Climate-safe crypto: Energy Web and RMI unveil decarbonization approach for electricity-intensive industries
Approach quantifies material emissions impact of renewable energy purchases by any buyer; initial focus is certification for bitcoin miners.
Zug, Switzerland, and Boulder CO, USA, 9 May 2022 — Energy Web, a non-profit building operating systems for energy grids, and RMI, an independent, US-based non-profit organization focused on accelerating the energy transition, have released a draft approach to evaluating the material impact of market-based renewable energy purchases. The approach is applicable to any sector and is currently being trialed with bitcoin miners as the foundation for an eventual certification program that will credential renewably-powered mining and hosting operations.
The newly-developed quantitative approach will evaluate the material impact of renewable energy purchases made by companies to mitigate emissions from electricity consumption. The approach aims to provide the information needed to create a more impactful market for energy attribute certificates, including RECs and Guarantees of Origin. Energy Web plans to use the approach as the foundation for a certification initiative enabling investors, regulators, and customers to assess the “green” credentials of bitcoin miners.
With the announcement, RMI and Energy Web have launched a broad stakeholder engagement consultation, with the goal of refining and improving the draft approach following public comment and feedback. Interested stakeholders, including bitcoin and other cryptocurrency miners, data center operators, and corporate actors who purchase RECs, are invited to provide input on the draft criteria during a 30-day comment window. Comments can be submitted, starting today until June 10th, via the form found here.
“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. “While this approach is fit for use across any number of industries, bitcoin in particular stands to benefit. Numerous bitcoin miners advised our initial work shaping this approach, and the resulting certification initiative will support them and others in their desire to demonstrate sustainability credentials through a credible independent process. By pairing the draft criteria with our decentralized technology solution for certifying renewable energy-powered mining, we can help accelerate decarbonization of bitcoin and other cryptocurrencies in line with the goals of the Crypto Climate Accord, an initiative inspired by the Paris Climate Agreement.”
The draft approach uses a novel quantitative method to measure the net emissions impact of renewable energy procurement by companies. Today, many market participants use products like renewable energy certificates to reduce their carbon emissions. However, determining the real-world impact of RECs is extremely challenging for many sectors, including cryptocurrency. Energy Web’s certification initiative aims to solve this problem by assessing both the emissions that mining operations create and the emissions their REC purchases mitigate. This enables companies and the public to understand the true emissions impact of their operations, and paves the way for investors and others to engage exclusively with actors that are actively contributing to a cleaner grid.
The draft approach calculates the carbon intensity of the energy used for mining by taking into account the grid location of mining operations and the material impact of any renewable energy purchased. The eventual certification initiative will use this approach, once finalized, to assign each participating miner a score; miners whose scores meet a predetermined threshold will receive a verifiable credential synthesizing the key outcomes of their evaluation. By assigning a score to each miner or hosting facility, rather than assigning a value to individual assets, such as a bitcoin, the fungibility of the assets is maintained.
Commenting on the initiative, Josh Henretig, Managing Director of the Climate Intelligence Program at RMI, said: “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. As governments and regulators around the world seek to tackle false sustainability claims, this issue is set to remain top of mind for global decision makers. Picking up where REC markets fall short, this solution engenders greater transparency and verifiability of impact than anything that has come before.”
Following the consultation period, the finalized approach will inform the development of certification criteria that will be used to issue verifiable credentials to eligible miners and hosting companies. The process of accreditation, data verification, and issuance of verifiable credentials for cryptocurrency will be conducted using an implementation of Energy Web’s open-source Green Proofs solution. This technology helps miners securely share data needed to apply for certification, including corporate identity, grid location, mining capacity based on forecasted mining activity, and the amount of renewable energy they have procured.
Energy Web is currently working to apply the certification criteria to an initial group of leading bitcoin miners, and is exploring different ways of using the accreditation to accelerate the decarbonization of bitcoin.
In addition to submitting comments and feedback, interested parties can review the draft approach and download a preliminary tool for scoring their own energy procurement practices here, and register here for a live workshop with RMI and Energy Web on May 13 on the approach and the stakeholder feedback process.
For more information, please visit the initiative’s website here.
About Energy Web
Energy Web is a global, member-driven non-profit accelerating the low-carbon, customer-centric energy transition by unleashing the potential of open-source, digital technologies. Our Energy Web Decentralized Operating System (EW-DOS) enables any energy asset, owned by any customer, to participate in any energy market. The Energy Web Chain — the world’s first enterprise-grade, public blockchain tailored to the energy sector — anchors the EW-DOS tech stack. The Energy Web ecosystem comprises leading utilities, grid operators, renewable energy developers, corporate energy buyers, IoT / telecom leaders, and others.
RMI is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. RMI works in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing.
More information on RMI can be found at www.rmi.org, or follow us on Twitter @RockyMtnInst.
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