The Commission is indeed aware of the concerns on growing electricity consumption for cryptocurrencies, and blockchain technology in general.

These systems where mining[1] is required to build a consensus and establish trust between the users of the blockchain increasingly require significant electricity-consuming computing power. This issue is particularly acute for the bitcoin, as the Honourable Member pointed out. Mining activity seems to be currently concentrated in China (two thirds according to certain estimations[2]). Nevertheless, it cannot be excluded that some part of the mining is done in the EU.

If this is the case, and if the energy consumed for this activity is produced according to law, there is no legal basis to forbid or even limit it. However, as an electricity consuming economic activity within the EU, it is subject to EU rules and policies with respect to energy efficiency, the power sector and greenhouse gases emissions, with the greenhouse gas emission of the power sector as such largely covered by the EU emission trading system[3].

The mining business model seems to be based on expectations of high valuation of the cryptocurrencies. As long as the price of electricity covers the electricity production costs, the growing electricity consumption, and cost, is likely to modify the demand for and value of cryptocurrencies.

As mining of cryptocurrency is not an illegal activity, the Commission did not put in place any means to track it, so far. However, the impact of cryptocurrencies on energy demand is a new factor driving energy demand and will be kept under review by the Commission.

It is important to note that many promising applications of blockchain technology do not have extensive need for processing power.

• [1] Particularly a certain mining technique called proof of work
• [2] https://www.ccn.com/china-may-limit-bitcoin-mining-reducing-the-industrys-geographic-centralization/
• [3] European Commission' s Clean Energy for All Europeans: https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/clean-energy-all-europeans