasing emissions because probably our way of producing is more decarbonized in some way that the practices in other parts of the world. So you see, the weight of industry in the GDP of Europe has been consistently decreasing during this century. And we need to revert that situation, at the same time, that we decarbonize our energy mix. Very simple statement. Josu Jon said not everything is electrification. Definitely, electrification is going to be one of the key pillars of what we have to do in order to decarbonize the energy mix. That's why the single growth business that we have now in our company, growth in terms of volume, is renewable electricity generation. The others, we are transforming, we are decarbonizing. But definitely, the electrification will not be enough in order to overcome the challenge of being climate neutral in 2050 and 1.5 degrees C by the end of the century. So in a simple way, we say we will produce renewable electrons, but we will continue producing molecules, and these molecules have to be renewables too, have to be decarbonized too. And with this combination of electrons and molecules, we can faster decarbonize our energy system. And what we cannot do with electrons and -- molecules, both renewables, we will do it with through carbon capture and use or storage. So it's a combination of 3 single concepts, many technologies behind that, and you have seen some examples of the renewable molecules in the presentation of Tomas and Javier. So let's go. This is the, let's say, the introduction. And now let's move into the assessment of climate credentials. So we believe that anything which is trying -- any framework, which is trying to assess the climate credentials of an energy company, should follow some principles. And these principles are inclusiveness. That means that we need to evaluate everything which is decarbonizing from where we are today. If we are substituting coal by natural gas, this is decarbonization. We now know the big debate in Europe about whether natural gas is green or is brown. If you use natural gas and you are substituting something which needs more carbon, that's going to be a transition activity that should be included into the positive evaluation of an energy company. So not just looking at the end state, 2050, where maybe some believe that everything will be renewable electricity, others will believe that it's going to be a combination of things. But let's start by thinking what can do today in order to decarbonize the level of CO2 emissions that we have today. Technology neutrality is very clear, not to be prescriptive on which are the solutions. There is no reason to prohibit any technology. There is a reason to prohibit emissions, progressively prohibiting emissions, and leaving entrepreneurs and innovators to develop technologies to fulfill the objectives. Standardization of metrics. We all know that there are a lot of initiatives that are going on, on that. But from our point of view, standardization is one thing, using a single metric fit for all purpose to define in a very simplistic way, whether or not you are green, is not the right way. Standardization means that we may use a combination of metrics, a set of metrics, but we need to clarify very clearly which are these metrics and we try that everyone is using the same type of metrics, but more than one. And that's our position. Long-term uncertainty. Again, when looking at assessments, we use metrics, and we put targets and goals. And we believe that there is a different time perspective on that. Say, if you are putting targets for this decade, you can measure and monitor the progress. That's a firm target. If you are looking at something which is beyond this decade, 2030, 2040, 2050, some may be firm targets. For us, Neo 0 is a firm target under any scenario. But there are a number of metrics that when the evaluator is asking, which is going to be your production of oil, your production of gas in 2040? We have to say it all depends on how is the macro scenario of the world is moving out. It's going to be the net 0 emissions of the European -- of the international energy agency, or is going to be something else? But at the end of the day, our firm target is being net 0, but there are a number of metrics that we will use that we can consider that they are projections in the long term, or even conditional targets, conditional to something else happening, say, in terms of technology or in terms of demand. So this is something that should be incorporated into the assessment framework. And well, expert judgment. We need the experts on the energy companies, and we need experts on the stakeholders in order to have a dialogue on which the evaluation and assessment frameworks that allow you to judge in a better way, which are our climate credentials. So these are the principles. And now in the lower part, a little bit complicated. But we have tried to say, okay, what do we believe is going in the sense of the principles and what is going a little bit far from that principles? And we have here some approaches that are end state-focused only, just looking at 2050, that there is a significant technology determinism, renewable electricity is okay, natural gas is bad, nuclear is whatever. And oversimplification, seeing, okay, this is the path. This is the metric. If you are there, you are green, if you are not there, then you are something else. So on the other side, this is the type of approach that we firmly believe in. Transition and end-state activities are good, provided they decarbonize, technology neutrality and a little bit more sophistication. We are not speaking about the rocket science, but we may need a set of metrics for -- in order for the stakeholders to judge on the climate credentials. So on these extremes, how we see the ones that are developing scenarios? If we look at the international energy agency, I believe they are more in this side. They are setting very deterministic way, this is the net 0 scenario. In the report, they say this is one of the possible scenarios. But when they speak about that and with the director is speaking about that, it looks like it is just saying this is the scenario. So I believe they are more in this side. IPCC, which is probably collecting the best salience in the world in climate change, they are on the other side. You will see later some comments about that. Sustainability framework. Organizations, associations and regulations around climate change, and that touches the assessment of climate credentials of energy companies. Well, here, we have the European taxonomy, quite deterministic. A list of green activities, a list of brown activities, very easy to judge but probably oversimplification. The so-called science-based target initiative, modestly speaking, we don't like science-based to be just associated to a single initiative, which is very -- deserves a lot of respect, but it's one initiative. And it seems that everything which is science-based now is just what this initiative is determining. That for the time being, and you all know it and you probably know, they are saying there is no way that today we are able to judge whether oil and gas is at all green or brown. They have stopped their work. We've been working with them for 2 years. Now, they say we want a panel of independent experts to put a framework on what is a target setting for the oil and gas industry, okay? So we are still willing to participate and working with them, OGCI, an association of companies in which we participate, are trying to engage with them, and see whether they can bring something which is meaningful for our sector. I believe this science-based target initiative, they have been doing a very good job with many sectors. And one of the positive things is that they've been in touch with the sector in order to target setting what they call a science-based target for each sector. We would like that to happen also with the oil and gas sector. Climate Action 100+, you -- most of you probably are engaged with this initiative. We see that more in the other side. With some room for improvement from our modest point of view, and we are engaging with TPI and climate action trying to explain, which is our views about some of their methodologies. And well, we see BlackRock, and now BlackRock seem to be in the past the leaders of climate change in terms of investors. Now, they are a little bit more blamed about whether or not they are not good enough. So I believe if some people think that BlackRock is doing right and others say that they are doing wrong, probably they are in the middle, and they are a little bit more balanced than others. So we are very much aligned with this type of view on setting a holistic framework, which requires expert knowledge and expert judgment in order to assess whether or not the company is deserving the investment of a sector company. Regulations, just a word. We see Fit-for-55 package a little bit on this side. They are promoting a number of things, but a little bit prescriptive. Everything around renewable electricity generation, it's okay. Hydrogen is okay, but you've listened something about the complexity, okay. With all the limitations, you need to produce the electricity in that way. On the other, we tend to be very prescriptive in Europe. We see much more room for decarbonization and much more room for capital flows towards decarbonization in the States now. You know the Inflation Reduction Act in the Clean Energy part of the story. They are putting a lot of incentives to promote many different parts of decarbonization with renewable electricity generation, carbon capture, hydrogen, sustainable aviation fuel, et cetera, et cetera. And well, you will know more than me. But I have the feeling that there is a lot of capital that will flow now under this more, I would say, open way of thinking about decarbonization. So that said, which is our approach? Basically, we are trying to land these principles into our specific framework and say, okay, we need to assess the strategy of the company. It's not just a matter of showing a graph and saying whether or not you are decarbonizing well or back. Second, all methodologies should be science-based. We would like to speak about science-based, not to be just identified with a certain initiative. We believe we are doing things which are science-based and comprehensive in terms of methodology. And now landing that, a set of metrics, and I will show which is our set of metrics that we allow you to judge each of them with a meaning, different parts of the value chain and probably by having something like a dosing of metrics, you will be able to judge our strategy and how this is inconsistency with 1.5 degrees C and climate neutrality. And quite significant for me is this one. We have firm targets and we have projections. Normally, in these decades, everything needs to be firm targets and you will see. From '30 to '50, we have a firm target, which is Net 0. And then we have projections and scenario analysis and metrics on how we intend to do that, depending on how the world will move in terms of energy in the future. So -- and definitely continuous engagement and details disclosing is something that we offer to all of our stakeholders, and we would like to continue looking at an expert judgment from both sides. So this is the set of metrics. It's not new. I believe that you may have seen these metrics in our speeches, in our strategies and so on. There are not so many. Carbon intensity reduction, I will make a comment on scope 3 because this is one of the key elements of that debate and discussions on how to measure scope 3 emissions. But we say it's important to have interim targets. That's very key in our strategy, and we have it. 2025, '30, '40 and '50. And 3 metrics of scope 3, and I will dedicate just 2 minutes to explain a little bit about that because we, in a very assertive way, we continue saying that we would like to maintain our Net 0 commitment based on the products that are produced from our primary energy production. I will dedicate some words to that. And if you want us to explain which are the scope 3 of all of our sales, I will -- we will do it. And we will put the metrics on top of the table such that any stakeholder can judge and can make their own calculations and their own mathematics, and putting the emphasis on what they consider. Absolute emissions. We learned a couple of years ago about -- and this is the best way to speak with stakeholders and say you were saying -- many of you were saying you need to put absolute emissions targets, and we did it. And we now have scope 1 and 2 operated and scope 1, 2 and 3 net. And this is something well explained with specific targets on that. E&P. We deserved a lot of attention to E&P. And scope 1 and 2 of the E&P, they have their own target in terms of methane intensity, routine flaring, et cetera, not so complicated. Now the other side is, these are the targets and metrics that are feeding these decarbonization metrics. We can explain and we can detail, which is the contribution of renewable power generation of production of renewable liquid fuels, of production of hydrogen, of production of E&P. How this fits into the carbon intensity index, so not so complicated. But look at this, this is very important and very relevant. Firm targets under any scenario. This one, carbon intensity index measured from our primary energy production. There are others that are projections that will be targets if the scenario in the world from 2030 to 2050 moves into one direction or the other. So -- and finally, sorry, capital allocation and this is something that we also got from communication with stakeholders, how much capital we are dedicating to low carbon and how much CapEx, how much capital employed. And we have firm targets for this decade and projections for 2030 to 2050. So this is -- we believe this is not so sophisticated, not so difficult to understand, this is the set of targets and the set of metrics that we are offering for you to judge our climate credentials. A small comment on this. We all know that there is a debate here on whether we should measure the Scope 3 of all the products that are produced from our primary energy production or whether we should go to the other side of the value chain and measure and target the Scope 3 of our sales. But we need to take into consideration the whole value chain. We are producing, we are buying crude oil from others. We are refining ourselves. We are getting products from other refineries. We are selling to the final end user. We are selling to others that at the same time or after hours, they are reselling and they go to the final user. So it's good to have both have metrics on looking at this side of the chain and looking at the other. But when looking at the other, which is going to be relevant from our point of view, it's going to be the end user. We shouldn't be double, triple counting the same emission every time that a molecule changes hands. So this is no way of having a science-based evaluation of things. So when we speak about sales, we will be first, giving information about which is going, to be the scope sales, which are the Scope 3 of the sales to end users. And you will see very interesting results when we communicate that because in the short term, our metric is going to be better than the one that using the primary energy. Is that good or bad? It's not good nor bad. It's just a matter that 2 different metrics means different things, if you look at this side, on the other side. Now we know that there are certain stakeholders that would like to see the Scope 3 of whatever is the biggest figure that you can get that simply speaking, I believe that this is the approach of a number of stakeholders. Okay, we will provide the information. Total sales is going to be total sales. But then we will request, okay, which is the meaning of that for evaluating the climate credentials. So this is where we are. And why we still believe that this one based on the products that are produced from your primary energy is what drives your strategy. is because here you have the capital-intensive long-term investment. Every time we put money in upstream, in new production, it's going to be -- our CapEx, which is high, it's with high intensity. And on the other side, it's for many years to come. You will continue producing from this CapEx after some years of investment, you continue producing maybe 7, 8, 20 years. So there are decisions that will drive your needle long term. If you are there, why you have to decide today that you are not going to sell oil and gas products. This is going to be driven by demand. And the decision is going to be like that. I mean if there is no demand, I will not sell product. It's a light CapEx activity, is something that I can decide according to the evolution. And of course, we would like to see the world moving into scenarios that are compatible with 1.5 degrees C, but we cannot move the world, and we have to move our company. So this is the way we are going to tackle this. But again, we would like to be providing any information, which is requested by stakeholders, but we will continue modestly defending our positions on what drives the needle of an energy company to decarbonize. I'm finishing, 1.5 because at the end of the day, we are speaking about this and that. But at the end of the day, you would like to see whether or not our carbon intensity pathway is going to be consistent with 1.5 degrees C. This is not AC. Again, this is another tool for you to judge. But we have seen a number of approaches that I believe TPI is some way like that. They say, okay, which is your carbon intensity as a company, the red one. which is going to be the net zero emissions intensity of the European Energy Agency. Probably they start here and drill on that. And because this is higher than the net zero emissions of the International Energy Agency, they say, I don't like it, okay? So this is one scenario. These are the 160 scenarios of the IPCC, that again incorporate most of the knowledge -- scientifical knowledge in the world. All -- each of these lines, you have here 160 lines, they are compatible with 1.5 degrees C at the end of the century. Some of them are not net zero in 2050, but then later on, it happens. So in this IPCC, out of the 160, there are 28 different scenarios. Some of them are here, some of them are there. that crosses the figure in 2050, 28. The International Energy Agency is one of them. So what we believe, this is our curve. This is reduction of data, and this is in terms of percentage, when you reach 100%, you are net zero. So this is another tool. This is something to look at and say, okay, this is -- or is not more or less aligned with the 1.5 degrees C word. So finishing. Very modestly, we still believe that our core metric in order to be net zero is the carbon intensity indicator which is Scope 3 defined from the products that are obtained from our primary energy production. We are very much willing giving all the information about other Scope 3. Scope 3 of sales based on end users and others. And just for any stakeholder to make their own judgment. We are working also and we will incorporate into the integrated management report of this year or next year, early next year in the general assembly. We will incorporate some further information as per TCFD recommendations, which is the financial impact on our company or the different scenarios that we are depicting. We have provided already significant information about capital allocation, et cetera, but we need to complement that which is the financial impact in terms of NPV in our company based on the different scenarios for you to judge, which is the risk -- the financial risk to which we are exposed to. And there were continuous engagement and continued proactive anticipation, definitely, we would like to participate in any initiative, which is trying to set standards and targets for our sector. So thank you very much, and we are very much willing to take any questions in the roundtable later. Thank you.

Okay. Thank you very much, Luis. So with this, we have finished the presentations we have for today. And now you see raising hands. We'll come back the order and Josu Jon will let the answers. I'd like you to say your name and the organization you work for, and we have a microphone there. The lady over there.

This is Isabel Falkenberg from Vektor Partners, a VC Fund Investing & Mobility Technologies. Thank you so much for your presentation. It's been very illustrative, and congratulations for everything you're doing. I had a couple of questions. One was more a quantitative question and the other one was more of a qualitative nature. So with regards to quantitative, so I mean, in addition to bringing, for example, partners and external investors to develop emerging technologies, everything that you have explained today, what else are you doing to ensure your CapEx will be aligned with your ambition to be carbon neutral by 2050? That's my first question. And my second, which is a little bit more of qualitative nature is with regards to this last presentation regarding your carbon intensity indicator, could you actually please explain a little bit if you consider the so-called Scope 4 emission within its calculation.

Thank you. I mean, first of all, going to your first question, I mean, let me say that we have a full commitment to decarbonize the portfolio of Repsol. In this context, what we are going to have a surge in the period '21, '25 as CapEx applied focus on low carbon initiative is going to be more or less 35% of the total CapEx of the company. I mean, it's fully aligned with the target we have to decarbonize the company, fully aligned with the targets of the evolution in our pathway of the carbon intensity index that we are doing that, of course, in a profitable way. I mean we are investing in low carbon platforms to get returns, and we are seeing that. And at the same time, I mean, the picture we have for the end of the period is to achieve a figure of capital employed in low carbon initiatives that is going to be at around 40% of the total capital employed of the company by 2030. That means that we are changing the picture of the company. What we do every time we have to approve an investment in our either executive committee of the Board, depending on the intensity and the amount of the investment is to classify this investment as an investment aligned with the energy transition. So that is the investment that they have a neutral or positive impact in the carbon intensity index evolution of the company. So our Board every time approved an investment, it knows that what is going to be the impact. Some of the reimbursements are what we call the enablers of energy transition. They could have a neutral or a small negative impact in this figure that could be compensated with some other additional actions. And on top of that, we have investment misaligned with the energy transition. That would happen sometimes because, I mean, the target we have is the evolution of this carbon intensity index. So sometimes we have to approve investment because, I mean, they are coherent with our strategy, mainly in DMP. That will have a misalignment with this. Of course, when I'm talking about this alignment, I'm going to put the borders and the constraints. We decided to be fully out of the Arctic. We decided to be out of operating neutral deep waters, the oil sands, I mean and we are focusing on exploration, mainly in activities that could be bolt-on around the current assets we have. So I mean in a coherent way, with this CapEx policy of the company, we classify the investments of our Board and our executive committee knows exactly what we are approving and what is the impact and what is the main driver in terms of the strategy of the company, that is the evolution of the carbon intensity index, as Luis explained before. I mean, this is an interesting reflection of what you define and some investors are defining the Scope 4. Scope 4, it seems to me that you are talking about -- I mean, if we are producing gas that is substituting coal to produce power. I mean that could be a way to reduce the numerator of the company. I mean we are not applying this concept in quantitative terms. So we are applying the concept of Scope 1, Scope 2, Scope 3. Scope 1, Scope 2 is clearly defined. Scope 3, I mean, you know also the meaning is, as we explained before, the primary energy will produce the impact in terms of the CO2 emission, and the methane emissions -- CO2 emissions better said, when this product is used. That I mean, qualitatively, it's an interesting concept, a concept of Scope 4 because, I mean, let me be provocative and I'm sad saying that what we are doing in the world over the last months is a transition towards the coal. And that is very sad because it's increasing in a dramatic way, the CO2 emissions. So is underlining in some way the importance of producing gas in a responsible way, of course, reducing below this [2.2%] the methane emissions of this gas produce. I mean and -- I mean agreeing the concept. I mean, we are not applying this concept in our metrics. I mean we are using what is Luis know that better than me something that could be more accepted by the investor community in these terms.

Yes. Complementing what Josu Jon is saying because the Scope 4 is a new -- is still not standardized, I would say, denomination, but it may happen. We are not using, let's say, that is -- when we put natural gas into the system, we are not using a substitution of coal because we believe that in relatively short term, at least in our core markets like Iberia and so on, there will be no coal. So we are not giving that emission shift into our calculations. What we are doing is using the emissions, what we call the emissions shift when put in renewables, you are substituting the electricity mix in the country in which you are located. And we are using that and we are -- we can quantify which is the impact of that in our carbon intensity reduction. But we clearly speak that maybe is something which is not so standard but I believe is fair, more fair and more robust. If we are investing, for instance, in Norway, this emission shift will be zero because most of the power generation in Norway, it's hydro or renewable. If you are doing that in Spain, you still get the credit of substituting natural gas. And as soon as in the energy mix, a significant part or most part of the production is renewable, then you do not take this credit anymore. So this is how we are managing what it may be ended up being called as Scope 4 emissions.

Michele Della Vigna, Goldman Sachs. Thank you for the presentation. It's quite interesting to see a technology-based ESG presentation. I had 2 questions. The first one on the EU green taxonomy. Clearly, it has its limits, but it's going to be an important metric for investors to focus on over the coming years. Could you quantify what you believe is EU green taxonomy eligible percentage of revenues and CapEx that you expect for Repsol in the near term, let's say, for this year, for instance? And is there a material difference in the calculations versus what you call effectively low-carbon CapEx and capital employed? And then my second question really is related to some of the use from the disposals that you are executing this year. You will end up with a very strong balance sheet at the end of the year after the disposals, which is great to have in this uncertain macro environment. But you made clear comments that this would accelerate your energy transition. And I was wondering how to think about organic versus inorganic investment for that incremental capital that you've got at your disposal for the low carbon transition.

Thank you, Michele. I'm going to jump into the second one on risk if you like, I think that you could answer the first one in a better way than myself.

It's true. I mean, the rationale for disposals is not, let me say, making cash. I mean, you are always making cash with disposals. But I mean in the case of the E&P, you know that over these 3, 4 years, we have put our focus in trying to put more rationale in our portfolio. We were operating in 24, 25 countries, 4 years ago. I mean, we are fully committed to be present in less countries. Now we are in 14. It's okay. I mean something in between 10, 14 is okay from our point of view. Being in countries where we could have more impact, more -- where we have more materiality. And in some way, we have a more streamlined portfolio doing that. In the case of the recent disposal of our 25% of our E&P, again, is, from our point of view, on a strategic movement. First of all, there is a clearer crystallization of value. I mean, with this valuation of $19 billion, all our E&P portfolio. Secondly, I mean, a reputed investor is taking on a stake and is endorsing not only the current asset, but also the investment and development story we have in our strategic plan for our E&P business that's important because you know that we are a company where -- let me use the term, perhaps the legacy asset of Repsol is the downstream and having -- I mean, foreign investors underlying and recognizing the value and the journey of the Repsol E&P is important. And as we said before, and you're expressing your question, I mean, we won't also give to the company more flexibility for the future in terms of accelerating this energy transition if we see opportunities for that. I mean we are, of course, getting returns is important to invest in these low-carbon businesses. In this sense, you know that we are mainly focused in organic transactions because, I mean, we are showing to the market that we are creating and making real value. The example of the renewables is a good example because I mean after investing EUR 1.6 billion, EUR 1.7 billion, the market that investors, they have recognized a value of EUR 4.4 billion for the whole business. We are getting returns evolved, 10% in almost the main part of cases in this business. We also see value in the organic growth in the industrial side. And I think that we have to compatibilize and we are doing that. This organic growth was a small in organic transactions where we could add value. I mean these transactions are going to come in the renewable business, for instance, something similar to what we did with Hecate in the United States, I mean, a small developer that is going to give us the opportunity to grow with our growth platform in a country. And I may imagine that in coming months, years, we could lose something similar in some other geographies. I mean going to the industrial business, perhaps in this alliance and partnership strategy probably we have to increase our exposure to the supply chain of wastes, raw materials in sectors that perhaps they today are not included in our activity, but are going to be crucial to develop growth, Javier and Tomas explained this morning. So I see an acceleration through these kind of transactions in the short, medium term, Michele. I think that we have to make a real effort of that. I know that I'm going to have difficult quarters in this year because let me joke my patience. I'm going to be patient and cold in coming months in terms of looking for opportunities. And I know that you, analysts and investors, you are going to direct me to - I mean to jump into the growth because we have the cash for that and so on. But I think that is important, as we said before, when we present our strategic plan, we are going to use all the excess of cash, first of all, to try to accelerate the low-carbon growth of the company, to increase the distribution for our shareholders. We are doing that. I mean you know that we amortized 75 million shares or almost 5% of the capital in May. In coming weeks, we are going to close the program we launched in July, and we are going to redeem. We are going to amortize an additional 75 million shares again. And I said when we present the second quarter results, I mean, will announce at the end of October, the dividend policy for next year and potential in coming months and years, potential new share buybacks but we are going to combine all that with the increase of CapEx in these businesses. This year, in 2022, I mean, we are going back to the pre-pandemic CapEx. I mean we are going to spend probably more CapEx this year than what we did in 2019. That means that we are starting this post-pandemic mode. We are accelerating this investment in the low carbon. And probably the four -- I have to still and can announce is that we have to be patient, cold, resist, let me use the term, having cash in our hands because I think that is very important to guarantee to our investors that we are getting returns and we are really taking advantage of these potential opportunities.

Okay. The second question, Michele, was around the European taxonomy and implications. Any question about the European taxonomy has no single answer because it's complicated. I mean it's a complicated piece of legislation. So you know that there are 2 stages and then more stages later on in order to be filtered and screened whether your activities are -- have the stamp of the taxonomy or not. If you look at the first stage, which is the qualification, say, you qualify your activities as aligned or not aligned with the taxonomy. At that level, -- there is a significant coincidence of the percentages of your activity, which is aligned with the taxonomy with our definition of low carbon. Then you enter into the more complicated second filter, and they say, what is eligible? Well, let me say, it's a little bit crazy. The second state about qualification to eligible, I will put a couple of examples. Chemicals. Chemicals is aligned with the, let's say, taxonomy, which is saying that climate change, we say, yes, it's qualified. Then what is eligible on Chemicals? Just those plans and activities that fall into the 10% more efficient fabrics in Europe. Why? I don't know. But you are taking just 10% of everything which is qualified, you are taking that out of the taxonomy. Same for hydrogen, same for biofuels. If you -- and you see even in consistency, the European taxonomy for eligible in hydrogen and biofuels are excluding things that are being promoted by the renewables energy directive of the European Union. Why? I don't know. So let me be as critic as that. I mean, for qualification, we are there. Low carbon and qualified aligned, I would say, is okay. When you enter into eligibility and what they call eligibility is a little bit of a mess. Then the European taxonomy say, okay, don't worry too much about this because this is not going to be prescriptive. It's just an orientation for investors and so on. Okay? We expect this is just for orientation because otherwise, there is a lot of capital that will move from Europe to the States. Now they have the Inflation Reduction Act. So we need to be as assertive as that. So let's see how things evolve.

Irene?

It's Irene Himona, Societe Generale. I had 2 questions. Firstly, hydrogen from sunlight. I realize it's early days. I wonder if you can give us a sense of the energy efficiency gain of that process versus electrolyzers and therefore, any potential cost advantage. Secondly, on asset disposals, if I can come back from a different angle. You have sold a 1/4 of your renewables and 1/4 of E&P. You brought in private equity experts. Can you please help us understand the new constraints introduced on Repsol by your new partners as a result of these deals? In other words, what is it that you will have to do now, which you didn't have to do before the disposals? .

So Javier, probably you are the most qualified to answer the first one. Mic.

Can you hear me now?

No.

No.

A bit off, Javier.