Two top officials in Sweden are calling for a EU-wide ban on energy-intensive cryptocurrency mining, warning crypto operations are preventing the country from hitting climate targets.
- Swedish officials want a EU-wide ban on “proof of work” crypto mining.
- They warn should the energy intensive mining operations remain legal and continue to grow, the country and the EU would not be able to hit climate targets.
Top Swedish officials are calling on the EU to ban energy-intensive cryptocurrency mining in order for the European bloc to meet its climate goals.
Erik Thedéen, director of the Swedish Financial Supervisory Authority, and Björn Risinger, director of the Swedish Environmental Protection Agency, are concerned with cryptocurrency’s rising energy usage and warn that if the sector continues to grow, Sweden might not be able to meet its obligations under the Paris Climate Agreement.
The two financial and environmental regulators wrote in an open letter urging for an EU-wide ban on “proof of work” cryptocurrency mining, which is a system used to mint a number of cryptocurrencies including Bitcoin and Ether. Such operations require upwards of thousands of computers and built-in cooling systems to prevent overheating, and uses up incredible amounts of energy.
According to the two officials, the energy consumption of Bitcoin mining in Sweden between April and August this year soared “several hundred per cent,” and has reached a usage equivalent of 200,000 households. They argue that “the social benefit of crypto-assets is questionable” and companies that trade and invest in crypto assets should be prohibited from describing their business activities as environmentally sustainable.
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As the cryptocurrency industry faces greater scrutiny, especially for its high carbon footprint, as well as China’s recent ban on Bitcoin, many companies have made attempts to be more environmentally friendly by carbon offsetting or using renewable energy to power their operations.
Thedéen and Risinger however, claim that this shift is diverting renewable energy from industrial, transportation and domestic uses, making it all the more difficult for the country to meet their target of slashing carbon emissions by 63% by 2030 and 85-100% by 2045. The EU would also struggle to limit global temperature increase to under at least 1.5C.
“Sweden needs the renewable energy targeted by crypto-asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” Thedéen and Risinger wrote in the letter. “If we were to allow extensive mining of crypto-assets in Sweden, there is a risk that the renewable energy available to us will be insufficient to cover the required climate transition that we need to make.”
The same energy needed to mine a single Bitcoin could be used to drive a mid-size electric car 1.8 million kilometres, which is equivalent to about forty-four laps around the globe. Currently, 900 bitcoins are being mined every day. With worrying stats like this, the Swedish officials contend that cryptocurrency mining “is not reasonable use of our renewable energy”.