Bitcoin Mining’s Sustainable Energy
A recent study by the Cambridge Centre for Alternative Finance (CCAF) reveals that 52.4% of Bitcoin mining is now powered by sustainable energy, marking a significant rise from 37.6% in 2022.
The report highlights that 42.6% of Bitcoin mining’s sustainable energy comes from renewables such as wind and hydropower, while 9.8% is sourced from nuclear energy.
Additionally, the study notes a shift in energy sources, with natural gas overtaking coal as the primary contributor to Bitcoin mining.
Natural Gas Overtakes Coal as Top Energy Source for Bitcoin Mining
A recent study highlights a major shift in Bitcoin mining’s energy sources, with natural gas surpassing coal as the dominant contributor. Natural gas usage has climbed to 38.2%, up from 25% in 2022, while coal’s share has dropped significantly to 8.9%, down from 36.6%.
The report, based on a survey of 49 mining companies across 23 countries, represents 48% of the Bitcoin network’s total hashrate. Key participants include Bitfarms, CleanSpark, Hut 8, IREN, MARA, and Riot.
Sustainability Efforts & Energy Consumption
- Bitcoin’s total electricity consumption is estimated at 138 TWh annually, accounting for 0.5% of global energy usage.
- Carbon emissions are calculated at 39.8 megatonnes, with a 24% year-over-year improvement in hardware efficiency.
- 86.9% of decommissioned mining hardware is either resold, repurposed, or recycled, reducing electronic waste.
- Bitcoin mining produced around 2.3 kilotonnes of e-waste in 2024.
Geographic & Economic Insights
- North America leads Bitcoin mining, with the U.S. accounting for 75.4% of activity and Canada for 7.1%.
- Electricity remains the biggest cost, making up over 80% of operational expenses, with a median power cost of $45 per MWh.
- Bitcoin miners contributed to grid stability, curtailing 888 GWh of electrical load in 2023 to assist during peak demand periods.
Cambridge Calls for More Research on Bitcoin Mining Impacts
The Cambridge Centre for Alternative Finance (CCAF) has emphasized the need for further research into key areas such as methane mitigation, heat reuse, and employment effects to better understand Bitcoin mining’s broader social and environmental impact.
Alexander Neumueller, Research Lead at CCAF, stated that by providing data from nearly half of the global mining network, the goal is to ground policy discussions in transparent evidence.
Bitcoin mining’s environmental footprint remains a contentious issue. A Harvard-led study recently claimed that U.S. Bitcoin mining worsens air pollution, but energy experts have criticized its methodology and outdated data.
U.S. Dominance & Emerging Challenges
- The United States became a global leader in Bitcoin mining after China’s 2021 crackdown on the crypto industry.
- Cheap electricity and strong capital markets helped American mining firms gain dominance, with optimism initially fueled by the election of pro-crypto President Donald Trump.
- However, recent developments are casting uncertainty over the sector’s momentum.
Tariff Concerns on Mining Equipment
- The U.S. mining industry relies heavily on imported equipment from Southeast Asia, with Thailand, Malaysia, and Indonesia manufacturing most of the machines used in the U.S.
- These machines now face steep tariffs of up to 36% under a new Trump administration trade policy, though implementation has been temporarily paused for 90 days.