Towards an approach for decarbonising crypto

Energy Web and RMI have released a draft blockchain-based approach to evaluate the material impact of renewable energy purchases.

The draft approach ‘Green Proofs for BTC’, which is currently being trialled with Bitcoin miners but applicable to any sector, uses a quantitative method to measure the net emissions impact of renewable energy procurements by companies.

Products such as renewable energy certificates and Guarantees of Origin are commonly used by companies and other organisations to reduce their carbon emissions but determining their real world impact can be challenging.

The proposed approach, now open for consultation, aims to solve this problem by evaluating and scoring both the emissions that the company’s operations create and the emissions that their energy attribute certificate purchases mitigate.

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This should enable companies and the public to understand the true emissions impact of their operations and pave the way for investors and others to engage exclusively with actors that are actively contributing to a cleaner grid, according to an Energy Web statement.

“Environmental, social, and governance factors are top of mind for senior decision makers and corporate boards in every industry, including crypto,” said Jesse Morris, CEO of Energy Web.

He adds that while the approach is fit for use across any number of industries, Bitcoin in particular stands to benefit and numerous Bitcoin miners having advised its initial shaping.

“By pairing the draft criteria with our decentralised technology solution for certifying renewable energy-powered mining, we can help accelerate decarbonisation of Bitcoin and other cryptocurrencies.”

The initiative is one of the goals of the Crypto Climate Accord, which was launched by Energy Web, RMI and the Alliance for Innovative Regulation in April 2021 to decarbonise the crypto industry.

It is intended to form the basis for an eventual certification programme to credential renewably-powered mining and hosting operations.

‘Materially impactful’, the concept on which the approach is based, refers to procurement with the effect of a net emissions reduction, by re-locating operations or funding new renewable assets to cover energy usage.

“The approach we have developed has the potential to transform carbon disclosure and sustainability reporting in any sector that uses market-based mechanisms to procure renewable energy,” comments Josh Henretig, Managing Director of the Climate Intelligence Program at RMI.

“Picking up where REC markets fall short, this solution engenders greater transparency and verifiability of impact than anything that has come before.”

Comments on the proposed approach can be submitted up to June 10. Following, the finalised approach will inform the development of certification criteria that will be used to issue verifiable credentials to eligible miners and hosting companies.