Increasing electrification of light-duty vehicles is anticipated to grow strongly, according to ExxonMobil’s recently released Outlook for Energy: A View to 2040.

“In total, full hybrid, plug-in hybrid, and electric-only vehicles will be approaching 40% of global light-duty vehicle sales in 2040, compared to about 3% in 2016,” the report projects.

The Outlook for Energy is ExxonMobil’s long-range forecast developed through data-driven analysis, reflecting broad knowledge of energy markets and the expertise of economists, engineers and scientists. It examines energy supply and demand trends for approximately 100 regional/country areas, 15 demand sectors and 20 different energy types. ExxonMobil uses the forecast as a foundation for its business strategies and to help guide multi-billion dollar investment decisions.

Other key findings from this year’s Outlook include:

– In 2040, oil and natural gas will continue to supply about 55% of the world’s energy needs; oil continues to provide the largest share of the energy mix with demand rising about 20%, driven by commercial transportation and chemicals.

– Nuclear and renewable energy sources are likely to account for nearly 40% of the growth in global energy demand to 2040.

– The share of the world’s electricity generated by coal is expected to fall to less than 30% in 2040 from approximately 40% in 2016.

The report also highlights ExxonMobil’s analysis of 2 degree Celsius (2 C) scenarios, in response to a 2017 shareholder resolution seeking additional climate disclosures about the impacts of technology advances and global climate change policies on the company.

The Energy & Carbon Summary and a new special section in the annual Outlook for Energy include consideration of the impact on future energy demand from an analysis of multiple lower-carbon scenarios published by the Stanford University Energy Modeling Forum. The forum’s scenarios are publicly available and are used for analytical purposes, including by the United Nation’s Intergovernmental Panel on Climate Change.

The global scenarios assessed by ExxonMobil, which include a full range of energy technologies, contemplate limiting global greenhouse gas (GHG) emissions to have a likely chance of holding atmospheric concentrations to the equivalent of 450 parts per million CO2 in 2100; these scenarios are generally considered to be consistent with pathways that would limit global average temperature rise in 2100 to 2 C above pre-industrial levels.

The company’s analysis of these 2 C scenarios examined the mean of the annual average demand growth rates of the various model outputs between 2010 and 2040 for multiple sources of energy. This analysis of these 2 C scenarios indicates: total energy demand increases about 0.5% per year; oil demand decreases about 0.4% per year; natural gas demand increases about 0.9% per year; coal demand decreases about 2.4% per year; and renewables demand increases about 4.5% per year.

All energy sources remain important across the assessed 2 C scenarios to 2040. As a result of ongoing demand coupled with natural hydrocarbon field decline, trillions of dollars of additional investment in oil and gas production will be required, including to meet a 2 C pathway. Based on the average growth rates of assessed 2 C scenarios, natural gas demand is estimated to increase to 445 billion cubic feet per day by 2040; oil demand is estimated to decline to 78 million barrels per day by 2040.

“Our job is to supply the energy the world needs in an environmentally responsible way,” said Darren W. Woods, chairman and chief executive of Exxon Mobil Corporation. “It’s a dual challenge – we need to meet society’s growing need for energy while addressing the risks of climate change. We are committed to being part of the solution by investing in new technologies that can provide economic solutions on a globally scalable basis. ”

“Since 2000, our investments to develop lower-emission energy solutions have totaled about USD 8 billion,” Woods said. “We are deploying technologies such as cogeneration and carbon capture and storage, while researching next-generation solutions such as algae biofuels and advanced carbon capture using fuel cells. Continued research will be critical.”

With growing global populations and economies, key levers to address the risks of climate change include further energy efficiency improvements and reducing the GHG intensity of the world’s energy system. “For our part, we continue to take action to mitigate our emissions and help consumers lessen their GHG impact,” Woods said.

ExxonMobil’s Outlook for Energy: A View to 2040 describes a rapidly growing global population and rise in living standards in developing countries that will drive a growth in worldwide energy demand of about 25% from 2016 to 2040. At the same time, energy efficiency gains and gradual reductions in the GHG intensity of the energy system will help to moderate energy use and reduce by nearly 45% the carbon intensity of the global economy, according to the report.

Emerging economies in countries that are not part of the Organisation for Economic Co-operation and Development (OECD) will account for essentially all energy demand growth, led by an expanding Asia-Pacific region.

As prosperity rises, electrification continues as a significant global trend. Energy demand for power generation accounts for about 50% of global demand growth, with much of that coming from non-OECD countries.

“Natural gas use is likely to increase more than any other energy source, around 40%, with about half its growth for electricity generation,” said T.J. Wojnar, ExxonMobil’s vice president for Corporate Strategic Planning. “The abundance and versatility of natural gas, in addition to its significant air quality benefits, make it a valuable energy source to meet a wide variety of needs, while also helping the world to shift to a less carbon-intensive source of energy.”

Among the most rapidly expanding energy supplies will be electricity from solar and wind, together growing about 400%.

While energy demand will grow, global carbon dioxide emissions are likely to peak by 2040, at about 10% above 2016 levels, as energy sources shift toward lower-emission fuels such as natural gas, renewables and nuclear.

The Outlook predicts a rise in electric vehicles as well as efficiency improvements in conventional engines. This will likely lead to a peak in liquid fuels use by the world’s light-duty vehicle fleet by 2030. However, oil will continue to play a leading role in the world’s energy mix.

“Our in-depth analysis shows that even if every light-duty vehicle in the world was fully electric by 2040, the demand for liquids could still be similar to levels seen in 2013,” said Wojnar. “This is because of growing demand from commercial transportation and the chemical sector.”