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Oct 24, 2022

Biden administration should follow EU’s lead on curbing bitcoin’s excessive electricity use

For immediate release: 10-24-2022

Contact: Alex Formuzis, alex@ewg.org, Ira Arlook: iarlook@gmail.com

Biden administration should follow EU’s lead on curbing bitcoin’s excessive electricity use

WASHINGTON – The Department of Energy should follow Europe’s lead in taking steps to curb bitcoin mining’s excessive electricity use, says Change the Code, Not the Climate, the campaign to stop cryptocurrency production from harming the planet.

This week, the European Union released a plan that includes several potential actions designed to lower the amount of energy bitcoin miners consume, improve their efficiency, and integrate more renewable power, like wind and solar, into Europe’s grid.

Among the measures is a labeling plan for bitcoin mining that will assign grades to operations based on steps they take to lower their electricity consumption. The goal is encouraging a switch from bitcoin mining’s power-hungry proof of work process to a less energy-intensive and more climate-friendly code, like proof of stake.

The EU would also eliminate any financial incentives for miners that refuse to make the change, a powerful mechanism to push the industry toward a cleaner future.

“There are steps, like the ones the EU announced, the Department of Energy can take now to begin bending the curve of bitcoin’s rising use of dirty sources of energy, which are contributing to the climate crisis,” said Jay Lucey, legislative director for EWG.

Last month, a sweeping report from the White House Office of Science and Technology Policy called for federal action to reduce crypto’s reliance on climate-polluting energy sources. The EU plan offers some important suggestions.

“President Joe Biden has shown he’s willing to use executive authority to tackle big challenges facing the country, and bitcoin’s stubborn reliance on fossil fuels to power its mining operations meets those criteria,” said Lucey.

“To achieve the US climate goals, we need to rapidly shift away from fossil fuels, not reinvest in them as too many Bitcoin mining operations are doing” said Rolf Skar, Special Project Manager with Greenpeace USA. “Real incentives from industry and government are needed to build a better, climate-friendly Bitcoin.”

To force a shift now to less-power-guzzling mining, the DOE could:

  • Set energy efficiency and transparency standards that all digital assets should meet. The department has established energy efficiency standards for more than 60 different products, from commercial ice makers to refrigerated vending machines. Although the DOE’s Energy Star efficiency certification program identifies ways to reduce electricity use in data centers, it has not yet set enforceable standards. 

  • Set energy efficiency standards for computer chips called ASICs, or application-specific integrated circuits, used by miners. Not all ASICs are the same. Some use much more electricity, and new models are getting more energy efficient.

Requiring miners to use the most energy-efficient ASICs – and setting ambitious energy efficiency goals to drive even more innovation – could be an important solution to the growing problem of bitcoin’s power usage and its negative impact on the climate.

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