How the EU will introduce energy labels on Bitcoin miners
The European Commission (EC) issued an update on the energy strategy to be adopted by the EU in the coming years; this could lead to significant changes for Bitcoin miners and crypto miners. The Commission is moving forward with the European Green Deal and intends to improve the region’s energy efficiency by integrating renewable energy sources.
In that sense, the commission claims it wants to help consumers “embrace the benefits of the green transition” by adopting a series of steps. The Commission acknowledges the technological advancements occurring worldwide, with the proliferation of Bitcoin miners, blockchain technology and data centers.
The Commission therefore wants to “decouple” the information and communication technology (ICT) sector from the energy footprint. Commissioner for Energy Kadri Simson said the following about this initiative:
The European Green Deal and making Europe fit for the digital age are two key priorities for this Commission and go hand in hand. The aim is to make our energy system more efficient and ready for an increasing proportion of renewable energy sources. For this we need more innovative digital solutions and a network that is much smarter and more interactive than it is today. Today’s action plan will help to release the potential of digitization of the energy sector and the important energy savings that this can provide, to the benefit of all consumers.
How will Bitcoin miners be affected by EU plans?
As part of its energy plan, the commission announced the implementation of digital tools and other services to “help” consumers keep costs under control. In addition, the project considers improving the region’s cyber security in favor of cross-border flows.
For Bitcoin miners and crypto miners for the Proof-of-Work (PoW) consensus, the initiative is considering implementing a “token” system. These measures could jeopardize the operation of crypto miners, at least for the Eurozone. The commission proposed:
(…) an ecolabel scheme for data centers, an energy label for computers, measures to increase transparency about the energy consumption of telecommunications services and an energy efficiency label for blockchains.
The commission failed to provide further details about the token system or which blockchains might fall under their energy-intensive and energy-efficient classification. In the past, senior members of European governments expressed concern about Bitcoin miners and their alleged negative impact on the environment.
In future updates, the commission claims it will provide tools and methods to calculate these measures and the climate impact of blockchain and digital technologies. Meanwhile, the crypto industry is facing a new period of uncertainty regarding a change in its approach to crypto, digital assets and Bitcoin miners.
The chart below shows that Bitcoin miners use 253 Terawatt/hour (TWh), or less than 0.15% of total global energy, and generate 0.09% of global carbon emissions. Despite these calculations, governments and high-ranking officials continue to condemn the cryptomining industry.
