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ICIS model a scenario where Russian natural gas flows are cut off and eurozone inflationary pressure increases. This leads to reduced industrial EUA demand, shown in chart 1.If there is heavy additional use of carbon intensive coal and lignite fuels for electricity generation could partially offset the drop in industrial EUA demand.Forecast cuts to industrial electricity consumption of 36TWH in 2023 and 43TWH in 2024, and reduced EUA hedging demand through 2025 due to the economic shock are seen to further reduce energy sector carbon hedging demand. Reduced EUA demand per year comes at a time of unprecedented market tightness as cumulative supply begins to drop below EUA demand. This means that though the outlook is still bullish, less emissions reductions are likely to be required to balance supply and demand in 2023, which should moderate price increases. The analysts see EUAs reaching prices in the low to mid-90s of euros in 2023, vs. their previous price expectation over 100 euros.