So for me, that’s — Adani Green as a portfolio, we share part of this portfolio, the equivalent of 1.4 gigawatts together, but 50% of it being owned by TotalEnergies. So TotalEnergies is protected, and I think it helps our core to consolidate Adani Green to continue with growth, which is as a shareholder of Adani Green or interest. That’s the first point. And we are, I would say, in the conditions in which we have discussed that deal are attractive in terms of metrics for TotalEnergies as a company. On the chemicals in Europe, but we know that chemicals in Europe are clearly quite linked to GDP. The GDP in Europe is softening more than that. So you have less demand in Europe. So like it was very good 2 years ago. Today, it’s a reverse of it.
So that’s part of the value chain, our exposure to Europe in chemicals is not so strong. I mean, they’d be clear for us, the polymers part are compared to the other part because, in fact, what we make more money on refining and on naphtha, we make less money on the petrochemicals in Europe, all our strategy, by the way, is not to develop any new capacity in Europe to be clear. We did not announce, I think, since I am I’ve been in charge of Refining & Chemicals, 12 years ago, I don’t think you announced a single extra capacity in chemicals of the [indiscernible] in Europe. I think you have even more listened to either closing or selling some of them. So I don’t think it’s the best place to invest, to be clear. All the strategy in chemical TotalEnergies has been more either based on cheap feedstock, either in the U.S. or in Saudi Arabia with [indiscernible], but [indiscernible] is targeting markets in China, India, on the East.
So that’s where the demand is. So I would say for TotalEnergies, in fact, it’s more managing the history, the historical portfolio in the best possible way. And again, when I’m looking today to my — to our position, refining, petrochemicals and polymers in Europe, that is quite positive today, by the way, it contributes to a good return on capital employed. So that’s what I could comment. For next year, I don’t expect much more, okay.
Operator: The next question is from Biraj Borkhataria of RBC.
Biraj Borkhataria: Two quick ones, please. The first 1 is on your debt profile. Could you just confirm what proportion of your gross debt is on sort of long-term fixed interest rates? And then the second question is on the recent U.S. wind bid. There’s a provision in the PPA that suggests the — it goes up with industry-specific inflation. I was wondering what you assume inflation wise for that kind of project from here to FID?
Jean-Pierre Sbraire: Yes, perhaps I will take the first question. More than 80% of our debt have been fixed a couple of years ago. So that means that we benefited on that portion from very low coupon around 3%. And so the remaining is flexible.
Patrick Pouyanne: Clear answer. Second answer is quite clear, but we have — within today and the FID, we have more probably 3 years to work. So you will have inflation over the next 3 years. So it might be, I think, let’s say, 5% to 10%, probably in the 3 years, we’ll see. But again, there is a provision which, I would say, protect us until the FID then, of course, we’ll take the risk of execution, but I think it’s a fair protection, which is offered by the New York State to the investors. So we were — it’s 1 of the element of the bid and of the discussion negotiation we managed to obtain. So we are satisfied. Again, we’ll see if it’s higher than that, but we don’t expect much more than that.
Operator: Next question comes from Martijn Rats of Morgan Stanley.
Martijn Rats: I just want to follow up on the question that Biraj actually just asked about the debt. Because interest rates continue to rise and rise and Total bonds are not escaping that some of the longer-term debt that you hold is now sort of yielding 6%. And I was wondering, in addition to the mechanical impact that this may have on the interest expense every quarter, how this affects possibly sort of any investment decision making, particularly in the new energy areas? I mean the question has been put to me, can we have an energy transition when U.S. treasury yields, the 10-year or treasuries yields are 5% and it’s kind of sort of an intriguing one. Therefore, can I ask you how are these rising interest rates impacting your investment decision-making? And also, what are you seeing in others, particularly in sort of CapEx intensive areas like renewables? What is the impact that you’re seeing?
Patrick Pouyanne: The answer is quite clear, you transfer the interest rate to the customer, I will tell you. So the question is, does it affect the space of the transition? It might, but it’s clear that it’s against the idea that will contribute maybe, by the way, to have segment, which will stop growing price going down and down, but it has already an impact. In fact, I can tell you, we — in fact, in the U.S., take the U.S. as a good example. You have the IRA on 1 side, which has, but we also have the obligation to make projects with solar modules being manufactured in the U.S. It has an impact on the cost of the project. So this cost of the project today, when we discuss and renegotiate — by the way renegotiate PPAs with our customers, it has an impact on the high side.
So today, you signed the — last PPA we signed this recently with Saint-Gobain in the U.S. is reflecting. Let’s be clear, higher cost of manufacturing in the U.S. and higher interest rate. Because when we bid, we don’t use a 3% of TotalEnergies for when we price project in the [indiscernible]. We are pricing a higher one, which makes us more profitable. We compete with people. We have competitors, which have, in fact, a higher cost of debt. So we use their cost of debt, and we will — maybe we benefit from that to win the deals, but we keep the difference from — for us, in fact, as a company. So I would say, yes, you’re right, it might affect the pace. But I think, we are back in a normal world. It’s much better for the world economics to have a 5% interest rate world rather than 0%.
I think in particular, for our companies, oil and gas companies, with a strong balance sheet and cash delivery. I think it’s — we have — it was for me the anomaly we’re during 5, 10 years, having this 0% world after the 2008 crisis. It was a way to absorb it and [indiscernible], but for me, it’s that more the anomaly than the country. So I think for me, it’s a new normal. We have to integrate it. It will have an impact, probably, of course, on the competitor, which have a very — we have more leverage than us. And from this perspective, the strength of the balance sheet of TotalEnergies is an asset. And I think that’s why we continue to — part of the cash flow will continue to strengthen the balance sheet.
Operator: The next question is from Lucas Herrmann of BNP Paribas.
Lucas Herrmann: A couple of straightforward ones, I think. Firstly, just on your reporting for the last — as far as — as long as I can remember, actually, Patrick, 20-odd years divisions may have changed, but your reporting method has always been consistent on a quarterly basis. And yet today, you’ve elected to alter it. And I just wondered whether there was any particular reason that you’re disclosing more around cash or other items with the other things that you’re trying to emphasize to us? And the second question, just staying with that, some of the adjustment items in Integrated Power, I notice that there’s a EUR 400 million, EUR 420-odd million asset impairment provision charge taken this quarter. Just if you could provide some further detail on what that impairment concerns? That’s it.
Patrick Pouyanne: On the second one, it’s written. I think this business that we have impaired some of the goodwill when we made some acquisition linked to customers, in fact, because in fact, when we made the acquisition of some of these smaller [indiscernible] companies that was part of the goodwill that was allocated to the customer portfolio, but the customer portfolio as a churn, which is quite high. So it’s a certain point. We — when we reviewed the situation, what we do regularly with our auditors, we decided that this goodwill might be — it would be — it is better to [indiscernible] that’s right in the case. So that’s what we’ve done.
Jean-Pierre Sbraire: It’s a normal review that we have to do. And so we’ve done that.
Patrick Pouyanne: Okay. Then — or it’s again for the CFO, but I think it’ll be clear I’m transparent with you. It’s — we had some exchange like other companies with the SEC, but the — as you know, we are using non-GAAP KPI, I would say, indicators. We have to reconcile the gap at the non-GAAP. So it was quite a formal exchange during the last month and Jean-Pierre has spent some time. But honestly, nothing fundamental. At the end of the day, we concluded but with them, but they wanted to have a clear reconciliation between the GAAP and the non-GAAP. And so some of the tables has to be just complemented. I mean.
Jean-Pierre Sbraire: Some has to be removed and some has to be [indiscernible].
Patrick Pouyanne: That’s why you have that moving. That’s a change that changes. So it’s honestly, we reviewed it with the Audit Committee and the Board, and there was nothing major. It’s more formal. But I think they are right. We have a gap, and we need to give clarity between the IFRS, I would say, IFRS referential and what we use. So that’s the reason why you have seen some moves. But it’s — thank you, Lucas, because it demonstrates that you are very precise in reading all our reports including all the pages and all the tables. So I recognize your long-standing position following TotalEnergies, but I know you for almost 20 years. So that’s why you are right to support. But again, it’s modernization in line with good practice and we support it.