Crypto Mining’s energy consumption is to fall due to EU action
- The need to stop increasing energy consumption in crypto mining.
- The regulatory procedures implemented.
- The reason for the last situation
The European Commission has announced an action plan for the global expansion of the EU’s energy systems. It has launched the REPowerEU plan and also the European Green Deal. The EU proposes to stop the process of mining crypto as it is a high energy process.
Its sole aim is to “help improve the efficient use of energy resources, facilitate the integration of renewable energy sources into the grid and save costs for EU consumers and energy companies.”
The REPowerEU plan began in May as a response to Russia’s invasion of Ukraine, which has resulted in profound consequences for European energy supplies. The European Commission said that “Controlling the energy consumption of the ICT sector” is a very important part of the strategy.
It was created to achieve the motive of help- “quickly reduce [the EU’s] dependence on Russian fossil fuels by accelerating the clean transition and joining together to achieve a more resilient energy system and a true Energy Union.”
In order to meet the demands of electricity in nations, crypto mining processes should be paused because “there is a need for load reduction in the electricity systems.”
According to the official website of the European Union, REPowerEU is the European Commission’s plan to enable Europe to depend on Russia for fossil fuels before 2030, with Russia’s invasion of Ukraine. In fact, 85% of Europeans believe that if they trade a union, the EU can achieve its independence more quickly from Russia’s oil and gas.
Almost an investment of ⋲210 billion is needed in the period up to 2027 to cover the costs of allover imports from Russia’s fossil fuels, which cost a heavy burden of around ⋲100 per year.
According to the Commission Staff Working Document, Europe accounts for 10% of all worldwide crypto mining, with Ireland and Germany at the top. The universal activity of cryptomining, the document mentions the upgrade of “technical tools to assess the power consumption and carbon footprint of cryptomining at an international level”.
Due to the lack of energy due to international conflicts, the European Commission has decided “to implement targeted and proportionate measures to lower the electricity consumption of miners in cryptoassets, and also in a longer perspective, to put an end to tax breaks and other fiscal measures in favor of crypto miners”.
Noting the large energy consumed by Bitcoin (BTC) which is based on proof-of-work protocols, the document states that “mining is not a prerequisite for blockchain and that it is possible to base blockchain technologies on consensus mechanisms that consume far less energy than Proof-of-Work because they do not involve a mining process.”
