The EU might crack down on crypto mining this winter
Hello, Protocol Climate friends. We hope you’re having a good day. Surely it’s better than Liz Truss’ at least. Today, we’re exploring the EU’s crypto winter and green hydrogen. Then, we’ll look at the methane emissions of rotting lettuce. Sorry, wait. We’re being informed that’s not “tech” enough. Well, anyway, the other stuff is, so dive in!
The EU's crypto winter
You thought crypto winter was bad? Try the real, potentially harsh winter about to hit Europe. Officials believe shutting down a key segment of the crypto industry could be one solution to the energy crisis.
A crypto mining crackdown could conserve precious gas supplies. The European Commission suggested that EU members should take that measure to provide relief to residential customers during times of peak energy demand.
- The EU has a plan to cut gas use by at least 15% through March.
- A number of groups, including the International Energy Agency, have laid out plans for how to do that by cutting down on commuting or lowering thermostats. Heavy industry can also play a role.
- But so, too, could the crypto industry. “In case there is a need for load shedding in the electricity systems, the member states must also be ready to stop crypto-assets mining,” the European Commission said in a report.
Targeting the crypto mining industry could make a lot of sense. The EU needs to cut gas use now, all while not foisting a heavy burden onto residential users. And a crypto mining crackdown could pay immediate returns.
- Miners have cited the flexibility they have in shutting down and spinning up their operations based on the cost and availability of energy as an advantage compared to other industries and argued that they can actually help stabilize grids and lower the cost of energy.
- Given that the biggest efficiency gains for heavy industry are likely years away, as are the prospects of getting heat pumps in every basement in the EU, that flexibility could pay major dividends.
- EU member states could test how serious miners are about stabilizing the grid.
Crypto mining’s energy footprint has been well established. That’s particularly true for proof-of-work mining — which is used by bitcoin, the most popular crypto ecosystem. The European Commission called it “outdated.”
- Crypto mining energy consumption has “more or less doubled compared to two years ago,” the report said.
- The EU is home to 10% of all proof-of-work mining globally. While not a huge share, the EU is in the midst of an energy crisis and reducing demand as much as possible is the name of the game.
The report also cited the need for retiring proof of work in the long term, pointing to Ethereum’s recent Merge as a path forward. The network moved from proof of work to proof of stake, slashing energy consumption by 99%. The Commission said “we need to go the extra mile for this to happen,” and has a number of moves in place to do so. But first things first could be cutting energy use now so the lights and heat stay on this winter.— Benjamin Pimentel
Green hydrogen lifts off 🚀
The war in Ukraine has shifted the cost calculation for hydrogen production. The conflict has resulted in soaring gas prices, accelerating investments in green hydrogen made with renewables. The fledgling industry is now “decades ahead of pre-war projections,” according to a new analysis by the think tank Carbon Tracker.
Governments and investors from 25 countries have committed $73 billion to green hydrogen since the war began. The biggest investments come from the combined public and private sectors of Germany ($10.4 billion), Morocco ($9.7 billion), and the U.S. ($9.5 billion). In comparison, the market was valued at just $1 billion last year.
That’s a game-changer for the industry. Green hydrogen is still a fairly nascent technology, but the uncertain supply of methane gas — which is commonly used to create hydrogen — from Russia could put the green hydrogen industry and technology way ahead of schedule.
- In “most regional markets” including Europe and Asia, green hydrogen is now the most cost-effective form of hydrogen.
- That’s not necessarily because it has gotten cheaper, but because the cost of hydrogen derived from coal and especially gas has skyrocketed by more than 70% since Russia’s invasion of Ukraine, Carbon Tracker said.
Governments can foster an even faster green hydrogen evolution. Money isn’t the only way to give the fuel a boost. With the right incentives in place, Carbon Tracker found the cost of green hydrogen could be “one of the cheapest forms of energy” available by 2030.
- Lawmakers can introduce subsidies, both for investors and for the industry itself. Tax credits are one example of industry-directed subsidies, such as those included in the Inflation Reduction Act in the U.S.
- Setting up banks or other financial bodies dedicated solely to expanding the green hydrogen market could accelerate its growth as well.
- And tracking programs that verify green hydrogen is actually made with renewables could ensure the whole system has integrity.
Speeding up green hydrogen development doesn’t mean the fuel is a savior. Creating it requires renewable energy, something we don’t have a surplus of right now, as well as copious amounts of freshwater. While industries like steel, cement, and shipping could benefit from green hydrogen given the lack of alternatives outside fossil fuels, governments also need to ensure they don’t overcommit to hydrogen when other carbon-free resources are readily available.
— Lisa Martine Jenkins
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The mushroom leather company MycoWorks secured an investment of an undisclosed amount from GM Ventures — the automaker’s investment vehicle — as a part of a collaboration to develop a material that can be used in car interiors.
New VC fund just dropped: Propeller is launching its first $100 million fund, which will invest in companies working at the ocean-climate nexus.
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Some kinda good news if you squint. Carbon dioxide emissions grew just 1% this year. Which is good and all, but we kind of need them to go in the opposite direction. Fast.
The FTC is asking if you’d like to know how to fix your dryer. No, it’s not just out of the kindness of the agency’s heart. It’s taking comments on whether energy-efficiency labels should come with repair instructions in order to save energy and reduce e-waste.
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Tide and river power got a boost. The Department of Energy set aside $35 million for two largely untapped sources of renewable energy. That cash is a relative drop in the ocean, though. (Water joke, please clap.)
Björk is climate tech. That’s really all there is to say about that.
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