According to CoinDesk, the European Commission has issued an 800,000 euro ($842,000) contract to study the environmental impact of cryptocurrencies. The study, with bids closing on November 10, aims to develop standards that could inform future EU policies to reduce the impact of crypto on climate change and contribute to new energy efficiency labels for blockchains.
The European Commission stated in tender documents that there is evidence that crypto-assets can cause significant harm to the climate and environment, potentially undermining the bloc's goal to cut greenhouse gas emissions. EU lawmakers are concerned about the energy-intensive proof-of-work consensus mechanism that underpins blockchains such as Bitcoin.
During negotiations last year on the bloc's Markets in Crypto Assets regulation, lawmakers nearly approved green controls that some characterized as a bitcoin ban. Although the final text does not go that far, MiCA requires issuers to declare environmental impacts using a method that still needs to be determined. The EU study, to be conducted over a year, will examine green issues such as crypto's use of water, waste products, and natural resources, as well as energy. The environmental impact of crypto has also caught the attention of the U.S. government, with a 2022 White House report finding that major cryptoassets are responsible for 0.3% of global greenhouse gas emissions. However, crypto proponents argue that mining could help decarbonize energy grids.
