Mercedes Mullins
Bitcoin mining, the process by which bitcoins are created and transactions are finalized, is an energy-intensive process that often relies on fossil fuels, particularly coal. In 2020-2021, 67% of the electricity consumed for Bitcoin mining was produced from fossil energy sources, with coal providing 45% of the overall electricity used for Bitcoin mining globally. The high energy consumption of Bitcoin mining has led to concerns about its environmental impact, with some investors and environmentalists criticizing the use of fossil fuels in the mining process.
| Characteristics | Values |
|---|---|
| Percentage of energy from fossil fuels | 67% |
| Percentage of energy from coal | 45% |
| Percentage of energy from natural gas | 21% |
| Energy consumption in 2020-2021 | 173 terawatt hours |
| Carbon emissions in 2020-2021 | 86 megatons |
| Water usage in 2020-2021 | 1.65 cubic kilometers |
| Land usage in 2020-2021 | 1,870 square kilometers |
| Top Bitcoin mining countries | China, USA, Kazakhstan, Russia, Canada, Malaysia, Germany, Iran, Ireland, Singapore |
| Incentives to use fossil fuels | Unregulated energy prices, cheap electricity, stranded fossil fuel assets |
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What You'll Learn
Bitcoin mining's carbon footprint
Bitcoin mining has a substantial carbon footprint, with a heavy reliance on fossil fuels, particularly coal and natural gas. In the two years from January 2020 to December 2021, global Bitcoin mining consumed about 173 terawatt-hours of electricity, emitting around 86 megatons of carbon. This is like burning 8.5 billion pounds of coal or operating 190 natural gas-fired power plants. To offset this carbon footprint, it is estimated that 3.9 billion trees should be planted, covering an area almost equal to the Netherlands, Switzerland, or Denmark, or 7% of the Amazon rainforest.
The energy consumed and carbon emitted by Bitcoin mining are expected to grow as long as it remains profitable, due to the competitive nature of the mining process. As the price of Bitcoin rises, revenue to miners increases, incentivizing more participants to mine. This results in more powerful and energy-consuming mining hardware being used, increasing the overall energy consumption and carbon emissions of the Bitcoin mining network.
The environmental impact of Bitcoin mining varies by country, depending on the energy sources used. China, the USA, Kazakhstan, Russia, Canada, Malaysia, Germany, Iran, Ireland, and Singapore are among the top contributors to the carbon footprint of Bitcoin mining. China, in particular, has been the biggest Bitcoin mining nation, with its coal-intensive mining operations contributing significantly to carbon emissions.
While Bitcoin proponents argue that disputes about its environmental impact miss the point, critics highlight the existence of alternative tokens that consume far less power. Some suggest that the focus should be on regulatory interventions and technological advancements to improve the efficiency of the global financial system without harming the environment.
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Fossil fuels and Bitcoin's energy mix
Bitcoin mining has a significant environmental impact, with a heavy reliance on fossil fuels. In 2020-2021, 67% of the electricity consumed for Bitcoin mining was produced from fossil energy sources, with coal providing 45% of the overall electricity used globally during this period. Natural gas accounted for 21% of the energy mix, with renewables like solar and wind providing only 2% and 5% respectively. China, the world's top Bitcoin miner during this period, heavily relied on coal for its energy production, with the US and Kazakhstan also having large Bitcoin mining footprints.
The surge in the crypto market has resulted in a corresponding surge in energy consumption for Bitcoin mining. A 400% increase in Bitcoin's price from 2021 to 2022 led to a 140% increase in energy consumption for the worldwide Bitcoin mining network. This has raised concerns about the environmental impact of Bitcoin mining, with critics pointing to the vast amounts of electricity generated from fossil fuels.
The environmental impact of Bitcoin mining goes beyond just carbon emissions. Bitcoin mining has a significant water and land footprint, with a global water footprint of 1.65 km3 in 2020-2021, more than the domestic water use of 300 million people in rural Sub-Saharan Africa. The land footprint during this period was over 1,870 square kilometers, 1.4 times the area of Los Angeles.
Some countries have taken steps to address the environmental impact of Bitcoin mining. In 2022, Canada's Manitoba and British Columbia paused new connections of Bitcoin mining facilities to the hydroelectric grid, while Hydro-Québec increased prices and capped usage for Bitcoin miners. The same year, the European Commission invited member states to lower the electricity consumption of crypto-asset miners and end tax breaks for them.
While some argue that Bitcoin mining could support renewable energy development by utilizing surplus electricity from wind and solar, the current reality is that Bitcoin mining is heavily reliant on fossil fuels, particularly coal and natural gas. This has led to concerns about the long-term environmental sustainability of Bitcoin and the crypto market as a whole.
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The environmental impact of Bitcoin mining
Bitcoin mining, the process by which bitcoins are created and transactions are finalised, is an energy-intensive process that has a significant environmental impact.
A 2024 study found that about half of the electricity used for Bitcoin mining in 2025 was generated through fossil fuels, with coal contributing 45% and natural gas contributing 21%. This heavy reliance on fossil fuels has resulted in a substantial carbon footprint, with Bitcoin mining emitting about 86 megatons of carbon in the two years from January 2020 to December 2021. To put this into perspective, this is like burning 8.5 billion pounds of coal. The carbon emissions from Bitcoin mining are so significant that, in order to offset the emissions from China's coal-intensive mining operations in 2021-2022, around 2 billion trees would need to be planted, an area equivalent to the sum of Portugal and Ireland.
In addition to its carbon footprint, Bitcoin mining also has a large water footprint. The global water footprint of Bitcoin mining in 2020-2021 was about 1.65 cubic kilometers, more than the domestic water use of 300 million people in rural Sub-Saharan Africa. The land footprint of Bitcoin mining during this period was also significant, affecting more than 1,870 square kilometers of land, 1.4 times the size of Los Angeles.
While some argue that Bitcoin mining could support renewable energy development by utilizing surplus electricity from wind and solar, the current reality is that Bitcoin mining is heavily reliant on fossil fuels, with worrying impacts on water, land, and carbon emissions.
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Crypto mining's water and land footprints
The environmental impact of crypto mining extends beyond carbon emissions, with significant water and land footprints that have largely been overlooked.
Water Footprint
The water footprint of Bitcoin (BTC) mining is substantial, amounting to about 1.65 cubic kilometers (km3) from 2020 to 2021. This is comparable to the volume of water required to fill over 660,000 Olympic-sized swimming pools, which is enough to meet the domestic water needs of 300 million people in rural Sub-Saharan Africa.
Land Footprint
The land footprint of BTC mining is also extensive, affecting approximately 1,870 square kilometers of land, which is 1.4 times the size of Los Angeles.
The environmental impact of crypto mining varies by country, largely depending on its energy sources and the country's specific mining activities. The top 10 Bitcoin mining countries in terms of environmental footprint, including China, the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore, are responsible for 92-94% of Bitcoin's global carbon, water, and land footprints.
The dramatic increase in the price of Bitcoin and the resulting global race for BTC mining have turned the cryptocurrency market into one of the world's leading polluting sectors. As the demand for Bitcoin continues to rise, so too will the environmental footprints of mining, emphasizing the urgent need for policy interventions, technological advancements, and scientific research to mitigate these impacts.
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Country-specific energy sources for mining
The energy sources used for crypto mining vary from country to country. Here is an overview of the energy sources used for crypto mining in some countries:
United States
The United States has become a global leader in Bitcoin mining since China banned crypto mining in 2021. The country's access to renewable energy sources, low energy prices, and pro-cryptocurrency policies have attracted crypto miners. Texas, for example, has a deregulated power grid with spot pricing, allowing crypto miners to be agile when choosing and changing energy providers. Additionally, some crypto mining operations in the US are located near existing power plants or low-cost energy sources, such as nuclear power plants or natural gas wells, to minimize electricity costs.
China
Before the ban on crypto mining, China was the world's top Bitcoin miner in 2020-2021. China's crypto mining operations were heavily reliant on coal, which contributed to about 61% of the country's electricity mix. However, China also had a significant renewable share of 30.2% due to its rapid expansion of wind and solar power.
Kazakhstan
Kazakhstan is another major crypto mining hub, ranking as the second or third largest Bitcoin mining location worldwide. However, the country relies heavily on coal, which accounts for 60% of its electricity mix. This has led to concerns about the environmental impact of crypto mining in the country.
Norway and Iceland
Norway and Iceland are prime locations for industrial-scale Bitcoin mining due to their abundance of low-cost, renewable energy sources. Norway generates over 95% of its electricity from hydropower, while Iceland utilizes cheap, renewable geothermal and hydroelectric energy. These countries' naturally cool climates also make them attractive for crypto mining.
Paraguay
Paraguay is becoming a significant destination for Bitcoin mining in South America due to its abundant surplus of low-cost, renewable hydroelectric energy. Over 99% of the country's electricity comes from hydro sources, creating ideal conditions for industrial-scale Bitcoin mining operations.
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Frequently asked questions
Crypto mining uses fossil fuels by burning them to generate the electricity needed to power the high-powered computers used in the mining process.
Fossil fuels are natural fuels, such as coal and natural gas, that are formed from the remains of dead plants and animals over millions of years.
Crypto miners use fossil fuels because they are a cheap source of energy. In addition, the top crypto-mining countries, such as China, have a high dependency on fossil fuels for electricity generation.
A lot! About 45% of the energy used in crypto mining comes from coal, and another 21% comes from natural gas. In total, about half of the electricity used in crypto mining is generated from fossil fuels.
The use of fossil fuels for crypto mining has a significant environmental impact, including a large carbon footprint, as well as water and land footprints. For example, in 2020-2021, the global water footprint of crypto mining was about 1.65 km3, more than the domestic water use of 300 million people in rural Sub-Saharan Africa.
