Environmental sustainability has been a key topic in the ongoing debates over bitcoin (BTC) mining. An analyst now says the industry derives more than half of its energy needs from cleaner and more sustainable sources.
In a Feb. 19 article on Bitcoin Magazine, environmental, social, and governance (ESG) analyst Daniel Batten refuted a 2022 Cambridge Center for Alternative Finance (CCAF) study that reported bitcoin mining used 37.6% sustainable energy.
According to Batten, the CCAF findings excluded several factors from their calculations, including off-grid mining, flare-gas mining, and updated geographical hash rates.
Batten found that the three exclusions caused the CCAF model to understate bitcoin’s sustainable energy by 13.6%.
Per the researcher, off-grid mining alone adds 10.8% to bitcoin’s sustainable energy use figure. Flare-gas mining and the new geographical hashrates added another 2.8%.
When he factored all the exclusions into his calculations, he found that bitcoin mining used 52.6% sustainable energy, 15% more than what CCAF reported.
Batten’s figure is much closer to that reported by the Bitcoin Mining Council (BMC), which stated the industry used about 58.9% sustainable energy in its operations.
However, many environmental groups and ESG investors have treated BMC’s findings with some distrust, instead choosing to rely on CCAF’s much lower estimates.
This is mainly because the groups regard BMC as an industry insider liable to understate or overstate issues to protect the bitcoin mining sector. On the other hand, environmentalists feel CCAF is a reputable and independent research body with seemingly no hidden agenda.
However, Batten thinks this view is skewed since BMC’s status as an industry body means it has better access to bitcoin mining data and thus can provide a more accurate picture of the situation.
ESG investors can now adopt bitcoin
According to the analyst, the only way bitcoin’s sustainable energy use could get below 50% is if four giant BTC mining operations used 100% coal-based energy without anyone knowing.
The industry’s sustainable energy figure could also go below 50% if Texas’ electric grid operator had over-reported its actual renewable energy by four times.
Batten believes his new findings will give environmentally conscious investors a legitimate, data-based reason to invest in the sector. Many had shied away from crypto owing to its reported high energy usage and negative environmental impact.
He also asserted that the new figure put bitcoin mining significantly ahead of all other major industries in terms of sustainable energy use. It effectively removes any barrier to the institutional adoption of BTC on ESG grounds.
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