Green Proofs for BTC
We are proud to introduce Green Proofs for BTC, a first-of-its-kind initiative with one goal: to rapidly reduce carbon emissions from bitcoin mining. Leveraging Energy Web’s work in the field of digital and self-sovereign identity, and RMI’s extensive work on electricity decarbonization pathways, this initiative will bring to market a scalable, transparent platform for certifying renewably-powered miners and hosting companies, delivering much-needed clarity to the cryptocurrency industry about what it means to mine responsibly – and lending unprecedented transparency and trustworthiness to miners’ sustainability claims.
Today, bitcoin mining consumes an estimated 0.68% of global electricity production annually - roughly the amount of a mid-sized country.
But what if all that electricity demand was met by renewables? What if the collective buying power of bitcoin miners was applied to accelerate the adoption of green energy in grids all over the world?
We believe the crypto industry as a whole can become a leader in driving the global energy transition towards efficiency and renewables. To do so, we see an opportunity to develop a common framework for assessing and certifying the carbon impact of bitcoin mining operations.
Not all renewable energy purchases are created equally when it comes to helping reduce carbon emissions from electricity. Purchasing certificates from an existing solar plant in sunny California, for example, doesn’t create as much impact (in terms of reducing carbon) as investing in a new solar facility in coal-heavy Poland or India.
To maximize the impact of renewables used to power bitcoin and bring greater transparency to the network’s carbon footprint, Green Proofs for BTC combines Energy Web’s Green Proofs technology solution with a new assessment approach co-created with RMI for determining the impact of different renewable energy purchases.
The combined solution is simple: bitcoin miners share data on electricity use, location, how many renewables they’ve purchased, and details about those purchases— did they purchase unbundled certificates? Or did they invest directly in a new renewable energy facility? All of this information is then used to create a net-impact score that miners, hosting facilities, investors, and other market participants can use to quantify the real-world effects of miners' renewable purchasing.
Our vision is for cryptocurrency mining to become a net benefit for climate by accelerating procurement and utilization of renewables.
To realize this vision, we’re establishing a shared definition of renewably-powered mining – one that is aligned with existing carbon accounting and ESG reporting principles – and pairing it with a public accreditation platform. Our near-term goal is to enable any crypto market participant–be they a mining company, investor, regulator, or member of the general public–to fully understand the emissions impact of any bitcoin mining operation that is relevant to them. Longer-term, we aim to turn bitcoin’s collective electricity demand into a powerful driver of new renewables on the grid in the locations where we most need them.
Although our immediate focus is bitcoin, the largest cryptocurrency by market cap and energy intensity, this solution can be widely applied throughout the cryptocurrency sector, using a combination of decentralized identifiers, verifiable credentials, and business logic embedded in smart contracts to create a rich audit trail for individual mining operations. Green Proofs for BTC complements other emerging approaches like the South Pole’s Crypto Climate Impact Accounting Framework, the Crypto Climate Accord’s Guidance for Accounting and Reporting Electricity Use and Carbon Emissions from Cryptocurrency, and the work of the Sustainable Bitcoin Standard.
On May 9, 2022, Energy Web and RMI launched a broad stakeholder consultation to gather feedback on our emissions' assessment methodology, with the goal of refining and improving the approach across industry sectors. We invite interested stakeholders to learn more about Green Proofs for BTC mining and provide input between now and June 10th.
When companies purchase renewables, their goals are typically to
However, procurement practices vary widely in their ability to support this second objective. For example, buying unbundled energy attribute certificates from a grid powered by a high percentage of renewables may signal greater consumer demand for renewables overall, but fail to translate directly to an increase in renewable capacity.
Conversely, funding a new on-site renewable generation facility–even in an area with a relatively dirty grid– has a clear, direct, “material impact” on that grid mix.
Green Proofs for BTC will use an innovative assessment approach to evaluate the material emissions impact of renewable energy purchases by crypto mining facilities. This approach will score companies based on four parameters relative to the electricity that they purchase or acquire and the renewables they procure:
This approach is applicable to any sector or company wishing to evaluate the emissions implications of its renewable energy purchases–including not only crypto, but also data centers, industrial operations, renewable energy providers, and renewable energy installers. By using granular (e.g. hourly) marginal emissions factors, participants can also use the approach to account for the emissions impacts of certain grid flexibility contributions, such as mitigating renewable curtailments.
Energy Web is currently evaluating the approach itself as well as appropriate “cut off” score ranges for certifying mining operations and will use input from the ongoing consultation period to refine the approach and scoring parameters.
We invite all interested companies to participate in our public comment window between May 9th and June 10, 2022 by:
*For requirements on renewable energy claims, please reference RE100’s technical criteria.