Key Takeaways
- The Norwegian parliament rejected a bill on May 10 that sought to outlaw energy-intensive mining for cryptocurrencies such as bitcoin.
- The bill’s author, the communist Red Party, received support from both the Green Party and the Socialist Left Party.
- The request was made earlier this month by the Red Party (Rdt), which was formed in 2007 by the merger of the Red Electoral Alliance and the Workers’ Communist Party.
A bill to abolish mining in Norway was rejected by the Norwegian Parliament. Only left-wing parties backed the proposal. Both the Green Party and the Socialist Left Party supported the bill’s creator, the communist Red Party.
“Obviously, the majority here has disappointed us. We will electrify significant portions of civilization in the future. If we don’t want to carpet Norwegian nature with wind power, we need to think about what we’re going to use it for,” Rdt’s Sofie Marhaug told E24.
In March 2022, a proposal was submitted to prohibit the mining of bitcoin and other cryptocurrencies using the Proof-of-Work (PoW) algorithm. The bill’s authors cited the significant energy consumption of mining, which is primarily derived from renewable sources.
The minority also proposed an electricity levy on cryptocurrency miners who use a lot of electricity.
Bitcoin mining has become increasingly popular in Norway in recent years. Norway currently generates 1% of the global Bitcoin hash rate while using 100 percent renewable energy.
With ample hydropower and low energy prices, Norway stands to be a green oasis for the Bitcoin mining industry. In northern and central Norway, a kilowatt hour costs only 0.12 Norwegian krone. This is accomplished by retaining specific tariffs that are not applicable to all.
Even though these electricity tariffs do not pertain to everyone, crypto mining enterprises are unlikely to see their energy costs rise dramatically.
Left-wing parties are likely to try to raise electricity bills for miners, according to Arane Research analyst Jaran Mellerud. He also did not rule out the possibility that industry critics will draft new laws outlawing any operations involving the extraction of digital assets.
European countries have previously asked for a ban on bitcoin mining based on the PoW algorithm. A similar project was launched in Switzerland, which borders Norway.
While regular homes, many businesses, and the public sector pay a 16.69 re per kilowatt hour power tax, the industry pays a lower 0.55 re per kilowatt hour electricity tax. This also applies to cryptocurrency mining data centres, which require a lot of power.
According to Marhaug, it appears that the majority in the Storting will defer to the market and charge Norwegian electricity customers.
The majority on the other hand allegedly stated that discriminating against data centres based on a politically conceived societal advantage is “in principle problematic.”
Because of its low-cost hydropower output, Norway is the perfect area for Bitcoin mining ventures. According to information, hydropower accounts for 88 percent of Norway’s energy generation, which is quite inexpensive and advantageous to crypto miners. Wind power, on the other hand, accounts for 10% of total power generation in Norway, while other sources account for only 2%.
