Demand reduction or destruction Europe's industry faces a tough winter.

we are in a period of record high energy prices and there are concerns that this could lead to demand destruction on an industrial scale I spoke to several Market participants about their expectations for the coming year well we do expect in the gas sector a reduction in industrial sector we already see a reduction of cash demand about 15 percent but the Outlook is not good because we are going to expect industrial producers to shut down either completely or in part-time which will additionally reduce the gas Demand on the electrical side is will have the same impact if a industrial consumer reduces its its gasometer also reduces electricity demand we don't expect something in the household sector right now unless every private person is going to reduce its heating temperature at home some fear that there could be a chain of major industrial closures over the coming year a lot of industrial players they sell their products on forward contracts for for the next half year or maybe one year in the past they still had obligations to the to deliver the products and they had a certain price I think now those contracts have been renegotiated the price has to be higher and I think the result is going to be less competitiveness for the European industry and and closers unfortunately demand destruction will also impact the European emissions training scheme and carbon prices of course industry big part of the UHS so it will have have an impact uh however I think I mean we don't see too much impact at the moment I think like the increase in power sector emissions are currently outweighed the demand disruption risk and then on the other hand let's say that they will be quite severe of course it will have an impact on prices but at the same time we have the market stability Reserve which worked when when we had the demand disruption during covet so like this Market had the certainty that okay if we have a demand disruption the market stability Reserve will kind of counter affect or kind of put the safety net to the UTS to keep prices from crashing and if there was an economic recession what would that have a what kind of impact would that help us well I I mean like going back to to the amount of Destruction first probably I think it's um the input is going to be twofold right so you have on the one hand kind of the reduced emissions from the industry side which I think as you alluded to as well is going to be outweighed a bit is by the increase in prohibitional coal-fired power stations coming online right so there is a bit of a netting effect I think the sentiment effect is going to be much more visible in the markets um which I think also kind of connects to to your question on on the economic recession so I think we're going at the moment the carbon Market is is a bit looking through the potential upcoming crisis on the economy side right so um which then will include the mattress Direction but demand instruction is going to be a first visible sign coming from the gas price and power price setup and then this will Ripple on into a more severe economic crisis and I think that is certainly something that the car market will not be able to ignore while it can't be easy being a politician in the current environment policy makers should avoid short-term Market fixes there will be overwhelming pressure for them to act in some way and the reality is in the current market there are a lot of losers a lot of people experiencing pain because of the high prices but there are also a lot of winners and there are people experiencing wind for profits and very good revenues through through this period and the likes of unhedge Renewables nuclear generation uh the likes of uh other gas-fired plants even that are earning substantial clean spark spreads with these prices so I think overall my message to policy makers would be not to have a knee-jerk reaction in terms of totally disrupting and scrapping the current market design intervene in a way that enables some redistribute solution of that overall value in the market that helps some of the more vulnerable customers recognizing that not all Industries and not all end consumers can be fully shielded from the impact of the current price levels that we're experiencing