In a report on digital and energy published on October 18, the European Commission asks Member States that in the event of a cut in the electricity network, mining activities are stopped, and in the long term, to discourage the mining of bitcoins.
The information technology sector accused of putting pressure on the energy network
In this European Commission report devoted to devising an action plan in the context of the energy transition, the current uses and production models of the ICT sector are assessed. The sector accounts for around 7% of global electricity consumption, and this share is expected to reach 13% by 2030. In addition, the energy footprint of ICT accounts for 3-5% of global CO2 emissions, making them placed at the same level as the aeronautical industry.
Only 10% of cryptocurrency mining is done in Europe
The report points to many applications of new technologies whose use is becoming more democratic, thus impacting the electricity network. This is the case of cryptocurrencies, the use of which is increasing substantially, with energy consumption twice as high as two years ago, bringing the proportion to around 0.4% of global energy consumption. electricity. The European Union should, according to the document, “ensure that only the most energy-efficient versions of technologies underlying cryptocurrencies and blockchains are used on energy markets and exchanges,” in particular by gradually abandoning the mining of bitcoins, considered the most polluting.
A political agreement was reached by the co-legislators on June 30, 2022 which requires crypto-asset market participants to disclose information on the environmental and climate footprint of their crypto-assets.
EU countries urged to react to cryptocurrency issue
In the name of the current energy crisis and the increased risks for the coming winter, the Commission wants Member States to implement targeted measures to reduce the electricity consumption of crypto-asset mining activities. In the event of power outages, Member States will have to be ready to interrupt the mining of crypto-assets. From a long-term perspective, the tax breaks and other fiscal measures in favor of cryptocurrency mining activities currently in force in certain Member States should, according to the report, be abolished.
The Commission will introduce an energy efficiency label for blockchain. In this way, the EU plans to encourage the use of less energy-intensive virtual currencies like Ethereum, the second most important cryptocurrency in the world, which succeeded on September 15, 2022, its upgrade to the so-called protocol of “ proof-of-stake”, which the company claims should reduce energy consumption by more than 99%.