Norway could support the European Bitcoin mining ban as the minister describes energy consumption as "difficult to justify"
Norway is considering policies to combat the environmental impact of crypto mining, a government minister told Euronews Next.
"Although crypto mining and the technology behind it could be some potential long-term benefits, it is difficult today to justify the extensive use of renewable energies," said Norwegian Local Government and Regional Development Minister Bjørn Arild Gram.
“We are currently considering possible policy measures to address the challenges related to crypto mining. As part of this work we will look at the solutions proposed by the Swedish regulators and our aim would be common European rules in this area, ”he added.
While Gram did not provide details of the policies under consideration, if Norway were to follow the example of Swedish regulators, plans could include crackdown on activities such as bitcoin mining, which use significant amounts of electricity.
The European Commission, which would enforce any crypto regulation at EU level, told Euronews Next it is encouraging the industry to migrate "applications" from energy-intensive proof-of-work blockchains to less demanding protocols like proof of stake and hybrid consensus models .
Environmental costs of crypto mining
Gram's comments come after the directors of Sweden's financial services and environmental protection agencies called for an EU-wide ban on crypto-mining evidence of work after the energy consumption of bitcoin miners in the country rose by "several hundred percent" between April and August this year .
As part of the proof-of-work system, computers must solve mathematical puzzles to validate transactions that take place on a given network.
The process is said to become more difficult as the number of blocks of validated transactions in the chain increases, which means that more computing power - and therefore energy - is required.
 |
| Bitcoin miners were drawn to Nordic countries like Norway, Sweden, and Iceland because of their abundant renewable energies |
"Sweden needs the renewable energy that crypto-asset producers are seeking to climate change our essential services, and the increasing use by miners threatens our ability to comply with the Paris Agreement," said Erik Thedéen, director of the Swedish financial regulator , and Björn Risinger, Director of the Swedish Environmental Protection Agency, said.
Both Norway and Sweden and the Nordic nation of Iceland have become popular destinations for crypto miners due to their abundant renewable energies and low electricity prices.
Figures from Eurostat showed that Norway had the lowest electricity costs for non-household consumers in the European Economic Area (EEA) in the first half of 2021. Over 90 percent of the country's energy comes from renewable hydropower sources.
"Overall, we want our renewable energies to be used in a value-adding manner and to support the transition to a climate-neutral society," said Gram.
The opportunity cost of using renewable energy for crypto mining became a hot topic in Norway after a 2016 decision to give data centers tax breaks to lure them into the country.
In 2018, the legislator Espen Barth Eide, now Norway's newly appointed Environment Minister, raised the issue in the country's parliament.
"How is the minister going to prevent Norway from becoming the world's bitcoin mine and preventing the electricity consumption of a speculative economy from crowding out important electricity-intensive Norwegian industry?" he asked.
Europe's "digital transformation"
When Euronews Next asked the European Commission if it would support a pan-European policy to ban proof of work mining, a spokesman said it was already working on promoting "more sustainable forms of blockchain technologies".
The commission also said it had set "ambitious emissions reduction targets" for the digital sector and encouraged less energy-intensive blockchain technologies by funding startups and directly developing a public sector blockchain network.
"The question of the effects of the use of crypto mining as a practice on energy consumption and emissions also has a strong international dimension," said the spokesman.
"Most cryptocurrency mining takes place outside the EU, and these countries may need to consider this in terms of their own emissions reduction strategies, although the Paris Agreement does not specifically prohibit or even aim to mine cryptocurrency."
"However, the Commission is aware of developments in countries like China, where cryptocurrency mining has been banned, and will continue its regular discussions with Member States, including Sweden and its authorities," they added.
Post a Comment