EPA Acknowledges Plans to Look at Crypto Energy Usage, Emissions

The EPA is working on recommendations from a September White House report that raised grave concerns about cryptocurrency’s effect on the climate, the agency told lawmakers in a letter.

The agency recently sent a response to 23 House Democrats who had asked the Biden administration for more information about efforts to address cryptocurrency’s energy usage and emissions, according to a copy of the letter seen by Bloomberg Law.

A report from the Office of Science and Technology Policy found cryptocurrency mining accounts for 0.9% to 1.7% of U.S. electricity use and causes about 0.4% to 0.8% of U.S. greenhouse gas emissions. Following the report, agencies including the Environmental Protection Agency and Energy Department declined to explain publicly how, or even whether, they would react to the findings.

In the letter to the lawmakers, the EPA said other agencies were also “initiating work to advance the report’s recommendations,” although it didn’t name them.

The report broadly calls on agencies to consider providing technical assistance to cut energy, water, and noise pollution; ensure energy reliability if crypto mining threatens the grid; advance new energy efficiency standards; and do more research to better understand the threat.

The EPA’s response has mollified Rep. Jared Huffman (D-Calif.), who has repeatedly urged the agency to take a hard look at whether cryptocurrency facilities are complying with the Clean Air Act, Clean Water Act, and other environmental statutes.

“It’s good to see the administration directing attention to this important issue. The crypto warning lights are flashing, and it’s not just high-profile bankruptcies and shady investment schemes that require accountability and government oversight,” Huffman told Bloomberg Law on Nov. 18, apparently referring to the recent collapse of cryptocurrency exchange FTX. “It’s also the huge environmental impacts ‘proof of work’ crypto is causing.”

Huffman pledged to keep monitoring the EPA’s progress and pushing the agency to “step up and address these significant environmental and climate impacts.”

In its letter, the EPA also said it’s “determined to use all our tools to help tackle this crisis,” including a March executive order on digital currency that addresses the climate impacts of cryptocurrency mining.