Bitcoin mining has achieved the target that Elon Musk set three years ago, when he called for at least 50% of the energy used for mining to come from renewable sources. To date, miners have reached a rate of 54%, marking a significant step in reducing the environmental impact of the Bitcoin mining industry.
Elon Musk's renewable energy goals and Tesla's decision
In May 2021, Elon Musk suspended the acceptance of Bitcoin as a payment method for Tesla, citing concerns about the environmental impact of Bitcoin mining. He criticized Bitcoin mining for consuming a large amount of electricity, much of which comes from polluting energy sources like coal. Elon Musk stated at the time:
"We are concerned about the increasing use of fossil fuels for Bitcoin mining."
However, the progress to achieve a 54% renewable energy rate is not a sudden change. This is the result of miners moving to areas with cleaner and cheaper electricity. For example, in Quebec with hydroelectric plants, Iceland with geothermal energy, and Texas with strong wind and solar farms.
Despite some significant progress, the energy transition of Bitcoin is still far from complete. The Bitcoin mining industry currently consumes about 127 terawatt-hours (TWh) per year, far exceeding the energy consumption of countries like Argentina. Although the rate of renewable energy use in Bitcoin mining has increased, Bitcoin still generates about 69 million tons of CO₂ annually — a figure nearly equivalent to the total emissions of Greece. Whether using clean energy or not, Bitcoin's massive electricity consumption remains a concerning issue for critics.
Breakthrough in the new energy mix
Meanwhile, hydropower currently dominates renewable energy supply for Bitcoin, accounting for up to 23% of total energy used. Regions like Iceland and Quebec, with abundant water resources and cheap electricity costs, are typical examples.
Wind energy is also becoming an important factor, especially in Texas, where Bitcoin miners have taken advantage of wind farms and the state's business-friendly policies. Wind currently accounts for about 5% of Bitcoin's total energy.
Solar energy, although only accounting for 2%, is also on the rise. Many miners in hot regions have started combining solar panels with battery storage systems to reduce costs and increase energy independence.
In addition, nuclear energy, although not considered renewable energy, contributes 9% to Bitcoin's total energy mix. It is particularly popular in areas lacking other clean energy sources.
However, despite the positive shift, coal still accounts for 22% of Bitcoin's energy mix, although this rate has decreased from before, when coal accounted for up to 40%. Natural gas also accounts for 21%, and although it is less polluting than coal, it is still not a "green" energy source.
In summary, although Bitcoin has made a strong shift towards using renewable energy, the mining industry still faces many challenges, especially regarding electricity consumption and emissions.
Will Tesla restore Bitcoin payments?
With Bitcoin's current renewable energy rate at 54%, the big question is whether Tesla will soon restore its Bitcoin payment system. Theoretically, Elon Musk's conditions have been met. However, there are still many factors to consider.
One of the reasons Tesla may still be hesitant to resume Bitcoin payments is political factors. Elon Musk currently has a close relationship with Donald Trump, who may return to the White House. Elon is said to have donated $277 million to Trump's campaign and has been tasked with leading the Department of Government Efficiency (DOGE). This role gives him closer ties to policies, which could influence the approach to Bitcoin and digital assets in the future.
Donald Trump has also promised not to implement any policies that could harm the development of Bitcoin. This could be good news for investors and Bitcoin enthusiasts, and could be a driving factor for Tesla to resume accepting Bitcoin in the future.
