Investing.com -- Artificial intelligence could drive a major shift in global energy demand and carbon reduction efforts, according to a new report from Shell (LON: SHEL ) Plc, initially covered by Bloomberg.

The report is said to highlight AI’s potential to accelerate productivity, particularly through automation in manufacturing, while also helping to halve the energy system’s carbon intensity by 2050.

According to Bloomberg, Shell projects that oil demand will continue to grow by three to five million barrels per day into the 2030s before peaking and gradually declining.

Natural gas consumption is expected to rise into the 2040s, while petrochemical use could extend into the 22nd century. Meanwhile, coal is predicted to stop growing as a power source before 2030, with natural gas following by 2035, reported Bloomberg.

The report marks Shell’s first global energy outlook in two years and the first time it has factored AI into its projections.

While the scenarios outlined do not represent Shell’s corporate strategy, all predict that global temperatures will exceed the 1.5°C target set by the 2015 Paris Agreement.

However, Shell sees AI as a key player in accelerating decarbonization across industries, from transportation to manufacturing. The report emphasizes that achieving net-zero emissions by 2050 will require widespread adoption of carbon management and removal technologies.

With AI’s growing influence, the energy landscape could undergo a transformation in the coming decades, with Shell’s scenarios forecasting across-the-board electrification of the energy system, and a world where carbon-removal technologies scale.