EU to Target Energy Use of Crypto Miners as Union Depends Less on Russian Energy

Authorities in Brussels are taking steps to reduce energy consumption, including in cryptocurrency mining, as the EU faces limited energy supplies from Russia, whose power it has tried to reduce. addiction. The new energy efficiency labeling must respond to the growing electricity consumption in the crypto industry.

The EU will develop an energy efficiency label for data centers amid rising consumption in the mining sector

The European Union plans to introduce an energy efficiency label in a bid to counter rising electricity consumption in data centers such as those that mine cryptocurrencies. According to Bloomberg, the EU will also urge member states to target the energy consumption of crypto miners as it seeks to navigate the winter on far less Russian gas and other energy than before the sanctions imposed for the war in Ukraine.

Citing a draft proposal, the report revealed that the executive arm of the EU wants to work with international partners to adopt a ranking measure that will encourage more environmentally friendly cryptosystems, such as the proof-of-stake protocol. (PoS) as opposed to Energy-Intensive proof-of-work (PoW) mechanism used by Bitcoin.

“Just as their use has increased dramatically, so has the energy consumption of cryptocurrencies,” notes the European Commission in an action plan. “In leveraging the use of cryptocurrencies and other blockchain technologies in energy markets and trading, care must be taken to use only the most energy-efficient versions of the technology,” emphasizes the Commission.

Controlling the energy consumption of the information and communication technology (ICT) sector, in particular via an “environmental labeling system for data centers… and an energy efficiency label for blockchains”, is one of the main measures envisaged in the document announced on Tuesday. In a press release, the Commission explained:

With data centers and the growing appetite for online services demanding ever more resources from our energy system, today’s plan also outlines ways to decouple the energy footprint of the ICT sector from exponential growth. Datas.

The move comes after an earlier attempt to ban PoW mining through the upcoming Crypto Asset Markets (MiCA) regulatory framework, which sparked backlash from the Old Continent’s crypto community and industry, as this was tantamount to a Bitcoin ban.

The controversial provision was eventually removed from the latest bill, but other texts require providers of service assets to disclose the energy consumption and environmental impact of the assets they work with.

PoS mining, which the Ethereum blockchain recently migrated to, uses far less energy than proof-of-work minting of digital coins. Although the EU only accounts for around 10% of PoW crypto mining, any new policies introduced by the bloc of 27 in this area can potentially have global effects, Bloomberg pointed out.

The cited document also reveals that the European Union will produce a report assessing the climate impact of the industry by 2025 and call on EU countries to end all tax relief for cryptocurrency miners. Brussels also insists that member states must be ready to stop mining activities in the event of a power shortage.

Keywords in this story

consumption, Crypto, crypto miners, crypto mining, Cryptocurrency, document, draft, efficiency, Electricity, Energy, EU, european, european commission, European union, TAG, labeling, labeling, labels, power, proposal, report, Russia , Sanctions, Ukraine, War

What is your opinion on the EU’s attempts to reduce energy consumption in the crypto mining sector? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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