Sweden averse to Bitcoin mining amid rapid rise in energy demand

Europe’s mining paradise Sweden appear Redirecting the power of Bitcoin miners to job creation projects as the country’s energy demand grows rapidly.

Sweden’s Minister for Energy Khashayar Farmanbar said Bloomberg News:

“To be honest, something more useful than Bitcoin needs energy. We are moving from the era of management to the extreme expansion of the manufacturing industry as a whole seeking electrification.”

The country’s electricity demand is increasing due to increased mining activity. Data centers in the county use only a small portion of Sweden’s electricity today, and the share of cryptocurrency mining is even smaller. However, counties estimate that electricity demand from mining operations could increase eight-fold by 2040.

Local mining

The affordable electricity and cold climate of Sweden’s wind and hydropower has set the perfect environment for crypto miners. The county does not publicly disclose mining data. Therefore, it is difficult to estimate the scale of mining work. However, the country is known to be mined by giants such as Canada’s Hive Blockchain Technology and Hong Kong’s Genesis Mining.

According to the power consumption of Cambridge Bitcoin indexSweden accounts for 0.84% ​​of the monthly average global hash rate, based on figures since January 2022. Ranking It is the 27th country with the highest annual electricity consumption of Bitcoin mining, with a total consumption of 124,609 terawatt hours.

A few weeks ago, the Swedish government Swedish Energy Agency We call for a particular focus on crypto mining to clarify how much power is being used by the digital infrastructure. Once the numbers are obtained, Mr. Fermanber said the government would stop mining cryptocurrencies in the region and redirect power to industries that could bring tangible benefits to the country, such as increasing employment. He said he would take some steps.

Although he did not elaborate on the details of the measures the government is considering taking, Farmanber hinted at a change in the country’s current tax system.

Today, the same affordable tax rates apply to all data centers, attracting global giants such as Microsoft and Meta to the country. However, the climate and cheap electricity, combined with it, attracted mining companies more than any other company.

Eric Thornstrom, Senior Advisor of Sweden Energy, commented on the possibility of renewal to differentiate tax rates, saying:

“I think existing tax cuts should focus on the activities they intended to attract in the first place. Cryptocurrency mining is more suspicious.”

In addition, Sweden considers the environmental impact of cryptocurrency mining when planning to stop mining operations. The country plans to invest the energy it cuts from its mining operations in carbon-friendly projects such as the production of fossil-free steel. It is estimated that the government expects to reduce the country’s carbon emissions by 10%.

Other countries with changing attitudes towards the mining industry

Kazakhstan, the world’s most active third country of mining, has the same problems as Sweden. Kazakhstan’s energy crisis began in November 2021 and since then Kazakhstan has reduced electricity from Bitcoin miners to save the rest of the country.

So far, Kazakhstan has discouraged operations by imposing significant tax increases and bureaucratic burdens on all mining operations. Before the energy crisis and the country took these steps, Kazakhstan was the second country with the highest mining activity.

Meanwhile, Paraguay recently announced a new bill that favors crypto miners. The new bill in the Paraguayan Senate is currently awaiting presidential approval. If it passes, the county will provide crypto miners with excess energy at an affordable price and will be exempt from VAT.

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