How The EU Will Imposed Energy Labels On Bitcoin Miners

The European Commission (EC) released an update on the energy strategy to be adopted by the European Union in the coming years; this might bring significant changes for Bitcoin miners and crypto miners. The Commission is moving forward with the European Green Deal and intends to improve the region’s energy efficiency by integrating renewable energy sources. 

In that sense, the Commission claims that it wants to help consumers “embrace the benefits of the green transition” by adopting a series of steps. The Commission acknowledges the technological advances happening worldwide, with the propagation of Bitcoin miners, blockchain technology, and data centers. 

Thus, the Commission wants to “decouple” the Information and Communications Technology (ICT) sector from the energy footprint. Commissioner for Energy Kadri Simson said the following about this initiative: 

The European Green Deal and making Europe Fit for the Digital Age are two central priorities of this Commission and go hand in hand. The aim is to make our energy system more efficient and ready for increasing share of renewable energy sources. For this, we need more innovative digital solutions and a grid that is much smarter and more interactive than it is today. Today’s Action Plan will help unlock the potential of digitalising the energy sector and the important energy savings that this can provide, benefitting all consumers.

How Will Bitcoin Miners Be Affected By The EC’s Plans?

As part of their energy plan, the Commission announced the implementation of digital tools and other services to “help” consumers to keep their expenses in check. In addition, the project contemplates the improvement of the region’s cybersecurity for the benefit of cross-border electricity flows. 

For Bitcoin miners and crypto miners for Proof-of-Work (PoW) consensus, the initiative contemplates implementing a “labeling” system. These measures might put the operation of crypto miners in danger, at least for the Euro Zone. The Commission proposed: 

(…) an environmental labelling scheme for data centres, an energy label for computers, measures to increase transparency on the energy consumption of telecommunication services and an energy efficiency label for blockchains.

The Commission failed to provide further details on the labeling system or which blockchains might fall into their energy-intensive and energy-efficient classification. In the past, high-ranking members of European governments expressed concern about Bitcoin miners and their alleged negative impact on the environment. 

In future updates, the Commission claims it will provide tools and methodologies to calculate these measures and the climate impact of blockchain and digital technologies. In the meantime, the crypto industry faces a new period of uncertainty regarding a change to its approach to crypto, digital assets, and Bitcoin miners. 

The chart below shows that Bitcoin miners use 253 Terawatt/hour (TWh), or less than 0.15% of the total global energy, and generate 0.09% of global carbon emissions. Despite these metrics, governments and high-ranking officials continue to condemn the crypto-mining industry.