China’s vast Bitcoin mining operation, which accounts for around 80% of the entire cryptocurrency trade, could be undermining the country’s climate change goals, according to a study in the journal Nature.
The study said that around 40% of Chinese Bitcoin mines are powered by electricity generated by coal, while the remaining 60% use renewable energy. The use of coal in the mining of Bitcoin is so large that the study said it could undercut the government’s plans to reach peak emissions by 2030 before becoming carbon neutral in 2060.
If no action is taken, the Nature study said the Chinese Bitcoin mining sector will generate as much as 130.5mln metric tonnes of carbon emissions by 2024, nearly equivalent to the annual emissions of Saudi Arabia.
However, the study said common emission reduction measures, such as carbon taxes, are “relatively ineffective for the Bitcoin industry” as the surging price of crypto continues to attract miners.
Instead, the study suggested regulation that shifts the energy consumption structure of crypto mines towards renewable energy may prove more effective at solving the problem.
The study comes amid growing concern about the energy used in the mining of Bitcoin and other cryptocurrencies, which this year is expected to amount to around 0.6% of global electricity production, the same amount as Norway.
As a result, efforts are underway to shift cryptocurrency mining towards using renewable sources of energy, while countries including China have sought to disincentivise miners or ban cryptocurrencies to keep emissions under control.
There have also been efforts to this effect in the private sector to this effect, with London-listed miner Argo Blockchain PLC (LON:ARB) announcing last month that it has signed a deal with blockchain and cryptocurrency technology firm DMG to launch the first Bitcoin mining pool powered exclusively by clean energy.