Want electricity tax on crypto – E24

Want electricity tax on crypto – E24

US President Joe Biden will impose an excise tax on cryptocurrency mining. Rødt's Sophie Marhaug believes that taxing cryptocurrency mining would be a good start in Norway as well.

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Also last year Biden tried To impose taxes on cryptocurrency mining, but then it was not approved, according to the Verge website. Yahoo Finance.

American Proposed by the Ministry of Finance Imposing an indirect tax on cryptocurrency mining. The fees are scheduled to increase gradually over three years to 30 percent of the company's electricity costs.

“Extraction can require significant amounts of computing power and can therefore require significant amounts of energy,” the ministry wrote.

The Ministry of Finance claims that the increase in energy consumption associated with the growth of cryptocurrency mining could have negative impacts on the environment and lead to higher energy prices for others.

Managing Director Bjørn Ronning at the Norwegian Data Center Industry Organization.

“Imposing a special tax on electricity consumption among cryptocurrency miners could reduce mining activity,” the ministry wrote.

The US government estimates that such a tax would generate $7.7 billion in revenue from 2025 to 2034.

– A lot has been invested

Bjørn Rønning, from the Norwegian data center industry, believes that many countries are looking at the possibility of limiting cryptocurrency mining, since energy is also required for many other purposes.

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– We see the problem in the cryptocurrency industry. “We as an association have nothing to do with this kind of activity,” Ronning tells E24.

– What do you think of such a proposal made by Biden?

– Maybe I don't think this will happen without controversy. Ronning says a lot has been invested in the cryptocurrency industry in the United States.

Authorities in Norway have previously tried to differentiate between cryptocurrency centers and other data centers when it comes to reducing the electricity tax, but it has been difficult to implement because it is illegal to differentiate between companies, he says.

He believes it may be difficult to slow down the cryptocurrency mining process.

-If you want to do something about it, you must ban it by law.

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Cryptocurrency mining will be banned

The Red Party has previously called for a ban on cryptocurrency mining. They believe that taxing extraction would be a good start, also here in Norway.

-Anything that can limit the energy-intensive consumption of cryptocurrencies is a good thing. In this sense, this is a good initiative, says Sophie Marhaug (right).

– It should reflect that power is a scarce resource. A tax is one way to do this, although I believe cryptocurrency mining should be widely banned.

– It's not often that you agree with Joe Biden, right?

– No, it's very rare, says Marhaug.

Parliament representative Sophie Marhaug (right).

It turns to artificial intelligence

Norwegian cryptocurrency miners, like other electricity consumers, have experienced a difficult period with electricity prices rising significantly. Kryptovault went bankrupt in December.

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Now a new type of activity can create new business opportunities for companies with significant computing power.

– We are seeing signs that some cryptocurrency players in Norway are changing to provide AI capability instead. Ronning says there is now strong demand for clean energy for this type of data use.

“Hopefully this will be less controversial than cryptocurrency mining,” he says.

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– Very demanding

Power consumption is high in both cryptocurrency mining and in regular data centers. It is also expected that services in the field of artificial intelligence (AI) will be able to demand much more electricity than it does today.

What will this increased consumption require?

– It will be very demanding for the data center industry. We see how much resistance there is to increased power consumption. Our answer is to contribute facts about what this industry contributes,” Ronning says.

-We cannot ignore the fact that there will be very little net new energy production in Norway. There is also still a lot of fossil energy use, so what do the authorities intend to do to ensure enough energy to reach climate targets? Clearly, more power is needed to implement the green transition, Ronning says.

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Round trip is charged

In Norway, there has been some pushback regarding framework conditions for data centres. As of 2016, data centers received a reduced electricity tax, in keeping with the energy-intensive industry.

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In 2018, it was decided that data centers that mine cryptocurrencies should receive the full electricity tax. But in 2020, cryptocurrency miners still get discounted fees in the same way as other data centers.

In 2022, the government decided that all data centers must pay the full electricity tax again.

– Was the data center industry in Norway performing better than expected after losing the reduced electricity tax?

– He probably didn't turn any case. But this leads to a significant increase in costs, Ronning says.

The electricity tax is currently €16.44 per kilowatt hour. The reduced rate paid by the other energy refining industry is €0.58 per kilowatt hour, According to the Swedish Tax Agency.

Hanisi Anenih

Hanisi Anenih

"Web specialist. Lifelong zombie maven. Coffee ninja. Hipster-friendly analyst."

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