TL; DR Breakdown
- Two Swedish regulators have jointly called for the EU to ban crypto mining activities.
- But Sweden’s power provider has dismissed the calls terming crypto a useful industry.
Sweden’s power service provider Vattenfall has clashed with two of the country’s regulators over calls to stop Proof of Work (PoW) mining.
The country’s environmental and financial watchdogs have suggested a stoppage of bitcoin(BTC) mining in the EU. Director Generals (DGs) of the nation’s finance and environment sectors, Erik Thedéen and Björn Risinger, have jointly called for the block.
The DGs hold that this ban will encourage the adoption of sustainable BTC mining. Again, it’ll help Sweden and Europe achieve carbon neutrality.
Further, the DGs affirm that proof of work is an energy-intensive venture. Also, the surging value of cryptos is pushing energy demand. That’s because the growing value attracts new entrants, increasing competition for mining rights.
Thedéen and Risinger have expressed concern over the influx of miners from other regions. Many are escaping China’s crypto industry purge.
Their demand for renewable power in the Scandinavian zone may hinder their sustainability efforts. Additionally, they could setback Sweden’s steps toward meeting the objectives of the Paris Agreement.
Sweden’s options on PoW
The DGs used different studies to bolster their claims. One has suggested that BTC and ETH mining use double the amount of power that Sweden uses. Another claims a standard vehicle can drive over a million kilometers using power for mining one BTC.
To them, Sweden and the EU need policy interventions in tackling the adverse effects of crypto mining. They affirm that the region must use its renewable resources for the greater good.
The DGs suggest several interventions. First, E.U governments could levy taxes on energy-demanding BTC mining.
Additionally, they’ll need to increase awareness of the negatives of cryptos. That’ll make users and miners demand sustainable mining methods.
Moreover, they’ve suggested that Sweden stops the entry of new ventures using energy-intensive mining. They’ve also called for a prohibition of the trading and investing in Proof of Work cryptos.
According to the regulators, these measures are crucial to achieving carbon neutrality globally. As such, both Sweden and the EU should show the rest of the world the right direction.
Vattenfall’ different take
But Sweden’s Vattenfall has opposed the move. Sweden’s public power generator sees crypto mining as a helpful activity.
To them, BTC mining can assist power producers in dealing with the difficulties they face in their production. The firm’s head of Power Management, Henrik Juhlin, says mining could help stabilize electrical loads on its power grids.
That’s the case when there’s an oversupply of power compared to its demand. This situation is true for countries such as Sweden that are increasingly turning to renewable energy.
One can’t control the wind or solar energy production as they depend on nature. Consequently, crypto mining farms can take up surplus power when available.
Juhlin also sees the proposed ban as being counterproductive. It’ll push miners to other regions that still rely on fossil fuels. That’ll increase carbon emissions globally.
It’s easy to see why the regulators have put up a spirited fight against crypto mining. Its financial sector regulator Finansinspektionen says there’s a ballooning of electricity usage in its BTC mining sector.
The agency places the sector’s demand at 1 TWh annually. The regulator suggests that this volume of power is enough for the requirements of 200 thousand homes in Sweden.