Regulator request for EU ban on proof of work cryptocurrency mining

Metals and Mining Review | Monday, February 14, 2022

The Vice-Chair of the European Securities and Markets Authority, Erik Thedéen, told the Financial Times that regulators on the Old Continent should consider prohibiting proof-of-work mining in favor of the less energy-intensive proof-of-stake approach

FREMONT, CA: A high-ranking financial regulator has reaffirmed his request for an EU-wide ban on proof-of-work cryptocurrency mining. The power-hungry technology used to create large cryptocurrencies like bitcoin — and, at this stage, ethereum — has been accused of using increasing quantities of renewable energy, ostensibly impeding climate transition in other sectors. The Vice-Chair of the European Securities and Markets Authority, Erik Thedéen, told the Financial Times that regulators on the Old Continent should consider prohibiting proof-of-work mining in favor of the less energy-intensive proof-of-stake approach. According to an ESMA official, this will reduce the organization's massive power use.

Bitcoin mining has become a national concern for Sweden, according to Thedéen, who is also the director-general of Sweden's Financial Services Authority. He and Björn Risinger, the head of the Swedish Environmental Protection Agency, identified proof-of-work mining as the primary cause of bitcoin's high energy consumption in November, 2021 and issued the initial call for a ban in the EU. The solution is to ban proof of work, Thedéen has reiterated, pointing out that proof-of-stake has a much lower energy footprint. The regulator went on to say that they need to have a discussion about transitioning the industry to a more efficient technology. However, Thedéen made it plain that he was not asking for a broad crypto ban.

Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.

Cryptocurrency mining has been chastised for its growing environmental impact. Following President Xi Jinping's commitment to attain carbon neutrality, China, which had the highest proportion of world hashrate at the time, initiated a crackdown on the industry in May, 2021. Miners have been attempting to boost the amount of renewable energy used to operate their equipment. Mining businesses have been shifting to nations with developed wind and solar power generating capacities, such as Sweden and Norway, according to Erik Thedéen, who is considering supporting the Swedish plan. Thedéen now warns that if governments do nothing, a large quantity of renewable energy will be used to mine digital currencies rather than helping traditional services transition away from coal-powered energy sources.

More in News

Steel manufacturing is a critical process that requires precision, expertise, and significant resources. Despite the advances in technology and processes over the years, the steel industry faces numerous challenges that can impact efficiency, cost, and environmental sustainability. Understanding these challenges is crucial for manufacturers to address them effectively and ensure the industry's growth and stability. One of the primary challenges in steel manufacturing is the high energy consumption and associated emissions. Steel production is energy-intensive, primarily due to the need for high temperatures to melt and process raw materials. This results in significant carbon dioxide (CO2) emissions, contributing to environmental concerns such as global warming and climate change. Manufacturers constantly seek ways to reduce energy consumption through technological innovations and optimizing processes, but the balance between efficiency and environmental impact remains delicate. Resource scarcity is another critical issue facing the steel industry. Steel production relies heavily on raw materials like iron ore, coal, and limestone. The finite nature of these resources, coupled with geopolitical issues and supply chain disruptions, can lead to fluctuations in availability and prices, impacting the cost-effectiveness of steel production. Furthermore, the mining activities for these raw materials have their own environmental and social implications, adding another layer of complexity to sustainable manufacturing practices. Technological challenges also play a significant role in steel manufacturing. While advancements have been made, integrating new technologies into existing facilities can take time and effort. Manufacturers must continuously invest in research and development to improve production processes, reduce waste, and enhance product quality. However, the capital-intensive nature of such investments can be a barrier, particularly for smaller companies. Labor is a further challenge in the steel industry. Skilled workers are essential for efficient and safe steel production, but there is often a shortage. The physically demanding and potentially hazardous nature of steel manufacturing can deter potential employees, leading to a skills gap in the industry. Training and retaining skilled labor is a significant focus for many manufacturers. Manufacturers must effectively navigate the intricate international terrain of trade laws, tariffs, and challenges posed by lower-cost producers. This can affect profitability and force companies to innovate and find operational efficiencies to remain competitive continuously. Read Also:  Electrical Business Review ...Read more
 The aluminum sector confronts critical problems linked to worldwide concerns over carbon emissions. Its energy-intensive production procedures, particularly the Hall-Héroult method, considerably contribute to global carbon emissions. With rising demands from climate change, stricter rules necessitate rapid emission reductions. The sector's resource-intensive processes, such as raw material mining and processing, raise environmental issues. Implementing emission-reduction techniques throughout its complex global supply chain challenges sustainability efforts. This industry is under increased scrutiny, necessitating the urgent need for novel tactics. Balancing rising demand while switching to more sustainable methods remains a significant problem. Collaborative efforts among stakeholders are crucial for driving change and establishing a more environmentally conscious aluminum sector. This watershed moment necessitates aggressive steps, technical innovation, and global collaboration to align the industry with changing environmental requirements and assure a sustainable future. Threats to the aluminum industry include: Regulatory Scrutiny The regulatory environment for carbon emissions is changing quickly. Governments worldwide are implementing and tightening legislation to tackle climate change. The aluminum sector must keep up with these changes to ensure compliance with emission requirements and carbon pricing schemes. This demands not just a significant financial investment in cleaner technology but also a proactive attitude to anticipate and respond to future legislative developments.   In addition, the industry must work with policymakers to give feedback and contribute to formulating realistic and feasible carbon reduction objectives. Collaboration between government agencies and industry stakeholders is critical for balancing environmental concerns and economic viability. Rising Production Costs Production prices frequently rise as the sector invests in cleaner technology and more sustainable practices. This may impact every part of the manufacturing process, from raw material procurement to energy use. This problem requires a systematic approach to cost management while maintaining environmental goals. Furthermore, the sector can collaborate with research institutes and governments to gain financing and incentives for long-term efforts. This method not only reduces financial pressures but also creates an environment receptive to creativity. Supply Chain Disruptions The aluminum industry's worldwide supply chains are complex, encompassing bauxite extraction, refining, smelting, and, eventually, manufacturing numerous aluminum products. Implementing emission-reduction measures may disrupt these intricate networks, resulting in possible shortages and increased prices. To address this issue, the sector must aggressively involve its supplier networks. Collaboration and communication are essential for ensuring that cleaner practices are coordinated throughout the value chain. Establishing sustainable purchasing procedures and investing in local suppliers can also help strengthen resilience in possible disruption. ...Read more
The Rt. Hon Dominic Raab, in partnership with the World Gold Council, today publishes a new report examining the systemic threats from the illicit trade of gold through artisanal and small-scale gold mining (ASGM). The Silence is Golden report finds the ASGM industry, responsible for an estimated 20% of annual gold supply and about 80% of gold mining employment1 , is being targeted by criminal gangs, armed groups and corrupt officials, presenting a real and present danger to international security. The report notes the top fundamental challenges that plague ASGM are: 1) The lack of transparency across businesses and governments for implementation and compliance with legal standards. 2) Failures of accountability creating serious breaches of national law and international obligations, allowing criminals to operate freely. 3) Criminals extracting enormous profits from serious human rights abuses, due to disconnected enforcement and compliance efforts across nations and international agencies. In response, it outlines four strategic objectives with 24 practical actions for governments, international organisations, NGOs, mining companies and economic development organisations. These include prosecuting and disrupting criminal perpetrators and sustaining a coordinated and focused international effort across G7 and G20 countries to tackle these pervasive issues. “Governments, international organisations and the gold sector must work together to prosecute criminals, prevent illicit profiteering and integrate responsible ASGM into the legal and viable supply chain,” said Rt. Hon Dominic Raab, former Deputy Prime Minister of the United Kingdom, the report’s author. “It will now require coordinated and sustained international attention and action to prevent the illicit flows from gold from bankrolling the war in Ukraine and enabling Al Qaeda and Islamic State to regroup in Africa.” “Without viable economic alternatives, the poorest and most marginalised of our world’s citizens are forced into artisanal gold mining, taking place within hazardous conditions and of little economic gain for their families,” said David Tait, CEO, World Gold Council. “Our partnership with Dominic Raab is a call to action to both redirect illicit gold away from the world’s bad actors and improve the lives of those working in the sector, offering actionable ways that governments and international 1 Please note these statistics are estimated and sourced from ‘Global Trends in Artisanal and Small-Scale Mining, A Review of Key Numbers and Issues’, Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, 2017. agencies can contribute to positive change, both environmental and economic for the millions impacted globally.” ASGM, as defined in the report, is gold mining conducted by individuals or small enterprises with limited capital investment and production. While this practice spans 80 countries, it is particularly focused in Africa, Asia and Latin America. The majority of ASGM operates outside of formal legal frameworks, within the shadow economy, making it especially susceptible to serious risks and challenges including evasion of tax revenue for governments, lack of basic safety standards that can cause mercury poisoning and other maladies, and safety concerns for the miners and their communities. To learn more about the report and download a copy: Artisanal & Small Scale Gold Mining | World Gold Council. ...Read more
Smart mines are still relatively new, although they are becoming more prevalent. This results from the mining industry's many barriers to implementing new technology. On the one hand, mines are competitive and segregated inside the company, which means they compete in terms of safety, production, and other aspects. Implementing new technology is hampered by internal politics and a lack of collaboration inside mining companies. All departments must work together to support integration and systems innovation. Every mine must be convinced of the need for new technology as they are distinct and competitive. Furthermore, because they typically take a very cautious stance about their data, mining operators frequently have little faith in cloud services and IoT solutions. This results from the industry's general mistrust of emerging technology and bad prior experiences with big, "reliable" businesses that have, for instance, been involved in hacking scandals. As others who take the risk start to gain from digitization, these obstacles make many mines less competitive and more expensive. Let’s quickly examine the advantages of making the mine digital: Reduce Operational Costs: Compared to their "analog" counterparts, "smart mines" with wireless monitoring have substantially lower operating expenses. In essence, smart mines are ones whose primary resources are digitalized using embedded sensors that transmit data over a wireless network to a central system. Because there is no longer a need for labor-intensive manual data readings on the ground, mining operators can save money on both human labor and costly cabling and subsequent cable maintenance. Not only do mines save money by eliminating these pointless expenses, but they also save a significant amount of money because operators who integrate an Operational Intelligence (OI) solution into their wireless network are more adept at anticipating problems and maintaining their sites regularly. These incidents can completely stop operations for weeks or months at a time. As a result, smart miners outperform regular mines in terms of ROI. Automate Processes More Readily: Automation of operations is easier for smart mines with integrated technologies than for those that implement technology later. By adding automation software, mining operators can enhance their current wireless network of embedded sensors. This software enables them to operate moving and static assets and programs remotely with automated interactions. An excellent illustration of this is the use of a physical network of sensors and remotely programmed and controlled software by automated trucks, enabling them to do mining tasks that previously required a fleet of truck drivers autonomously.  Keep the Workforce Safe: Regarding mines, which are frequently extremely dangerous locations for humans, worker safety is a big concern. For example, workers and nearby residents may suffer injuries or even die when dams fail. Employees performing manual readings in isolated or difficult-to-reach locations are more prone to injury. Workforce safety is significantly increased when movable assets, such as trucks in mines, are automated and wireless; remote readings are made possible. This eliminates the need for workers to be present on-site. Through OI technologies, mining operators can also benefit from predictive analysis and insights that help them better anticipate and avert potentially disastrous events like dam failure. Wearable technology that is wirelessly connected and enables workforce tracking aids in improving labor coordination for operators.  These are some of the benefits of digitalizing the mine. Even if there are numerous obstacles in the way of mines implementing new technology, these must be removed if mining firms are to succeed and stay competitive in the increasingly digital era.  ...Read more