Concerned about the expected increase in electricity demand, the Swedish government may turn its back on crypto mining, the country’s energy minister has indicated. Sweden’s leading bitcoin minting industry in Europe is set to soon lose the preferential treatment it has enjoyed for some time, a news outlet has revealed.
Crypto miners may find it harder to access Sweden’s cheap green power
Amid forecasts of growing energy needs in other sectors, Sweden may be changing its attitude towards cryptocurrency mining. In a recent interview, Energy Minister Khashayar Farmanbar remarked that the Swedish economy is moving “from a period of administration to extreme expansion where all of our manufacturing is looking to electrify itself.” Quoted by Bloomberg, the official said:
We need energy for more useful things than bitcoin, to be honest.
With its hydroelectric reservoirs and wind farms providing clean, low-cost electricity, Sweden has attracted many bitcoin miners and its coin minting industry has become one of, if not the largest in Europe. . However, worried about its increased energy consumption, the Stockholm government commissioned the Swedish Energy Agency to estimate the energy consumption in the digital space, especially crypto mining.
The location of mining farms is largely determined by the availability of cheap electricity while the profits of their operators depend to a large extent on the prices of crypto assets. The results of the ordered review are likely to worsen the first of these conditions and the crypto market downturn has already affected the other.
Farmanbar refrained from revealing measures the government might impose to restrict mining, but two options were discussed. One is to change the order in which electricity users are connected to the grid, prioritizing those that are likely to bring more benefits to society, such as creating a large number of jobs.
The other possible measure is to limit the scope of the preferential tax treatment that all data centers currently enjoy. The argument is that the intended purpose of this incentive was to attract multinational corporations such as Microsoft and Facebook, not crypto mining companies, as noted by a senior adviser to industry group Swedenergy, Erik Thornstrom, who has explained :
I think existing tax breaks should be focused on the business they were meant to attract in the first place. Cryptocurrency mining is more debatable.
Officials are urged to learn more about innovative technologies such as crypto mining
“I think many public officials, including the Minister of Energy, who have strong opinions about cryptocurrency and blockchain in general, need additional training and awareness,” said commented Sukesh Kumar Tedla, who chairs the Swedish Blockchain Association. He admitted that crypto mining consumes a lot of energy, but pointed out that the same is true for many other innovative technologies.
The latest episode in the debate over the future of bitcoin mining in Sweden comes after the heads of Sweden’s financial services and environmental agencies last year suggested a ban on energy-intensive proof-of-work (PoW) mining in the European Union, amid a sharp increase in energy consumption in the sector.
Their call to remove the alleged threat to climate transition goals has been backed by officials from other EU countries, including Germany, Spain and Norway. However, a proposal to prohibit PoW mining, was removed from the Draft Comprehensive Crypto Asset Market (Mica) regulatory package agreed by the EU institutions. The controversial text amounted to a Bitcoin ban, according to the mainland’s crypto community.
Among those hoping to benefit from the limitation of crypto-mining are, for example, companies in the Swedish steel industry. For example, SSAB plans to organize fossil-free generation and insists that network operators should prioritize industrial projects like its own rather than connecting users on a first-come, first-served basis. what they are doing now. “We could reduce Sweden’s carbon dioxide emissions by 10%,” insisted Tomas Hirsch, energy manager at SSAB.
“Is bitcoin mining what we should be using the energy for, when we can use it to make fossil-free steel, for example? That’s not entirely trivial in a market free,” commented Minister Farmanbar, noting that in the face of expected bottlenecks, Sweden should examine whether it is using its energy in the best possible way. His statement comes as politicians like him find themselves under increasing pressure to fight against global warming.
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