Fearing a projected increase in electricity demand, the Swedish government may turn its back on crypto mining, according to the country’s energy minister. Sweden’s bitcoin minting industry, a leader in Europe, could soon lose the preferential treatment it has used for some time, media reports have revealed.
Crypto Miners May Find It Harder to Access Sweden’s Cheap Green Energy
Sweden may be changing its attitude toward cryptocurrency mining amid predicted increases in energy demand in other sectors. In a recent interview, Energy Minister Khashayar Farmanbar said that the Swedish economy is moving “from a period of control to an extreme expansion where the entire manufacturing sector is seeking electrification.” Quoted by Bloomberg, the minister said.
Frankly, we need energy for something more useful than bitcoin.
With hydro reservoirs and wind farms providing clean, low-cost power, Sweden has attracted many bitcoin miners and its coin minting industry is one of, if not the largest in Europe. Concerned about rising electricity consumption, however, the Stockholm government asked the Swedish Energy Agency to estimate energy use in the digital space, particularly in crypto mining.
The location of mining farms is largely determined by the availability of cheap electricity, and their operators’ profits depend heavily on the price of crypto assets. The outcome of the ordered review is likely to exacerbate the first of these conditions, and the downturn in the crypto market is already affecting the others.
Farmanbar refrained from revealing what steps the government would take to restrict mining, but two options are being discussed: one would change the order in which power users are connected to the network, creating numerous connections in preference to those that are presumed to bring more benefits to society, such as creating jobs.
Another is to limit the scope of the preferential tax treatment currently enjoyed by all data centers. The intended purpose of this preferential treatment is to attract multinational companies such as Microsoft and Facebook, not to attract crypto mining businesses, as Erik Thornstrom, senior advisor to the industry association Swedenergy, has detailed It is.
I think existing tax breaks should focus on activities that are intended to attract them in the first place. Cryptocurrency mining is more questionable.
Officials were advised to learn more about innovative technologies like crypto mining.” Sukesh Kumar Tedla, chairman of the Swedish Blockchain Association, commented, “I think many public officials, including the energy minister, who have strong opinions about cryptocurrencies and blockchain in general, need further education and awareness. He acknowledged that crypto mining uses a lot of energy, but noted that many other innovative technologies do as well.
The latest episode in the debate over the future of bitcoin mining in Sweden came last year when the director of the Swedish Financial Services and Environmental Protection Agency, against the backdrop of a serious increase in energy consumption in the sector, called for the introduction of energy intensive This was prompted by a proposal to ban proof-of-work (PoW) mining.
Their call to eliminate what they see as a threat to climate change goals is supported by officials in other EU countries, including Germany, Spain, and Norway. However, the proposal to ban PoW mining has been removed from the draft regulatory package for a comprehensive crypto asset market (MiCA) agreed by the EU institutions. According to the continent’s crypto community, the controversial text amounts to a ban on Bitcoin.
Companies in the Swedish steel industry, for example, want to profit from curbing crypto mining. SSAB, for example, plans fossil fuel-free production and argues that grid operators should prioritize industrial projects such as its own instead of connecting users on a first-come, first-served basis, as is currently done; Tomas Hirsch, head of energy at SSAB, says, “We are trying to reduce claims that “Sweden’s carbon dioxide emissions could be reduced by 10%.
“For example, why should we use electricity to mine bitcoins when we can use it to make fossil fuel-free steel? It is not trivial at all in a free market,” commented Minister Farmanbal, noting that with bottlenecks expected, Sweden should consider whether it is using energy in the best way. His remarks come as politicians such as himself are under increasing pressure to address global warming.
Image credits: Shutterstock, Pixabay, Wiki Commons, Alexandros Michailidis
