Inner Mongolia, an autonomous region in northern China, plans to suspend all cryptocurrency mining activities in the region by April 2021 in order to improve energy efficiency.
Regulation of Electricity Consumption in Inner Mongolia
The Inner Mongolia government will also stop approving new projects in energy-intensive industries such as steel and coke production, Reuters reported on March 1, citing a draft directive to regulate energy consumption in the region.
The Chinese journalist “Wu Blockchain” tweeted that the decision may be due to China’s need to meet its obligations to emit CO2 under the UN climate protection treaty. Much of the energy generated in Inner Mongolia is based on coal, a major source of climate change-related greenhouse gas emissions. China, the world’s second largest polluter after the USA, is aiming for CO2 neutrality by 2060.
Inner Mongolia, along with Sichuan and Xinjiang provinces, is a popular destination for miners looking to mine Bitcoin (BTC) at low electricity prices. According to Cambridge University’s Bitcoin Electricity Consumption Index, Inner Mongolia accounts for eight percent of the world’s total hash power, and China 65 percent, though those numbers have been questioned.
Beijing’s energy consumption aims to be carbon neutral by 2060
However, the region was criticized by the central government in September after failing to meet Beijing’s energy consumption and energy intensity targets in 2019. This was the only one out of 30 mainland China that didn’t, according to the Reuters report.
Now, China’s second largest coal mining region will do everything it can to reduce consumption in sectors that use a lot of electricity, including bitcoin mining. Crypto mining, which requires a lot of computing power, will be discontinued until April of this year. Other affected industries have until the end of 2022 to cease operations.
Inner Mongolia aims to limit energy consumption growth to around five million tons of standard coal equivalent in 202, according to the Reuters report. It is also planned to “reduce energy consumption per unit of economic growth by three percent from 2020 onwards
“[(Inner Mongolia] will tighten its energy control measures and carry the objectives in all economic and social aspects ”, it says in the draft directive. The region’s energy intensity increased by 9.5% in 2016-2019.
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