The Cambridge Bitcoin Electricity Consumption Index (CBECI) recently published research on the energy demands and energy sources of Bitcoin mining. According to researchers, fossil fuels made up about 62% of the total energy budget for bitcoin mining operations in January 2022. This is down from 65% a year earlier, meaning that the share of cleaner energy sources used to power bitcoin mining is growing, and that there is a net growth in cleaner energy being used to power Bitcoin. The level of coal-based energy used fell from 47% to 37%, but the share of gas used increased to 25% from 16% in the previous year.

In the new research, CBECI estimated the electricity consumption and carbon dioxide emissions in 2018 for each stage of Bitcoin mining, from the extraction of raw materials to make the equipment, to its production, use and materials recycling. They calculated that the Bitcoin network consumed 31.3 Terawatt-hours of electricity and generated 17.3 megatons of carbon dioxide equivalents in 2018, which were lower than previous estimates.

About 99% of the environmental impact came from the use of the mining equipment. The location of the miners had the highest impact on the environment, with areas that use mostly fossil fuels for electricity, such as inner Mongolia, contributing more to the carbon footprint than regions using renewable resources, such as Sichuan, China.

However, these results contradict an earlier study completed in July by the US-based Bitcoin Mining Council industry body, which stated that approximately 60% of the energy used to mine bitcoins come from sustainable energy sources. According to current estimates, Bitcoin mining will account for 48.4 million metric tons of carbon dioxide this year.

This comes during a long-standing debate weighing the alternative promises of Bitcoin regarding privacy and transaction anonymity with the cost of the energy resources needed to sustain Bitcoin mining. Bitcoin ‘mining”–the process used to secure the cryptocurrency–is often particularly highlighted by those arguing that Bitcoin has an enormous negative environmental impact, and on top of the energy needed for mining, Bitcoin requires a substantial amount of energy to complete its various levels of encryption and to process transactions.