Swedish regulators are calling for a ban on mining throughout the European Union due to the high energy consumption of these enterprises.
The Swedish authorities fear that cryptocurrency mining threatens the ecology and energy stability in the EU. They believe the ban will stimulate a shift towards more energy efficient bitcoin mining. Erik Thedéen and Björn Risinger, Heads of Swedish Financial Supervisory Authority and Environmental Protection Agency, issued a joint statement expressing concern about the growing energy consumption from mining companies.
“Our conclusion is that policy measures are required to address the harms caused by the proof of work mining method. It is important that both Sweden and the EU can use our renewable energy where it provides the greatest benefit for society as a whole.”
They called for a ban on this type of energy-intensive production, since the increase in the number of miners, due to the relocation of mining farms from China, can slow down the transition of the EU countries to zero CO2 emissions and nullify all efforts to achieve the goals of the Paris Agreement. Thedéen and Risinger note that bitcoin and ether mining requires twice as much electricity as the whole Sweden, and the average electric car can travel 1.8 million km on electricity, which is now required to mine just one bitcoin.
Electricity consumption in the Swedish bitcoin mining sector has grown significantly, already reaching 1 TWh per year, according to a statement released by Finansinspektionen. The Swedish regulators estimate that this amount of energy would be sufficient to meet the electricity needs of at least 200,000 households.
Swedish officials propose several options to cut mining operations in the EU.
“There are several different policy options available. For instance, Sweden and other countries could introduce a tax on the energy-intensive production of bitcoin. Another option is to communicate more widely around the climate problems related to crypto-assets, in the hope that this will lead to both producers and investors demanding a shift to mining methods that require less energy.”
Swedish regulators call on the EU to consider introducing a complete ban on mining. They also propose to prohibit companies from trading and investing in cryptoassets whose mining is based on the energy-intensive PoW consensus.
The authors of the proposal acknowledge that such steps could induce miners to move to other countries and globally, carbon emissions will not decrease in any way. However, they believe that Sweden and the EU should set an example for other countries and regions.