Answer to Written Question: Environmental harm caused by energy use of cryptocurrency

(Source: European Parliament)



Answer given by Ms McGuinness

on behalf of the European Commission


The Commission agrees that investments in and the development of digital infrastructures should be compatible with the objectives of the Green Deal[1]. In that respect, the energy consumption for the validation of crypto-asset transactions, in particular in the case of proof-of-work validation protocols, can be a cause for concern.

The Commission reviewed this issue in its Impact Assessment accompanying the proposal for a regulation for markets in crypto-assets[2]. It is important to highlight that crypto-assets vary significantly in their technical design. Certain validation mechanisms (for the validation of transactions) make some blockchains more energy efficient. Some older blockchains are transitioning to these alternative types of validation.

As announced in the Digital Finance strategy[3], in order to encourage the development of and investment in low or zero emission ‘distributed ledger technology’ (i.e. the technology underpinning crypto-assets), the Commission will aim to integrate the Information and Communication Technologies (ICT) sector by 2021 in the sustainable finance taxonomy[4].

[1] Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions the European Green Deal – COM/2019/640 final



[4] Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088

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