Swedish regulators have said mining Bitcoin and other cryptos based on the proof-of-work algorithm could prevent the country and the European Union from complying with the Paris Agreement on Climate Change.
The head of the Financial Supervisory Authority, Erik Thedéen, and the head of the Environmental Protection Agency, Björn Risinger, have called for a ban on mining crypto assets in this "energy-intensive way."
The officials have highlighted crypto mining generates emissions of up to 120 million tons of CO2 into the atmosphere per year. This is equivalent to the carbon footprint of 100 million round-trip flights between Sweden and Thailand.
According to regulators, attention to the environmental friendliness of mining has led to the fact that more and more miners are exploring the possibility of using renewable energy sources. Due to the availability and low prices in Scandinavia, many industry participants are considering a move to the region.
Since April, electricity consumption for mining has increased by hundreds of percent in Sweden, and in August the figure reached 1 TWh. Department managers believe the use of renewable energy for crypto mining is unwise:
"This energy is urgently required for the development of fossil-free steel, large-scale battery manufacturing and the electrification of our transport sector."
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Thedéen and Risinger have referred to data from Cambridge University, according to which the electricity used to mine 1 BTC is enough to travel 1.8 million kilometers in a medium-sized electric vehicle. They added:
"There are other methods for mining crypto-assets, that could also be used for Bitcoin and Ethereum, that are estimated to reduce energy consumption by 99.95% with maintained functionality."