To officials from Sweden’s environmental regulatory body have raised concerns over the rising carbon footprint from the proof-of-work crypto mining activities.
The state power company says crypto miners can serve as load balances on the grid.
Sweden has been one of the most attractive destinations for cryptocurrency miners due to the availability of surplus and low-cost power energy. However, as the industry expands fast, Swedish environmental regulators have expressed concerns.
The regulators have proposed an EU-wide ban on the mining of proof-of-work (PoW) cryptocurrencies. Erik Thedéen and Björn Risinger, the two director generals of Sweden’s Financial Supervisory Authority and Environmental Protection Agency made a joint statement last week.
These two officials have demanded a pan-EU ban for the mining of energy-sensitive digital currencies. These officials also believe that the mining operation can undermine their goals towards climate neutrality. Besides, they could also undermine the efforts to meet the Paris Agreement goals.
The two government officials cited the extreme energy usage in the mining of digital assets like Bitcoin (BTC) and Ethereum (ETH). The mining of these two cryptocurrencies together consumes twice as much electricity as that of the entire Sweden. The two officials noted:
Our conclusion is that policy measures are required to address the harms caused by the proof-of-work mining method. It is important that both Sweden and the EU can use our renewable energy where it provides the greatest benefit for society as a whole.
The two officials proposed several policy options to tackle this issue. For example, Sweden and other countries can introduce a tax on the energy-sensitive production of Bitcoin. Another option is increasing awareness regarding the climate problems relating to crypto-assets.
Sweden’s state-owned power company refutes crypto mining claim
Vattenfall, Sweden’s state-owned power company isn’t quite convinced with what the officials have proposed. The company noted that crypto mining isn’t necessarily the problem. Rather, it notes that crypto mining holds the potential to provide solutions to some of the challenges faced by energy producers.
Vattenfall’s Head of Physical Power Management, Henrik Juhlin, elaborated this further speaking to local broadcaster SVT. Juhlin said that crypto mining provides an ideal way to balance the load on electric grids, especially when the power supply varies.
He further added that this holds true for countries like Sweden that rely much on renewable energy sources like solar and wind. Juhlin noted:
[The crypto miners] can both reduce and increase their consumption [of energy]. It can work as a buffer, so to speak, for the production of energy.
He further noted that miners can consume electricity whenever there’s a surplus. Similarly, they can turn off their units during times of shortage. This way they can effectively balance the load management of the grid.
The Vattenfall representative also noted that a ban on crypto mining in the EU can possibly have an opposite effect to what the policymakers want. He added that if mining activity escalates in part of the world depending on coal energy, it would overall rise the carbon footprint.
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