Price of crypto: Report says US bitcoin is as dirty as 6 million cars – Business

The carbon footprint of the US bitcoin industry is skyrocketing, a report by environmental groups found on Friday, now rivaling the emissions from six million cars each year.

The groups urged US states to consider banning new mining to protect the planet.

Emissions from the energy-hungry sector could undermine goals to tackle climate change, said Jeremy Fisher, an energy analyst at the non-profit Sierra Club and co-author of the report.

“We are at an inflection point,” he said. “We’re trying to rapidly decarbonize … Bitcoin mining has the potential to undo some of that progress.”

The industry’s carbon footprint, the groups said, was 27.4 million tons from mid-2021 through 2022 — three times the largest U.S. coal plant — or close to the annual emissions of six million cars, according to an Environmental Protection Agency calculator.

Bitcoin mining involves a network of energy-intensive computers that verify bitcoin transactions and compete with each other for new coins. Only 3.5 percent of global bitcoin mining was located in the United States in 2020 — now it’s approaching 38 percent, according to a recent White House study.

The groups urged US states to consider blocking new mining operations. This year, the New York legislature passed a law to stop any new operations in the state that run on fossil fuels.

Bitcoin industry groups say the cryptocurrency sector is greener than other heavy industries and uses a relatively small amount of electricity — between 0.09 and 1.7 percent of total U.S. power, according to the White House report.

The Bitcoin Mining Council, which represents some major players in the sector, has released data showing that more than half of the power used by miners comes from renewable sources.

The municipality has not responded to a request for comment.

“Bitcoin is a technology with a lot of positive and negative climate potential,” said Elliot David of Sustainable Bitcoin Protocol, a company that works with miners to promote clean energy use.

“It’s a matter of perspective – if you compare it to other industries, like cement for example, it’s relatively clean,” he told Thomson Reuters Foundation.

“But every industry must take part in tackling the climate crisis.”

Mining boom

The report, co-authored by environmental law nonprofit Earthjustice, draws from public documents, utility records, regulatory filings and financial disclosures, as well as press reports and testimony from activists across the United States.

Earlier this year, a coalition of green groups launched a campaign to pressure Bitcoin to change its software – known as “proof-of-work” – to a less energy-intensive method, known as “proof-of-stake”.

“We’ve seen a relatively large increase in mining here in the United States very quickly since it was banned in China,” said Mandy DeRoche, an attorney with Earthjustice, which represents clients exploring how to challenge local mining.

“And we’re concerned about the direction it’s going.”

In 2021, China severely restricted bitcoin mining, prompting many firms to relocate or expand their US presence.

Earlier this year, Democratic lawmakers asked publicly traded bitcoin mining companies to disclose what energy they use.

Environmental groups say that the industry’s environmental record, energy use and long-term impact on local communities have largely been hidden from scrutiny.

Friday’s report highlights cases where bitcoin miners have extended the life of fossil fuel plants, pushed up electricity prices, strained the power grid and broken promises to local communities.

Green Bitcoin?

Some miners say they benefit from energy grids by providing stability and funding for renewable power generation.

In Texas, some miners have entered into agreements with renewable energy providers and signed up for flexible use to smooth out demand.

Others label themselves as green; listed CleanSpark says the energy is more than 96pc carbon-free.

“It’s not just that miners can be more efficient and use clean energy for their operations,” said Zach Bradford, CEO of CleanSpark. “But that bitcoin mining could actually accelerate the low-carbon energy transition.”

But in Kentucky, bitcoin mining has moved in the opposite direction, said Lane Boldman, executive director of the Kentucky Conservation Committee, an environmental group.

Many of these operations are going to support bad or dirty energy projects – that’s exactly what happened here, she said.

The report also examines what it says are the industry’s unsubstantiated environmental claims.

These include a reliance on carbon credits or renewable energy “offsets” — tactics that the Sierra Club’s Fisher said aim to hide the true impact of crypto-mining on the climate.

“There’s a lot of greenwashing going on,” he said.